CKE Restaurants®, Inc. Reports Period Four Same-Store Sales
May 26 2010 - 11:54AM
Business Wire
CKE Restaurants, Inc. (NYSE: CKR) announced today period four
company-operated same-store sales for the period ended May 17,
2010, for Carl’s Jr.® and Hardee’s®.
Brand Period 4
First Quarter FY 2011 FY
2010 FY 2011 FY 2010
Carl’s Jr.
-5.2% -6.2% -6.1% -5.1%
Hardee’s 0.6% 0.0%
-1.2% +2.5%
Blended -2.6%
-3.5% -3.9% -1.8%
“Both Carl’s Jr. and Hardee’s same-store sales improved from the
third period and from the comparable period of the prior year,”
said Andrew F. Puzder, Chief Executive Officer. “While Carl’s Jr.
continued to be negatively impacted by the poor economic conditions
and high unemployment rates in our core California market, for
Hardee’s, period 4 marks the third consecutive period of positive
same-store sales results. Regardless of when the overall economy
turns around, we remain steadfastly focused on protecting our brand
image for the long run while trying to grow same-store sales in the
short run. Given the state of the economy, I’m proud of our
profitability and we will continue to focus on the excellent
value-for-the money of our premium products and new initiatives to
improve same-store sales and increase market share.
“One example of the adoption of these initiatives at our Carl’s
Jr. locations is the introduction of the Teriyaki Chicken Sandwich,
which includes a charbroiled chicken breast, sweet-and-savory
teriyaki glaze, charbroiled Dole® pineapple, Swiss cheese, lettuce,
red onion, tomato and mayonnaise, all on a honey-wheat bun.”
Period Four Revenue
Trends
For period four, consolidated revenue from company-operated
restaurants (exclusive of all franchise-related revenue and
royalties) was approximately as follows:
Brand Period 4
First Quarter ($ in millions) FY 2011
FY 2010 FY 2011 FY 2010
Carl’s
Jr. $44.9 $46.8
$182.3 $192.1
Hardee’s $38.1
$38.1 $148.6 $151.0
Total
$83.0 $84.9 $330.9 $343.1
For period four, trailing-13 period average unit volume from
company-operated restaurants was as follows:
Brand Period 4 ($ in thousands)
FY 2011 FY 2010
Carl’s
Jr. $1,412 $1,507
Hardee’s $1,001 $1,010
Blended $1,194 $1,238
As has been the practice, the Company is providing general
insight on selected items for the first quarter of fiscal 2011.
However, investors should be aware that the Company has yet to
complete its review of the cost components for the full quarter,
and that there may be other material trends or items which could
adversely or positively impact operating expenses or the Company’s
business in general.
“On a consolidated basis, fiscal 2011 first quarter restaurant
level margin as a percentage of company-operated restaurants
revenue is anticipated to decrease to 16.3 percent to 16.6 percent
as compared to the first quarter of fiscal 2010, when consolidated
restaurant level margin was 19.9 percent,” said Ted Abajian,
Executive Vice President and Chief Financial Officer.
“We anticipate food and packaging costs as a percentage of
company-operated restaurants revenue to be 100 to 110 basis points
higher than our results for the first quarter of fiscal 2010. In
the prior year first quarter, food and packaging costs on a
consolidated basis were 28.7 percent of company-operated
restaurants revenue.
“We expect labor and employee benefit costs as a percentage of
company-operated restaurants revenue to be 125 to 135 basis points
higher than our results for the first quarter of fiscal 2010. In
the prior year first quarter, labor and employee benefit costs on a
consolidated basis, were 28.4 percent of company-operated
restaurants revenue.
“We anticipate consolidated occupancy and other costs as a
percentage of company-operated restaurants revenue for the first
quarter will be approximately 105 to 115 basis points higher than
the results reported in the first quarter of fiscal 2010 primarily
due to an increase in depreciation expense of approximately 70
basis points related to our ongoing remodel program and the
deleveraging impact of our blended same-store sales decline during
the first quarter of fiscal 2011. In the prior year first quarter,
occupancy and other costs on a consolidated basis, were 23.0
percent of company-operated restaurants revenue.
“The Company expects interest expense for the first quarter to
be approximately $5.0 million. This figure includes interest paid
on the Company’s term loan and revolving credit facility, as well
as an estimated $1.4 million unfavorable adjustment to
mark-to-market the Company’s interest rate swap agreements.”
Safe Harbor
Disclosure
Matters discussed in this press release contain forward-looking
statements relating to the Company's strategic initiatives to
protect its brand image, grow same-store sales, and increase market
share, which are based on management's current beliefs and
assumptions. Such statements are subject to risks and uncertainties
that are often difficult to predict and beyond the Company’s
control. Factors that could cause the Company’s results to differ
materially from those described include, but are not limited to,
the Company’s ability to compete with other restaurants,
delicatessens, supermarkets and convenience stores for customers,
employees, restaurant locations and franchisees; the effect of
restrictive covenants in the Company’s credit facility on the
Company’s business; changes in consumer preferences, perceptions
and spending patterns; the ability of the Company’s key suppliers
to continue to deliver quality products to the Company at moderate
prices; the Company’s ability to successfully enter new markets and
complete remodels of existing restaurants; changes in economic
conditions which may affect the Company’s business and stock price;
the Company’s ability to attract and retain key personnel; the
Company’s franchisees’ willingness to participate in the Company’s
strategy; the operational and financial success of the Company’s
franchisees; changes in the price or availability of commodities;
the effect of the media’s reports regarding food-borne illnesses,
food tampering and other health-related issues on the Company’s
reputation and its ability to obtain products; the seasonality of
the Company’s operations; the Company’s ability to hire and retain
qualified personnel and the effect of higher labor costs; increased
insurance and/or self-insurance costs; the Company’s ability to
comply with existing and future health, employment, environmental
and other government regulations; the completion and timing of the
proposed merger; and other factors as discussed in the Company’s
filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are
made. The Company undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise, except as required by law
or the rules of the New York Stock Exchange.
CKE Restaurants,
Inc.
Headquartered in Carpinteria, Calif., CKE Restaurants, Inc. is
publicly traded on the New York Stock Exchange under the symbol
“CKR.” As of the end of its fiscal 2010, CKE Restaurants, Inc.,
through its subsidiaries, had a total of 3,141 franchised, licensed
or company-operated restaurants in 42 states and in 16 countries,
including 1,224 Carl's Jr. restaurants and 1,905 Hardee's
restaurants. For more information about CKE Restaurants, please
visit www.ckr.com.
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