CKE Restaurants, Inc. Reports Period Six Same-Store Sales
CARPINTERIA, Calif.--(BUSINESS WIRE)-- CKE Restaurants, Inc. (NYSE: CKR) announced today period six company-operated same-store sales for the period ended July 13, 2009, for Carl's Jr.® and Hardee's®.
Brand Period 6 Year to Date
FY 2010 FY 2009 FY 2010 FY 2009
Carl's Jr. -6.1% +4.9% -5.6% +3.8%
Hardee's -3.6% +5.7% +0.5% +1.0%
Blended -5.0% +5.2% -3.0% +2.5%
"The decline in our same-store sales remains our management team's primary focus," said Andrew F. Puzder, chief executive officer. "Period six was a particularly difficult period from a same-store sales perspective as both brands were rolling over strong prior year sales due, in part, to last year's government stimulus checks. However, we are encouraged by the results of some of our recent sales-building initiatives.
"During period six, we reintroduced our popular Teriyaki Burger at Carl's Jr. supported with an ad starring Audrina Patridge from 'The Hills' television show. Since the commercial started airing, the Teriyaki Burger has been among the best selling premium burgers on the menu. We offer it on all three of our burger platforms starting at approximately $2.89. In addition, we are testing Hardee's Made-From-Scratch™ Biscuits at a Carl's Jr. location in Buena Park, California. This test is looking very encouraging so far and we are now planning to expand the test to a wider group of restaurants. While the initial sales results have been strong, we are now working through both equipment and operations issues in the wider test.
"Also in period six, Carl's Jr. began running a limited time 2 for $4 Western Bacon Cheeseburger promotion supported with our commercial starring Top Chef's Padma Lakshmi, who provocatively eats and describes the taste of a Western Bacon Cheeseburger in the ad. Since we introduced the promotion, sales of this product have increased substantially. Given current commodity costs, our profit margin at the 2 for $4 price point is still very good.
"At Hardee's, we promoted a lower priced breakfast sweet-good item known as 'Biscuit Holes', which we make with our famous Made-From-Scratch buttermilk biscuit dough, then roll them in cinnamon-sugar, and serve them with a cup of icing for dipping. We supported this product on air during period six with humorous ads that featured actual consumers coming up with alternative, often inappropriate, names for the product. In addition to generating a significant amount of press attention from this ad campaign, the Biscuit Holes are also proving to be a popular alternative for those customers who would normally be looking for a donut or pastry for breakfast.
"We are also very encouraged by the opening sales performance of new restaurants. A franchisee-owned Carl's Jr. in Douglas, Arizona set a new record for first week sales at $108,596. A company-operated Carl's Jr. restaurant located in Porterville, California, which opened in January 2009, was the previous one-week record-setter, bringing in $107,638. So despite the continuing tough economy, Carl's Jr. is setting sales records in new and existing markets, continuing to grow its unit count and giving customers what they want – premium quality burgers at fair prices.
"While not an excuse, as noted above, both brands are rolling over very difficult same-store sales comparisons from the prior year. Our management team is working diligently to bring same-store sales back to positive territory, while staying focused on maintaining our brand image, consumer perceptions regarding the taste and quality of our products, as well as our profitability.
"Although blended same-store sales declined by 5.0% during period six, the trend improved from period five (which was a decline of 5.2%), even though the prior year comps were more difficult in period six than in period five for both brands. On a two-year basis, blended same-store sales for period six increased 0.2%.
"With respect to the brands, for period six, Hardee's same-store sales declined 3.6%, compared to an increase of 5.7% for period six of fiscal 2009. On a two-year basis, Hardee's same-store sales increased 2.1%. Hardee's trailing-13 period average unit volume was $1,006,000 in period six, which compares to $970,000 for period six last year. On the last day of period six, Hardee's introduced the French Dip Thickburger, Ranch Bacon Fries and the Southwest Chicken Salad.
"Same-store sales for Carl's Jr. declined 6.1% for period six as compared to an increase of 4.9% for period six last year. On a two-year basis, same-store sales decreased 1.2% for period six. Carl's Jr.'s trailing-13 period average unit volume totaled $1,492,000 in period six, which compares to $1,523,000 for the same period last year," Puzder concluded.
Period Six Revenue Trends
For period six, consolidated revenue from company-operated restaurants (exclusive of all franchise-related revenue and royalties) was approximately as follows:
Brand Period 6 Year to Date
($ in millions) FY 2010 FY 2009 FY 2010 FY 2009
Carl's Jr. $48.2 $49.4 $287.5 $293.4
Hardee's $38.2 $40.0 $227.2 $242.8
Total $86.4 $89.4 $514.7 $536.2
Total revenue for company-operated restaurants declined $3.0 million in period six, driven by the refranchising of Hardee's restaurants during the prior fiscal year as well as the same-store sales decline.
The Company will report period seven same-store sales results on or about August 19, 2009. As of the end of its fiscal first quarter on May 18, 2009, CKE Restaurants, Inc., through its subsidiaries, had a total of 3,133 franchised or company-operated restaurants in 42 states and in 14 countries, including 1,205 Carl's Jr.® restaurants and 1,915 Hardee's® restaurants.
SAFE HARBOR DISCLOSURE
Matters discussed in this press release contain forward-looking statements relating to future plans and developments, financial goals, and operating performance and 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, supermarkets and convenience stores; changes in economic conditions which may affect the Company's business and stock price; the effect of restrictive covenants in the Company's credit facility on the Company's business; 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 consumer preferences and perceptions; changes in the price or availability of commodities; changes in the Company's suppliers' ability to provide quality products to the Company in a timely manner; the effect of the media's reports regarding food-borne illnesses and other health-related issues on the Company's reputation and its ability to obtain products; the seasonality of the Company's operations; increased insurance and/or self-insurance costs; the Company's ability to select appropriate restaurant locations, construct new restaurants, complete remodels of existing restaurants and renew leases with favorable terms; the Company's ability to comply with existing and future health, employment, environmental and other government regulations; 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.
Source: CKE Restaurants, Inc.