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®.
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Brand
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Period 6
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Year to Date
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FY 2010
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FY 2009
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FY 2010
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FY 2009
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Carl’s Jr.
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-6.1
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%
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+4.9
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%
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-5.6
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%
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+3.8
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%
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Hardee’s
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-3.6
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%
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+5.7
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%
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+0.5
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%
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+1.0
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%
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Blended
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-5.0
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%
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+5.2
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%
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-3.0
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%
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+2.5
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%
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“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 $1,523,000 for the same period last year,” Puzder
concluded.
Period Six Revenue Trends
Company-operated
For period six, consolidated revenue from company-operated restaurants
(exclusive of all franchise-related revenue and royalties) was
approximately as follows:
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Brand
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Period 6
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Year to Date
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($ in millions)
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FY 2010
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FY 2009
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FY 2010
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FY 2009
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Carl’s Jr.
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$48.2
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$49.4
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$287.5
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$293.4
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Hardee’s
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$38.2
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$40.0
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$227.2
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$242.8
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Total
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$86.4
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$89.4
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$514.7
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$536.2
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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.
CKE Restaurants, Inc.
Investor Relations, 805-745-7750