(Adds CEO quote, details on profit, SAN DIEGO to dateline)
SAN DIEGO, Sept 17 CKE Restaurants Inc CKR.N,
the parent of Carl's Jr and Hardee's, on Wednesday posted a
quarterly profit that topped Wall Street targets, helped by
higher sales at established outlets, lower restaurant costs and
But the company, known for its oversized hamburgers like
the Prime Rib Burger, also said that fast-food industry
discounting tempered sales during the first four weeks of the
Net income for the fiscal second quarter ended Aug. 11 was
$12.3 million, or 23 cents per diluted share, compared with
analysts' average call for earnings of 20 cents per share,
according to Reuters Estimates.
In the year-earlier quarter -- when the company had 11
million more shares outstanding -- CKE income was $9.4 million,
or 15 cents per diluted share.
CKE said sales at established company-operated restaurants
increased 3.6 percent during the quarter, compared with the
year-earlier quarter's increase of 2.4 percent.
Sales at company-owned Carl's Jr stores open at least 13
months were up 3.8 percent, while sales at CKE-owned Hardee's
restaurants were up 3.3 percent.
Restaurant operating costs declined as reduced payroll and
employee benefits costs more than offset higher food and
Total revenue was $352.5 million, down almost 3 percent
from $363.1 million a year earlier.
Revenue from company-operated restaurants fell more than 7
percent to $267.1 million, reflecting the sale of 155 Hardee's
restaurants to franchisees.
At the end of the quarter, CKE had a total of 3,100
franchised, licensed or company-operated restaurants in 42
states and in 14 countries, including 1,170 Carl's Jr.
restaurants and 1,917 Hardee's restaurants.
In a separate release, CKE said same-store sales at
established restaurants rose 0.4 percent during the four-week
period ended Sept. 8, as industry discounting tempered sales.
The Carpinteria, California-based company said sales at
stores open at least 13 months were down 0.1 percent at Carl's
Jr and up 1.1 percent at Hardee's outlets.
"We believe both brands' sales results were tempered by
competitors' aggressive discounting and literal giveaways, a
tactic our company declined to employ because of its negative
impact on margins," CKE Chief Executive Andrew Puzder said in a
CKE, which does not heavily promote its value menu, said
the company saw a decline in sales of its lower-margin value
products during the period.
The company also said certain Hardee's markets were hit by
the remnants of Hurricanes Gustav and Hanna and Tropical Storm
Fay, which rolled through the Midwest and Southeast during the
CKE had closed down 11.4 pct at $11.73 Wednesday on the New
York Stock Exchange and were unchanged after hours.
(Reporting by Lisa Baertlein; editing by Gunna Dickson)