CKE Restaurants 2Q Profit Slips As Sales Fall

CARPINTERIA, Calif. (AP) — CKE Restaurants Inc., which owns and operates the Carl's Jr. and Hardee's fast food chains, said Wednesday its second-quarter profit slipped less than 1 percent as cost controls helped offset weaker-than-expected sales.

However, the sales results, which fell below Wall Street expectations, sent CKE shares tumbling 77 cents, or 6.8 percent, to $10.50 in aftermarket trading, having closed regular trading at $11.27.

Carpinteria, Calif.-based CKE earned $12.25 million, or 22 cents per share, in the three months that ended Aug. 10. That is down slightly from the $12.34 million, or 23 cents per share, it earned a year earlier.

The results matched analysts' average estimate, according to a Thomson Reuters poll. However, revenue fell 5 percent to $336 million from $352.5 million, missing analysts' $341 million forecast.

Sales at stores open at least a year fell 4.6 percent in the second quarter. Same-store sales are a key measure of a company's health since they measure sales at established stores, not those newly opened.

The company said same-store sales at company-owned Carl's Jr. locations declined 6.1 percent, due to the particularly weak economy in California. At Hardee's, same-store sales decreased 2.7 percent also due to weak economic conditions. CKE said both chains benefitted from lower commodity costs for beef, cheese and oil products.