CKE Restaurants Profit Jumps

Same-store sales rise and operating costs decline.
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CKE Restaurants

(CKR)

posted 68% growth in second-quarter earnings Tuesday amid higher same-store sales and lower operating costs at its burger chains.

The operator of Hardee's and Carl's Jr. chains reported net income of $14.2 million, or 20 cents a share, up from $8.4 million, or 13 cents a share, a year earlier. Analysts polled by Thomson First Call expected earnings of 19 cents a share.

The latest quarter's results included $11.6 million in tax expense, compared with just $500,000 a year earlier, along with a $3.6 million charge related to a convertible note conversion. The year-ago quarter included an $11 million charge related to the retirement of the company's chairman. Excluding items, income before taxes rose 48% year over year.

CKE's revenue increased to $300.2 million from $286.6 million. Same-store sales rose 4.8% at Carl's Jr. and 3% at Hardee's company-operated stores.

"On the operations side, both Carl's Jr. and Hardee's were able to increase same-store sales while reducing total restaurant operating costs as a percentage of company-operated revenue during second quarter, thanks to our premium quality product strategy, successful product promotions, and favorable food commodity costs," the company said.

CKE said it reintroduced its "very popular" pastrami burger during the quarter at Carl's Jr., and it launched a "meat-as-a-condiment product" called the Philly Cheesesteak Thickburger.