CARPINTERIA Calif. CKE Restaurants Inc. reported a nearly 15 percent increase in profit during the third quarter, as higher unit-level margins at corporate restaurants and lower costs helped to offset declining sales.
CKE, which operates and franchises the Carl’s Jr. and Hardee’s brands, said high unemployment — both in California where the majority of the Carl’s Jr. chain operates and among both brands’ target audience of young men — continued to hurt sales.
For the quarter ended Nov. 1, same-store sales fell 5.2 percent at Carl’s Jr. and declined 1.8 percent at Hardee’s.
CKE indicated that those headwinds continued through the month of November. The company reported on Tuesday an 8.1 percent decline in same-store sales at Carl’s Jr. and a 1.4 percent decline at Hardee’s for the four-week period ended Nov. 30.
Andrew Puzder, CKE chief executive, said new initiatives are expected to improve same-store sales in the fourth quarter, including a continued focus on premium products, such as Hardee’s Portobello Mushroom Melt Thickburger. The company also plans to promote healthier menu options with cost-effective digital media; as well as launching a new line of premium entrée salads at Carl’s Jr. Both chains owned by CKE have been reluctant to promote lower-price points over its premium menu offerings.
In addition, the company will continue its practice of using sexy spokeswoman to appeal to “young, hungry guys,” as CKE often says, and it announced an “attention-getting” advertising campaign for the current fourth quarter starring reality show celebrity Kim Kardashian.
For the quarter ended Nov. 2, CKE posted a profit of $6.2 million, or 11 cents per share, compared with earnings of $5.4 million, or 10 cents per share, for the same quarter a year ago.
Latest-quarter revenue totaled $324.2 million, down 4 percent from $336.6 million a year ago.
At the end of the third quarter, Carpinteria, Calif.-based CKE operated or franchised 1,221 Carl’s Jr. and 1,913 Hardee’s locations in 42 states and 14 countries.
Contact Lisa Jennings at [email protected].