CARPINTERIA Calif. Discounting by competitors and high unemployment in California continued to take a toll on same-store sales in October at CKE Restaurants Inc.’s Carl’s Jr. and Hardee’s chains, officials said Wednesday in announcing preliminary results for the third quarter.
For the four weeks ended Nov. 2, the company reported blended same-store sales down 5.4 percent, compared with an increase of 1 percent for the same period the previous year.
At Carl’s Jr., with its core market in economically hard-hit Southern California, same-store sales were down 7 percent for the month, compared with flat results for the prior-year period. At Hardee’s, same-store sales were down 3.4 percent, compared with an increase of 2.1 percent the same period last year.
For the third quarter, ended Nov. 2, same-store sales fell 5.2 percent for Carl’s Jr. and 1.8 percent for Hardee’s, officials said.
“Unemployment rates have continued to worsen while our competitors have escalated the deep-discount burger wars,” said Andrew Puzder, CKE’s chief executive. “Both of these events are having an adverse impact on same-store sales results for everyone, including us.”
CKE officials, however, are forecasting that restaurant-level margins will improve from 17.9 percent in the third quarter last year to between 18 percent and 18.3 percent for the current fiscal year’s third quarter, despite an increase in depreciation expense related to the company’s ongoing remodeling program.
“We continue to move forward with our sales-building initiatives focused on increasing awareness of our excellent value-for-the-money premium products, such as the recently introduced Parmesan Chicken Sandwich at Carl’s Jr., and our mid-tier-priced items like The Big Carl and The Big Hardee burgers,” said Puzder.
Carpinteria, Calif.-based CKE Restaurants, which operates or franchises 1,212 Carl’s Jr. and 1,915 Hardee’s restaurants, is scheduled to release full third-quarter results on Dec. 8.
Contact Lisa Jennings at [email protected]