CARPINTERIA Calif. CKE Restaurants Inc., parent of the Carl’s Jr. and Hardee’s quick-service brands, said increased expenses led to a 5.1-percent drop in its fiscal 2008 first quarter profit, even as revenue rose 1.6 percent to $481.8 million.
For the quarter ended May 21, CKE’s net income fell to $15.4 million from $16.2 million in the year-ago quarter. Per-share earnings in the latest quarter remained unchanged from a year ago at 23 cents, mainly because CKE had fewer shares outstanding in the latest quarter after buying back nearly 4.4 million shares for about $83.3 million.
The company said its first-quarter earnings were negatively affected by a $1.3 million year-over-year increase in stock-based compensation expenses and $1.3 million in total costs related to the relocation of a Carl’s Jr. food distribution center and a new distribution management system. Total operating costs also increased by 2.5 percent in the latest quarter, reflecting increases in food, packaging and labor costs.
First-quarter same-store sales results were flat at Carl’s Jr., CKE reported, but increased 1.8 percent at Hardee’s. For the subsequent four weeks ended June 18, CKE said same-store sales have improved, up 2.8 percent from a year ago at Carl’s Jr., and up 2.6 percent at Hardee’s.
CKE and its franchisees operate 1,101 Carl’s Jr. restaurants and 1,905 Hardee’s restaurants. The company said last month it would sell its La Salsa Fresh Mexican Grill chain to Baja Fresh owner and investor David Kim. That deal should close in the current second quarter, CKE reported. Its terms were not disclosed.