CARPINTERIA Calif. CKE Restaurants Inc., parent of the Carl’s Jr. and Hardee’s chains, reported on Wednesday a steep year-to-year drop in fourth-quarter profit to a just break-even level, on increased interest expense, higher operating costs and slowed sales.
For the quarter ended Jan. 28, net income fell to $98,000, or nil per share, from year-earlier profit of $10.3 million, or 15 cents per share. Interest expense in the latest quarter rose to $15.6 million, from $3.9 million a year earlier, and included a $9.7 million write-down on the value of the company’s interest rate swap agreements.
Latest-quarter revenue fell 3.2 percent to $338.1 million. The dip reflected the sale of 136 corporate Hardee’s locations to franchisees and quarterly same-store sales gains of 1.4 percent at Carl’s Jr. and 0.4 percent at Hardee’s.
CKE’s operating income for the latest quarter fell $1 million from a year earlier to $15.5 million, and the company cited increased food and packaging costs, occupancy and labor costs.
Andrew F. Puzder, the company’s president and chief executive, said, “A weak dollar, high energy costs, increased commodity costs and significant minimum wage increases impacted our business more than at any other time this decade.”
Looking ahead, CKE said preliminarily results for March blended same-store sales show a 2-percent gain, including a 6-percent jump at Carl’s Jr. and a 2.5-percent drop at Hardee’s. The sales results reflect the four weeks ended March 24.
For the company’s full fiscal year, ended Jan. 28, CKE earned $31.1 million, or 50 cents per share, compared with year-earlier profit of $50.2 million, or 72 cents per share. Latest-year revenue fell 0.5 percent to $1.53 billion.
CKE and its franchisees operate 1,141 Carl’s Jr. restaurants and 1,926 Hardee’s units.