CARPINTERIA Calif. Second-quarter profit fell about 1 percent for CKE Restaurants Inc., as lower operating costs helped offset still-declining sales at the Carl’s Jr. and Hardee’s quick-service chains.
For the quarter ended Aug. 10, CKE’s net income totaled $12.25 million, or 22 cents per share, compared with $12.34 million, or 23 cents per share, for the second quarter last year.
The Carpinteria, Calif.-based company held restaurant-level margins steady year to year between the two restaurant chains, thanks in part to favorable commodity pricing and cost management efforts, it said.
Weakness in the economy, which has reduced consumer spending, still is taking its toll, however, particularly for the Carl’s Jr. chain, which calls the hard-hit California its home base.
Latest-quarter total revenue fell 4.7 percent to $336 million. Same-store sales at corporate Carl’s Jr. restaurants fell 6.1 percent, compared with a 3.8-percent increase in the same quarter a year ago. Hardee’s saw same-store sales fell 2.7 percent, compared with a 3.3-percent increase last year.
To help drive sales, chief executive Andrew Puzder said he was excited about the recent marketing campaigns by both Carl’s Jr. and Hardee’s that take a playfully aggressive swing at McDonald’s new Angus Third Pounder — a burger that CKE contends is an imitator of its Six Dollar and Thickburger premium burgers.
Both Carl’s Jr. and Hardee’s introduced new products — the Big Carl and the Big Hardee, respectively — marketed as having more meat, more cheese and a lower price than McDonald’s iconic Big Mac.
Though Puzder has steadfastly declined to join the discounting games played by competitors, the burger war attacks on McDonald’s attempt to communicate what Puzder called a “value-for-the-money” message.
At the end of the quarter, CKE operated, franchised or licensed 1,212 Carl’s Jr. units, and 1,915 Hardee’s locations.
Contact Lisa Jennings at [email protected].