CARPINTERIA Calif. CKE Restaurants Inc., owner of the Carl’s Jr. and Hardee’s quick-service brands, cited higher commodity, labor and interest expenses in reporting a 52.5-percent drop in third-quarter net income.
For the 12 weeks ended Nov. 5, the operator or franchisor of 3,052 restaurants earned $6.2 million, or 11 cents per share, compared with earnings of $9.5 million, or 14 cents per share, in the year-ago third quarter.
The company recorded a $3.9 million year-to-year increase in interest expense from both its increased debt load, which was used to fund share repurchases, and the interest rate swap that was completed during the quarter.
Corporate revenue for the latest quarter dipped 0.8 percent from a year ago to $351.6 million. Revenues were negatively impacted by the refranchising of 106 HardeeÕs restaurants during the current fiscal year, CKE said. Third quarter same-store sales at corporate locations increased 0.7 percent at CarlÕs Jr. and 2.7 percent at HardeeÕs.