LOS ANGELES Calif. California Pizza Kitchen Inc. reported Thursday a 7-percent decline in earnings for the second quarter, as the casual-dining operator’s sales continued to slide.
For the quarter ended June 28, net income fell to $6.1 million, or 25 cents per share, versus earnings of $6.6 million, or 26 cents per share, in the same quarter a year ago.
Latest-quarter revenue fell 3.2 percent to $170.9 million. Same-store sales at full-service restaurants fell 6.5 percent.
In the midst of the industry’s sales slump, CPK said it has been able to drive its earnings through cost controls, including a reduction in labor expenses and food costs. The company also did not report any store closure costs, compared with more than $800,000 of exoense booked in the second quarter of last year.
“While a lower cost structure is very important, we understand the need to drive traffic and revenue as our industry continues to face top-line pressure,” Rick Rosenfield and Larry Flax, CPK’s co-chief executives, said in a statement.
To help drive sales in the current third quarter, the company has launched an advertising campaign, a new loyalty program and an internal sales-driving program to “drive the average revenue per employee,” the chief executives said.
Company officials projected same-store sales would decline between 6.5 percent and 7.5 percent for the third quarter.
During the second quarter, CPK opened units opened in Norcross, Ga., Sacramento and Valencia, Calif., and franchise partners opened a restaurant in Guadalajara, Mexico.
In other news, CPK said earlier this week that it planned to expand into India for the first time with a franchise agreement with JSM Corporation Pvt. Ltd and Daud Arabian Trading. Under the agreement, a minimum of 15 full-service restaurants will open in India over the next decade, with the first scheduled to open in 2010.
JSM is based in Mumbai and is the exclusive franchisee for Hard Rock Café in India. Daud Arabian Trading, headquartered in the United Arab Emirates, is a subsidiary of the Daud Group of Oman, which franchises brands such as McDonald’s, Yo! Sushi and Gourmet Burger Kitchen in the Middle East. Daud is affiliated with Gourmet Gulf Company, a CPK franchisee in Dubai.
Based in Los Angeles, California Pizza Kitchen operates or franchises 252 restaurants under the California Pizza Kitchen, CPK ASAP and L.A. Food Show brands.
Contact Lisa Jennings at [email protected].
