LOS ANGELES California Pizza Kitchen Inc., noting that its ASAP fast-casual concept needs fine-tuning, said Tuesday it reduced its second-quarter per-share earnings outlook by 2 cents because of costs associated with halting the construction of a planned ASAP unit.
California Pizza Kitchen, which operates, licenses or franchises 213 restaurants under its full-service namesake casual-dining brand and the ASAP concept, said it now expects to earn 21 cents per share for the second quarter ended July 1. A year earlier, the company posted per-share earnings of 20 cents.
Excluding the costs for starting and then stopping the planned ASAP location, California Pizza Kitchen would have earned 23 cents per share, which would have been within its previously announced earnings target of between 23 cents per share and 24 cents per share.
The ASAP brand, which boasts about 24 units, “needs to be refined,” the company’s chief financial officer, Sue Collyns, said in an interview. “The capital costs are being addressed.”
The company had previously alerted shareholders that termination costs for the halted unit would be forthcoming, and the expenses are “flowing through” in the second quarter, Collyns added.
Despite the speed bumps with the ASAP brand, California Pizza Kitchen’s top line continues to buck the casual-dining segment’s negative trends. Its second-quarter corporate revenue increased 16.4 percent to $158.6 million, aided by a same-store sales increase of 5.4 percent and the opening of four new restaurants, two of which were opened by franchisees.
Collyns said the company’s positive same-store sales results, which come at a time when many casual-dining chains are posting negative trends in the face of macro-economic pressures, is aided by California Pizza Kitchen’s more upscale customer demographic and internal initiatives, like a weekly regional director conference call, that help address problems or disseminate best practices at individual units.
“Every week we discuss sales, cost of goods, and other controllables,” Collyns said. “If we see a trend we don’t like, we can address it straight away. If initiatives need to be put into place, we can execute them the next day.”
