LOS ANGELES California Pizza Kitchen Inc. upped its second-quarter earnings forecast as continued cost-cutting strategies overcame its falling revenue and same-store sales.
The company's stock price rose 4.5 percent Thursday after the announcement late Wednesday to close at $14.35.
For the quarter ended June 28, CPK reported a 3.2-percent decline in revenue to $170.9 million. Same-store sales fell 6.5 percent at full-service California Pizza Kitchen restaurants, versus a 1.5-percent increase reported for the second-quarter a year ago. The result was at the low end of the company's previous same-store sales guidance.
Still, the company said it expected second-quarter per-share earnings to range between 24 cents and 25 cents, up from prior expectations of earnings between 18 cents and 20 cents, and that same-store sales declines would ease with the help of "creative sales initiatives" planned for the third quarter, which officials did not detail.
Rick Rosenfield and Larry Flax, CPK's co-chief executives, said, "Our preliminary second-quarter results and increased earnings guidance reflect the progress we've made with regard to managing costs and driving operating efficiencies as our industry continues to face significant pressure on the revenue line."
The 255-unit chain's Thank You Card program, in which guests are given the chance to win an array of prizes for repeat visits, was successful, they said, and new restaurant openings are showing strong weekly sales averages.
Three full-service restaurants opened during the second quarter in Norcross, Ga.; and Sacramento and Valencia, Calif. Franchise partners in Mexico also opened a unit in Guadalajara.
In addition, the company reduced its outstanding debt by $17 million during the quarter to a $50 million balance.
The full second-quarter earnings report is scheduled for Aug. 6.
Contact Lisa Jennings at [email protected].
