LOS ANGELES Blaming higher food costs, California Pizza Kitchen Inc. reported a 30-percent drop in first-quarter profit Thursday, and predicted that the industry has yet to see the “bottom” of the current tough economic times.
For the quarter ending March 30, the casual-dining chain reported net income of $2.5 million, or 9 cents per share, compared with $3.6 million, or 12 cents a share, in the year-ago period. Results, however, exceeded projected earnings of 7 cents to 8 cents per share.
Same-store sales grew 0.4 percent in the quarter, and company officials said they expect comparable sales to remain flat for the second quarter and down 1 percent to flat for the year. Revenues for the quarter were up 10.3 percent to $164.7 million.
Rick Rosenfield and Larry Flax, co-chief executives for CPK, said they believed consumers would continue to be “under pressure for some time.” Stores in California, which accounts for about 42 percent of the chain’s comparable sales base, were among those hardest hit, showing a decline of 1.8 percent, compared with the year-ago period’s increase of 4.2 percent.
New initiatives planned for the rest of the year include a soon-to-be-announced rollout of a summer menu, remodels, marketing programs and technology initiatives to enhance efficiency.
CPK also announced a new $150 million credit facility with a syndicate of banks. The five-year facility, which replaces the existing $100 million credit line, includes an option to be increased up to an additional $50 million and matures in May 2013. The funding will be used for working capital, capital expenditures, and continuing share repurchase plans.
CPK operates, licenses or franchises 239 locations, including the full-service namesake brand, the fast-casual CPK ASAP variant and one LA Food Show.
