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CPK earnings decline in 1Q

Bad winter weather continued to take its toll on California Pizza Kitchen as profits dipped in the first quarter on declining sales, the company said Thursday.

For the quarter ended April 3, the Los Angeles-based casual-dining chain reported net income of $2.1 million, or 9 cents per share, compared with $2.5 million, or 10 cents per share, a year ago.

Revenues declined 0.5 percent from $156.7 million to $155.9 million. Same-store sales fell 2.1 percent.

Co-chief executives Rick Rosenfield and Larry Flax said earnings exceeded expectations, however, and they credited cost management initiatives at both the restaurant and corporate level.

Among efforts was a menu optimization program that resulted in 14 items being cut from the menu in February, a move that has helped reduce back of the house labor costs.

A new menu roll out planned for late June will include the elimination of seven more items from the menu. However, nine new items will be added and the summer menu will feature a more aggressive emphasis on healthful offerings.

Rosenfield said: “We launched our menu optimization program, which reduced hourly labor cost relative to the prior year and shifted our sales mix to higher margin items. We attained these productivity and margin gains without sacrificing the guest experience and look forward to realizing the full impact of this initiative throughout the year.”

Average weekly sales for the company’s 200 full-service restaurants were $57,431 in the first quarter, falling 2.7 percent from $59,082 a year ago.

Looking at the second quarter, the company projected same-store sales increases at full-service restaurants of between flat and 1 percent. Earnings will range between 20 cents and 21 cents per share, the company said.

Contact Lisa Jennings at [email protected].

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