October 15, 2008
CKE Restaurants, Inc. Reports Positive Period Nine Blended Same-Store Sales
CARPINTERIA, Calif., Oct. 15 /PRNewswire-FirstCall/ -- CKE Restaurants, Inc. announced today period nine same-store sales for the four weeks ended Oct. 6, 2008, for Carl's Jr.(R) and Hardee's(R).
Brand Period 9 Year to Date FY 2009 FY 2008 FY 2009 FY 2008 Carl's Jr. +1.6 % -1.1 % +3.2 % +0.7 % Hardee's +0.8 % +1.3 % +1.0 % +2.3 % Blended +1.2 % +0.1 % +2.2 % +1.5 %
Commenting on the Company's performance, Andrew F. Puzder, president and chief executive officer, said, "Blended same-store sales increased 1.2 percent for period nine of fiscal 2009. We believe competitors' aggressive discounting continued to negatively impact both brands sales results. Deep discounting is a tactic we choose not to employ because it negatively impacts consumer perceptions of food quality as well as profitability for both company-owned restaurants and franchisees. Hardee's sales were also negatively impacted by the aftermath of Hurricane Ike which closed refineries in the Gulf making it extremely difficult to get gas in the Southeast where most gas stations were closed for a period of time. Both brands featured new products near the end of the period with television advertising support only during the final week of period nine. As such, this period's results reflect only a partial contribution from these products. For the fiscal year to date, blended same- store sales have increased 2.2 percent. As of the end of period nine, our blended average unit volume for our company-operated stores was $1,216,000, a $54,000 increase from the end of fiscal 2008.""Carl's Jr. reported a same-store sales increase of 1.6 percent for period nine, versus a 1.1 percent decrease in the prior year period. During the period's final week, Carl's Jr. expanded its line of Guacamole Bacon burgers. We prepare our guacamole fresh daily and include real salsa, which may explain why the Six Dollar Burger version of the burger has remained on our everyday menu since 2003. The Guacamole Bacon Six Dollar Burger features a charbroiled, 100 percent Black Angus beef patty topped with guacamole, two strips of bacon, two slices of pepper-Jack cheese, Santa Fe sauce, red onions, tomato and lettuce on a seeded bun," Puzder continued. "Guests can also order the burger on a single or double beef patty platform. Carl's Jr. promoted the Jalapeno Chicken Sandwich as well as the Monster Breakfast Sandwich(TM) during the breakfast daypart," said Puzder. "As of the end of period nine, the trailing 13-period average unit volume at Carl's Jr. was $1,529,000, a $36,000 per unit increase since the end of fiscal 2008 and an all-time high for the brand."
"Hardee's same-store sales increased 0.8 percent versus positive same- store sales of 1.3 percent last year for a two year cumulative increase of 2.1 percent. During the period's final week, Hardee's introduced Little Thickburgers, a quarter-pound sized version of both our standard one-third pound Thickburger(R) and our Cheese Thickburger. With a mid-range starting suggested retail price of $1.99 for the Little Cheese Thickburger, the burger's smaller size and price appeals to those consumers who consider our original Thickburgers too big or too expensive in the current economic environment," Puzder continued. "During the breakfast daypart, Hardee's introduced the Pork Chop 'N' Gravy Biscuit on Sept. 24. We top a boneless, breaded pork chop with our popular sausage gravy on one of our Made From Scratch(TM) buttermilk biscuits," added Puzder. "As of the end of period nine, the trailing 13-period average unit volume at Hardee's was $978,000, a $25,000 per unit increase since the end of fiscal 2008, and the highest figure for the brand since fiscal 1995, which is as far back as we can check. In addition, Hardee's period nine average unit volume was higher than any comparable period as far back as we can check."
For period nine, consolidated revenue from company-operated restaurants (exclusive of all franchise-related revenue and royalties) was approximately as follows:
Carl's Jr. $ 46.4 million Hardee's $ 38.0 million Total $ 84.4 million
"We will report same-store sales results for period 10 of fiscal year 2009, ending Nov. 3, 2008, on or about Nov. 12, 2008."
"During period nine, we revised our investors' presentation to highlight the reasons for investing in our Company during these difficult economic times. Investors can review our presentation at http://www.ckr.com/. It emphasizes our brands' core strengths, which are of increased importance during these difficult times, as well as the strength of our balance sheet, our very favorable credit agreement which runs through March, 2012, our steadily improving financial results even during the current economic slowdown and how we have diversified our risk by refranchising and emphasizing franchise growth, both domestically and internationally. We also recommit our Company to regular and open communication with our analysts and investors. Please feel free to contact us after reviewing this presentation if you would like to discuss it."
As of the end of its fiscal 2009 second quarter, CKE Restaurants, Inc., through its subsidiaries, had a total of 3,100 franchised, licensed or company-operated restaurants in 42 states and in 14 countries, including 1,170 Carl's Jr. restaurants and 1,917 Hardee's restaurants.
SAFE HARBOR DISCLOSURE
Matters discussed in this news release contain forward-looking statements relating to future plans and developments, financial goals and operating performance that are based on management's current beliefs and assumptions. Such statements are subject to risks and uncertainties that are often difficult to predict, are beyond the Company's control and which may cause results to differ materially from expectations. Factors that could cause the Company's results to differ materially from those described include, but are not limited to, whether or not restaurants will be closed and the number of restaurant closures, consumers' concerns or adverse publicity regarding the Company's products, the effectiveness of operating initiatives and advertising and promotional efforts (particularly at the Hardee's brand), changes in economic conditions or prevailing interest rates, changes in the price or availability of commodities, availability and cost of energy, workers' compensation and general liability premiums and claims experience, changes in the Company's suppliers' ability to provide quality and timely products to the Company, delays in opening new restaurants or completing remodels, severe weather conditions, the operational and financial success of the Company's franchisees, franchisees' willingness to participate in the Company's strategies, the availability of financing for the Company and its franchisees, unfavorable outcomes in litigation, changes in accounting policies and practices, effectiveness of internal controls over financial reporting, new legislation or government regulation (including environmental laws), the availability of suitable locations and terms for the sites designated for development, and other factors as discussed in the Company's filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward- looking statement, whether as a result of new information, future events or otherwise, except as required by law or the rules of the New York Stock Exchange.
CKE Restaurants, Inc.
CONTACT: John Beisler, Vice President - Investor Relations of CKERestaurants, Inc., +1-805-745-7750
Web site: http://www.ckr.com/http://www.carlsjr.com/