Restaurant operator CKE Restaurants (NYSE: CKR) reported first-quarter earnings of 26 cents per share after the closing bell yesterday. While the results were five cents shy of last year's results, they topped the consensus estimate by a penny per share. Quarterly revenue totaled $446.8 million, far better than the Street's estimate calling for $343.1 million. The company also announced that same-store sales dropped 5.2% during the latest four-week period. At the company's Carl's Jr. restaurants, sales dropped 7.1%, while Hardee's saw a drop of 2.7%.
The company's CEO, Andrew F. Puzder, blamed the drop on the weak economy and "fierce competitive pressure designed to attract low guest-check consumers." Puzder added that the fiscal stimulus checks from a year ago combined with rising unemployment to dent the firm's results. On a year-to-date basis, CKE's same-store sales have dropped 2.5% - 5.5% at Carl's Jr. and 1.4% at Hardee's.
While the shares have advanced in pre-market trading, the road higher is fraught with pitfalls. CKE is battling overhead resistance from its 10- and 20-month moving averages, along with the $9 level. The stock's current plight is a continuation of a downtrend that started back in the middle of 2007, and it looks like there is little chance that the downfall will turn around quickly.
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