CKE Restaurants beats expectations despite a 13% earnings drop

Posted Jun 25th 2009 12:30PM by Mark Fightmaster
Filed under: Earnings Reports, CKE Restaurants (CKR)

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.

Tags: Carls Jr., CarlsJr., cke restaurants, CkeRestaurants, CKR, eating, eating out, EatingOut, fast food, FastFood, Hardees, inthenews, restaurants