CKE income down in quarter, year

by Allison Sebolt
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CARPINTERIA, CALIF. — Facing general economic pressures, CKE Restaurants, Inc. posted net income for the year ended Jan. 28 of $31,076,000, equal to 52c per share on the common stock, down 38% from $50,172,000, or 79c per share, during the previous year. Revenue for the year was $1,534,634,000, which was nearly flat compared with $1,542,071,000 during the previous year.

"Fiscal 2008 was a difficult year for our economy as a whole," said Andrew F. Puzder, president and chief executive officer. "A weak dollar, high energy costs, increased commodity costs and significant minimum wage increases impacted our business more than at any other time this decade. In the latter part of the year, we also experienced unusually severe weather conditions in our markets, which negatively impacted sales at both brands. As such, while we are pleased with our success in growing our same-store sales and average unit volumes, we are nonetheless disappointed with the pressures we experienced this year on our restaurant-level operating costs and our profitability."

At Carl’s Jr. same-store sales increased 1% during the year, and same-store sales were up 2% at Hardee’s stores.

"We faced severe cost pressure, and we are disappointed that these cost pressures offset the benefits of our same-stores sales and average unit volume growth leading to a year-over-year decline in profit," Mr. Puzder said.

He said some of these cost pressures were associated with ramping up restaurant development, but the biggest portion came from commodity cost increases and minimum wage increases.

For the fourth quarter ended Jan. 28, the company posted net income of $98,000, down 99% from $10,331,000, or 15c per share, during the same quarter of the previous year. Revenue for the quarter was $338,119,000, down 3% from $349,232,000 during the same quarter of the previous year.

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