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CPK's 1Q profit rises on cost control

LOS ANGELES California Pizza Kitchen Inc. officials on Thursday credited cost savings and efficiency measures for better-than-expected first quarter results.

For the quarter ended March 29, the Los Angeles-based casual-dining chain reported net income of $2.6 million, or 11 cents per share, compared with net income of $2.5 million, or 9 cents per share, in the year-ago quarter. In April, officials had predicted that per-share earnings would range between 9 cents and 10 cents.

The company's earnings also topped the average analyst forecast of 10 cents a share, according to Thomson Financial.

First-quarter revenue fell 2.2 percent to $161.1 million, CPK said. Same-store sales slid 5.9 percent, compared with a 0.4-percent increase during the year-ago first quarter.

Average weekly sales during the quarter for the chain’s 194 full-service namesake restaurants were $61,308, compared with $65,489 for the same quarter last year.

“Our management team responded quickly to market conditions and we were able to drive profitability through rapid implementation of cost savings and efficiency measures," Rick Rosenfield and Larry Flax, California Pizza Kitchen’s co-chief executives, said in a statement. "We also effectively leveraged lower cost of goods sold in addition to lower corporate expenses to achieve results that exceeded expectations. Our continued focus on service also rewarded us with record guest satisfaction scores.”

During the first quarter, CPK opened one full-service restaurant in Wellesley, Mass., and franchise partners opened units in Dubai and near Mexico City. Rosenfield and Flax said the company would continue with moderate new restaurant development in the second quarter, with plans to open three full-service units along with one international franchise location, a unit in Guadalajara, Mexico, that opened this week.

The company’s outlook for the second quarter includes same-store sales declines between 5.5 percent and 6.5 percent, and earnings per share between 18 cents and 20 cents.

“While we expect the weak economy to keep pressure on our industry, we will continue to focus on increasing guest traffic, menu innovation, operational efficiency and cost control,” Rosenfield and Flax said.

The company said it also plans to broaden its relationship with Kraft, which produces the brand’s frozen pizza line, as well as the new Flatbread Melts introduced earlier this year.

 

CPK operates, licenses or franchises 254 restaurants under the full-service California Pizza Kitchen and L.A. Food Show brands, as well as the limited-service CKP ASAP.

Contact Lisa Jennings at [email protected].

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