California Pizza Kitchen Inc. reported a 31-percent dive in second-quarter profit as the shift of its Thank You Card program put a dent in sales.
For the quarter ended July 4, the Los Angeles-based company had net income of $4.2 million, or 17 cents per share, compared with earnings of $6.1 million, or 25 cents a share, a year ago.
Second-quarter revenue declined 4.6 percent to $163.1 million, reflecting a same-store sales drop of 5.9 percent. The company blamed the sales decline on tough comparisons with last year's second quarter, when CPK ran its popular Thank You Card promotion, which offers guests the chance to win prizes on return visits.
The company said the program is now in progress and runs through Oct. 8 and that the cash grand prize had been raised to $100,000.
Co-chief executives Rick Rosenfield and Larry Flax said sales in the current third quarter have improved, with same-store sales to date down just 0.9 percent. The company projects third-quarter same-store sales to range between down 1 percent to up 1 percent.
Rosenfield and Flax said that new menu items rolled out in June, including two pizzas two sandwiches, pasta and dessert, were performing “extremely well,” and that the company plans to expand its retail offerings.
“Product innovation remains a hallmark of our brand and we will continue to create unique, craveable menu items to drive traffic," Rosenfield and Flax said in a statement. "We also look forward to the August launch of two new licensed products outside the frozen category in line with our strategy of leveraging the brand in this higher margin channel.”
The company said it is continuing to explore strategic alternatives, which it said in April could include a possible sale or merger.
Los Angeles-based CPK operates or franchises 261 restaurants under the California Pizza Kitchen, CPK ASAP and L.A. Food Show brands.
Contact Bret Thorn at [email protected].
