LOS ANGELES California Pizza Kitchen Inc. has slashed its per-share earnings outlook for 2008 by as much as 36 percent, saying continuing macroeconomic challenges are likely to result in negative to flat same-store sales for the year. The gourmet pizza restaurant operator joined many of its peers in reducing its outlook for the year, as slowed sales and increased costs continue to pressure the industry.
Comparable-store sales for 2008 are now expected to fall 1 percent or at best remain unchanged from the year earlier, the company said, and earnings per share are now expected to total between 54 cents and 60 cents. In November, California Pizza Kitchen had forecast a same-store-sales gain ranging from 2 percent to 3 percent, and 2008 earnings of between 85 cents and 92 cents per share.
For the fiscal 2007 fourth quarter ending Dec. 30, the company announced an 11.6-percent increase in revenues to $162.9 million. Same-store sales increased about 1.8 percent, compared with the 6.9 percent increase during the year-ago fourth quarter.
California Pizza Kitchen had previously expected a comparable-store sales increase of 2 percent to 3 percent for the quarter, after a strong 2.8-percent same-store sales jump in October. Yet, same-store sales started to slow, rising just 1.7 percent in November and 0.7 percent in December, the company said.
Because of the lower-than-expected sales, earnings per share for the quarter are expected to total between 16 cents and 18 cents, down from previous projections of 22 cents to 23 cents per share. Final results are expected Feb. 14.
Also this week, Farallon Capital Management LLC and affiliated funds continued to boost their stake in the Los Angeles-based California Pizza Kitchen.
On Monday, the hedge fund held a 9.1-percent stake, according to filings with the U.S. Securities and Exchange Commission, after purchasing stock between Dec. 27 and Jan. 7 for per-share prices ranging from $13.66 to $15.51. The move follows purchases made in December, when Farallon increased its stake to 7.3 percent. The fund has yet to present any activist entrees toward the company.
California Pizza Kitchen operates, licenses or franchises 228 restaurants, of which 193 are corporate locations.
