Industry News | April 1, 2009

Hardee's, Carl's Jr. Can't Fight the Economy

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CKE Restaurants, Inc. (NYSE:CKR - News) announced today that period two same-store sales for the four weeks ended Mar. 23, 2009, for Carl’s Jr. and Hardee’s fell 2.7 percent.

“It is important to emphasize the headwinds we faced from the ongoing deep discounting of low-quality menu items by our competitors, which negatively impacted sales at both our brands,” CEO Andrew F. Puzder says. “In addition, Carl’s Jr. rolled over the most difficult sales comparison of the year for either brand and transitioned into a new product offering during the latter half of the period.”

Puzder continues: “On a very positive note, Hardee’s period two same-store sales increased 3.1 percent, which also follows a period one same-store sales increase of 3.2 percent, validating the success of our premium product strategy.

“Also noteworthy, as of the end of the period, Hardee’s trailing-13 period average unit volume was $1,004,000, surpassing our initial $1 million goal for the brand. When our current management team took over in fiscal 2001, Hardee’s average unit volume was just $716,000 and the overall opinion of the brand was highly unfavorable. Since then, we have transformed the lunch and dinner menu, upgraded our facilities and improved the level of service to our guests.

“Today, Hardee’s ranks at or near the top of consumer surveys for taste and quality of food, friendliness of employees and cleanliness of stores – a scenario many thought was impossible less than a decade ago. In addition, in this difficult sales environment, Hardee’s sales are positive 3.2 percent year to date.”

“We are working diligently to get Carl’s Jr. back on the positive same store sales track to which we are accustomed although the poor condition of the California economy, which is worse than most other states, makes growing sales particularly difficult at this time. Carl’s Jr. made progress in this respect during the period as its two year same store sales results improved from negative 2.2 percent in period one to negative 1.0 percent in period two.”

The company will report same-store sales results for period three of fiscal year 2010, ending Apr. 20, 2009, on or about Apr. 29, 2009.