CKE Restaurants (NYSE: CKR) announced yesterday results for fiscal year 2003 third quarter.
Earnings per share were up sharply at $0.16 per diluted share compared with a loss of $0.03 per share in third quarter 2002. Net income increased to $9.5 million compared with a loss of $1.7 million in the prior year.
Gross margin percentage of sales at Hardee's increased 40% year-over-year to approximately 13%. Gross margin percentages at Carl's Jr. declined slightly, however, from 21% to approximately 20%.
After reporting five consecutive quarters of same store sales gains, Carl's Jr. reported a 5% decline for the third quarter over the previous year. Hardee's, which has posted positive gains for the last four quarters, reported a 1% decline in same store sales for the third quarter.
The positive earnings reported were heavily impacted by three one-time transactions: a tax benefit of $5.5 million, a gain of $3 million on the sale of Checkers Drive-In Restaurants stock, and a gain on the retirement of debt of around $700,000. Given these one-time benefits, earnings from continuing operations were essentially flat, said CEO and President Andrew Puzder.
Puzder reiterated previous guidance of $0.50 to $0.52 for fiscal 2003.
"The QSR segment is experiencing unique pressures including significant price discounting by our competitors which has impacted our sales results. However, year-over-year margins remain stable at Carl's Jr. and continue to improve at Hardee's."
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