CKE Posts Profit on One-Time Events

A string of one-time events, including a $5.5-million tax break, helped the Santa Barbara-based parent of the Carl’s Jr. and Hardee’s burger chains post net income of $9.5 million for the third quarter, compared with a net loss of $1.7 million in the year-ago period, the company said Monday.

One-time events aside, however, CKE Restaurants Inc. reported what were essentially flat earnings from operations.

Also, same-store sales, a key measure of a chain’s strength, fell 5% at Carl’s Jr. after five consecutive quarters of growth. Same-store sales at Hardee’s -- which the company acquired in 1997 -- dipped 3.5%.

CKE shares closed at $4.50 on the New York Stock Exchange, down 20 cents for the day and down 64% since the stock hit a 52-week high of $12.85 in April.

In addition to the tax break, CKE gained $3 million from the sale of most of its shares of Checker’s Drive-In Restaurants. It was the second consecutive quarterly gain for a firm that saw 10 straight quarters of net losses before that.

For the quarter ended Nov. 3, the company reported earnings of 16 cents a share, compared with a loss of 3 cents in the year-ago quarter.

Revenue was $312.8 million, down nearly 4% from the $324.8 million posted in the previous year’s third quarter, primarily because of the reduction in comparable-store sales, said Steven Posey, the company’s director of finance.

The company has resisted the temptation to join in the burger wars, which have seen market leaders such as McDonald’s Corp. and Burger King Corp. aggressively push so-called value menu items priced at $1 or less.

Andrew Puzder, president and chief executive of CKE Restaurants, acknowledged in a statement that price discounting by competitors has hurt sales.

But he said the company has no plans to change course.

“They’re trying to revitalize Hardee’s by focusing on a premium product, when McDonald’s, Burger King and Wendy’s [International] are focusing on discounted menus,” said Amy Greene, a Nashville-based restaurant analyst with Avondale Partners.

“It’s going to be slow going for a while.”