Los Angeles-based California Pizza Kitchen, Inc. (CPKI) recently raised its earnings guidance in the range of 15 cents to 17 cents per share, compared to its previous projection of 10 cents to 15 cents per share. The upside in outlook was driven by a lower-than-expected decline in its comparable-store sales in the second quarter.
California Pizza Kitchen reported second-quarter revenues of $163.1 million, down 4.6% year over year while comparable-store sales saw a decline of 5.9%. The rate of decline in comparable-store was lower than the year-ago period and the company’s recent forecast of a decrease in the range of 6% to 7%.
In second quarter 2010, California Pizza Kitchen experienced a shortfall in its comparable store sales due to the absence of the “Thank You” Card promotion that boosted sales in the second quarter of fiscal 2009, as a result of which the company trimmed its second quarter comparable-store sales and earnings outlook on June 21.
In order to revive its top-line growth and plug its falling comparable-store sales, California Pizza Kitchen has implemented several sales-building programs. These initiatives include new menu offerings, a new wine list featuring over 30 distinctive wines, a central CPK Call Center to serve customers’ off-premise dining orders, as well as a catering program. Moreover, to drive traffic, California Pizza Kitchen will reintroduce the thank-you card program on July 28, and also include a cash prize of $100,000.
The company is so far experiencing an improvement in its third quarter same store sales, down just 0.6% year over year.
California Pizza Kitchen is slated to release its second-quarter 2010 results on August 5. The current Zacks Consensus Estimate for the second quarter is 13 cents per share, representing an annualized decline of 47.5%.
With respect to earnings surprises, over the trailing four quarters, California Pizza Kitchen has posted in line with the Zacks Consensus Estimate for three quarters and outperformed the same in one quarter. The average earnings surprise was a positive 4.35%. This implies that the company has beaten the Zacks Consensus Estimate by the same magnitude over the last four quarters.
Founded in 1985, California Pizza Kitchen restaurants offer pizzas with non-traditional toppings such as BBQ chicken and Thai chicken as well as pastas, salads, sandwiches, appetizers and desserts. The company operates restaurants under three formats: California Pizza Kitchen – a full-service restaurant; CPK/ASAP – a fast-casual format; and LA Food Show – a full-service, casual dining with a varied menu.
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