California Pizza Kitchen Inc. (CPKI), a leading casual dining restaurant chain, recently declared preliminary fourth-quarter 2009 results, but trimmed its earnings guidance. The company now expects its fourth-quarter earnings in the range of 15 cents to 17 cents a share, down from 16 cents to 18 cents projected earlier.
The pizza restaurant chain said revenue climbed 3.8% during the quarter to $167.8 million from $161.7 million delivered in the year-ago quarter. Comparable-store sales for the quarter under review dropped 5.8%, reflecting a year-over-year improvement of 140 basis points, and remained well within the guidance range of negative 5.5% to negative 6.5%.
In order to revive its top-line growth and plug its falling comparable-store sales California Pizza Kitchen (CPK) 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.
The shares of California Pizza Kitchen jumped 40 cents or 3% to close at $13.90 on Wednesday, but fell 20 cents or 1.4% in aftermarket trading.
California Pizza Kitchen’s comps and traffic have sagged, as consumers with lower disposable income are dining out less or looking at cheaper alternatives, like fast food restaurant operators, such as Yum! Brands, Inc. (YUM), McDonald’s Corporation (MCD) and Domino’s Pizza, Inc. (DPZ).
In a separate story, California Pizza Kitchen renewed its agreement with Gourmet Gulf Company, an existing franchise partner. According to the terms of the agreement, Gourmet Gulf Company will open 19 restaurants throughout the Middle East over a decade with planned openings of at least one restaurant in the United Arab Emirates (UAE), Kuwait, Oman, Saudi Arabia, Qatar and Bahrain .
Earlier, the franchise partner was slated to open a minimum of three California Pizza Kitchen restaurants in the UAE over a period of two years.
Founded in 1985, California Pizza Kitchen operates, licenses or franchises 253 locations, of which 205 are company-owned and 48 are either franchised or licensed. The company also has a licensing deal with Kraft Pizza Company, which manufactures and distributes a line of California Pizza Kitchen frozen pizzas.
Read the full analyst report on “CPKI”
Read the full analyst report on “YUM”
Read the full analyst report on “MCD”
Read the full analyst report on “DPZ”
Zacks Investment Research
