Change in Focus Helps to Boost Carl’s Jr. Profits : Fast food: A re-emphasis on premium burgers returns some lost business to the chain.

Executives at Carl’s Jr. said lower food costs and an advertising campaign touting the chain’s premium menu burgers helped boost profits in the second quarter ended Aug. 14.

CKE Restaurants Inc., the Anaheim-based parent company of the Carl’s Jr. chain, reported quarterly net income rose by 213% to $2.8 million, or 15 cents per share, from $864,000, or 5 cents per share, in the second quarter a year ago. Revenue rose slightly to $108.1 million from $105.1 million. Carl’s Jr. reported a $6.6-million operating profit--the chain’s largest quarterly operating profit in five years. It also ended a five-year slide in sales at restaurants that have been open for at least one year. Sales at stores open for at least a year, an important measure of success in the restaurant industry, rose by 3%. A year ago, same-store sales fell by 1%.

Company officials linked the chain’s upbeat quarterly report to the recent decision to abandon an ill-fated “value menu” experiment that was designed to reposition Carl’s Jr. as a low-priced alternative. The chain now is returning its advertising and marketing programs to the chain’s traditional forte, premium burgers, which are more profitable.

“We’re focusing on our good food,” said Tom Thompson, CKE Restaurants president and chief operating officer. “We’re talking about the Famous Star hamburger, the Double Western cheeseburger, our great-tasting hamburgers . . . and that’s triggered a reaction among people, it’s signaled them to come back.”

CKE Restaurants’ improved profitability was aided by the ongoing conversion of Carl’s Jr. restaurants to serve both the chain’s traditional burgers as well as the Green Burrito chain’s Mexican-style fast-food. “About one-half of a percent of the overall sales increase, a big chunk of the increase, comes from Green Burrito,” said CKE Vice President Loren Pannier. Sales at the eight Carl’s Jr. restaurants with the Green Burrito menu are up by 30% over a year ago, Pannier said. Eventually, the company will incorporate the Mexican-style menu at about 200 of its 650 restaurants.

CKE reported that net income in the first half more than tripled to $4.7 million, or 26 cents per share, from $1.5 million, or 8 cents per share, a year ago. Revenue rose to $245.7 million from $240.3 million.

CKE’s stock closed Tuesday at $13.25, up 50 cents a share, in New York Stock Exchange trading.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

CKE Profits Are Cooking

CKE Restaurants Inc., the parent of Carl’s Jr., reported second-quarter earnings triple those for the same period last year. Revenue for the period, which ended Aug. 14, edged up 3%. Figures in millions of dollars except per-share data:

*--*

2nd qtr 2nd qtr 6 months 6 months 1994 1995 1994 1995 Revenue $105.3 $108.0 $240.3 $245.7 Net income (loss) 0.86 2.81 1.52 4.72 Per share (loss) 0.05 0.15 .08 0.26

*--*

Source: CKE Restaurants Inc.; Researched by JANICE L. JONES / Los Angeles Times