Carl’s Jr. Parent Posts Hefty Revenue Gains; Stock Dips Anyway

CKE Restaurants, the parent company of the Carl’s Jr. chain, reported solid gains in profit and revenue for the fourth quarter and fiscal year ended Jan. 27, but the company’s stock price responded with a two-day decline.

The stock fell Monday by $1.125 per share to $21.50 in New York Stock Exchange trading, then slipped 12.5 cents Tuesday to close at $21.375

Industry analysts tied the drop to profit-taking by shareholders. “CKE moved up from $18 five days ago to above $22, which is a pretty nice little return in a rocky market,” said Robert M. Derrington, an industry analyst with Equitable Securities Corp. in Nashville.

CKE met or exceeded earnings estimates of half a dozen Wall Street analysts who follow the fast-food company, which operates 660 Carl’s Jr. restaurants and holds interests in the Rally’s, Checkers and Casa Bonita restaurant chains.

Net income for the year rose to a record $22.3 million, or 73 cents per share, from $10.9 million, or 39 cents, a year ago. Revenue rose 32% to $614 million, up from $465 million. For the quarter, CKE reported that net income rose to a record $6.2 million, or 18 cents per share, up from $3.2 million, or 11 cents per share. Quarterly revenue rose more than 60% to $170 million from $106 million.

CKE also reported that same-store sales increased for the seventh consecutive quarter.

‘We’ve been spoiled over the last several years by extraordinary sales and earnings growth,” Derrington said. “But to expect trees to grow to heaven isn’t realistic. CKE is going to settle down into a solid growth rate that will occasionally be spiked by acquisitions.”