CPK Profit Won’t Meet Forecasts as Sales Slow

California Pizza Kitchen Inc. said Tuesday that fiscal second-quarter earnings will be less than forecast because sales growth at its restaurants open at least a year has slowed.

Profit in the quarter ending July 1 will be 17 cents to 19 cents a share, the company said. CPK was expected to earn 20 cents, the average estimate of seven analysts polled by First Call/Thomson Financial.

The Los Angeles-based chain said same-store sales will rise 2% to 4%, at the low end of some analysts’ estimates.

Consumers may be skipping wine or dessert or ordering an $8 entree instead of a $10 one because of the slowing economy, McDonald Investments analyst Dennis Forst said.

“The indication is that the economy has been catching up with the casual-dining segment of the industry in the last few months,” said Forst, who had estimated same-store sales would rise 4%. He rates the shares “neutral.”

Same-store sales are a key measure of performance because they exclude new or closed stores.

Shares of CPK fell 89 cents to close at $21.24 on Nasdaq.

The company first sold shares to the public in August. It owns and franchises 117 restaurants.

For a period last year, the casual-dining sector benefited from the slowdown in technology as investors looked to safer havens.

However, analysts recently warned that restaurant chains probably would face tougher challenges in the coming quarters as energy costs rise and consumers eat out less.

Last week, CEC Entertainment, which operates Chuck E. Cheese restaurants, warned that April and May sales were weaker than expected.

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Earnings Sliced

California Pizza Kitchen stock surged after it went public in August 2000. But the restaurant chain warned Tuesday of weaker second-quarter earnings due to slow sales, a trend that is hitting the casual-dining sector at large.

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CPK, monthly and latest on Nasdaq

Tuesday: $21.24, down 89 cents

Source: Bloomberg News