CKE Restaurants Inc. said Wednesday it expects a "substantial" loss in its fiscal first quarter, primarily from restaurant closings and the sale of its Taco Bueno chain to a private investment group. CKE lost $2.45 million a year ago.
The struggling Anaheim company, which operates Hardee's and Carl's Jr. fast-food chains, agreed in March to sell its Taco Bueno restaurants for $72.5 million to an affiliate of Jacobson Partners, a private equity buyout firm. The money will be used to reduce debt, the company said.
Shares of CKE fell a penny to $2.91 on the New York Stock Exchange.
"We embarked on a strategy in November 1999 to dispose of assets and close unprofitable stores to generate cash to reduce our level of indebtedness," said Andrew F. Puzder, CKE's president and chief executive officer. "That strategy, although it has resulted in substantial losses for financial reporting purposes, is necessary to position the company for future profitable operations."
The company will release its earnings June 26.