CKE Restaurants Expects to Post Fiscal 4th-Quarter Loss

The Santa Barbara-based parent company of the Carl’s Jr. and Hardee’s chains expects to show a fiscal fourth-quarter loss of at least 6 cents a share -- returning the company to the red after two consecutive periods in the black, company officials and analysts said Tuesday.

For its fiscal year ending Jan. 27, 2003, CKE Restaurants Inc. expects earnings of 50 cents to 52 cents a share, Andrew F. Puzder, president and chief executive, said in a conference call with analysts.

Company officials did not focus on the anticipated loss in the conference call, but analysts said the clear message is that the company will lose 6 cents to 8 cents a share for the fourth quarter.

CKE shares dropped 30 cents, to $4.20, on the New York Stock Exchange.

Puzder talked with analysts a day after the firm reported net income of $9.5 million for the third quarter, but the profit was fueled by one-time events, including a $5.5-million tax break.

Puzder attributed the anticipated “slight loss” in the fourth quarter to “the seasonality of business at Hardee’s.” Those stores are located largely in the Midwest and Southeastern U.S.

“A loss in the fourth quarter was not unexpected,” said Greg Schroeder, a research analyst with Fulcrum Global Partners in New York. “I think investors will look through [the fourth quarter]” to the coming fiscal year.

“The questions I get are, ‘What are they going to do with Hardee’s?’ ” he said. “At some point you need to turn Hardee’s around. Before the stock has a strong rally, you need to have some movement” there.

Hardee’s, a brand that has seen declining market share for years, accounts for about 60% of the company-owned stores but only 7% of the operating income, said Steven Posey, the company’s finance director. The company is expected to announce an extensive re-branding campaign for the chain next year.