Hardee’s Drop-Off Cuts CKE Forecast

CKE Restaurants Inc. lowered its earnings estimate for the fiscal year Monday after a bigger-than-expected January drop in same-store sales at the Hardee’s burger chain, its largest subsidiary.

Shares of the Santa Barbara-based fast-food operator, which also owns the Carl’s Jr. chain, lost 29 cents to $3.24 on the New York Stock Exchange.

For the eighth straight reporting period, CKE reported a drop in same-store sales for the Hardee’s brand -- this one an 8.3% decline. For its fiscal year ended Jan. 27, Hardee’s same-store sales were off 2.4%, compared with a 0.2% gain a year earlier.

The sales drop alone should not have been enough to push earnings below the earlier forecast of 50 cents to 52 cents a share, said Amy Greene, an analyst with Avondale Partners. She suggested that more bad news may lie ahead when the company releases its full-year report in late March.

“There may be some other things that may not have gone the way they had hoped,” said Greene, noting that the 5% Hardee’s decline she had anticipated still would have netted the company 51 cents a share. “Seven-tenths of 1% is not enough to change the earnings.”

Dennis Lacey, CKE’s chief financial officer, said the earnings drop announced Monday was due to the sales dip alone. He said the company would no longer give earnings estimates, citing the volatility within the fast-food sector.

“Accordingly,” he said, “we expect earnings per share to be below our previous estimate of 50 to 52 cents for the fiscal year.”

The company did not issue a specific number, but Anton J. Brenner, an analyst with Roth Capital Partners of Newport Beach, said he was lowering his estimate to 45 cents a share.

At Carl’s Jr., which operates largely in the West and Southwest, sales fell by 1.5% from those of last year’s 13th reporting period, which covers the final four weeks of the fiscal year, but gained 2.1% for the quarter and 0.7% on the year.

CKE’s entry in the growing fast-casual dining segment, La Salsa, dipped 0.7% for the period and 0.2% for the fourth quarter but rose 0.8% for the year.