CPK Blames Weather for Lowered Outlook
Higher labor costs stemming from last month’s winter storms forced California Pizza Kitchen Inc. to lower its first-quarter earnings estimate, the Los Angeles-based company said Tuesday.
The sit-down pizza chain said it now expects to earn 20 to 22 cents a share for the quarter ending March 31, down from earlier estimates of 22 to 24 cents.
In the year-ago period, the company’s first-quarter earnings were 20 cents a share.
CPK shares gained 31 cents Tuesday to $24.11 on Nasdaq.
Heavy weather last month -- from blizzards on the East Coast to ice storms in Dallas and heavy rain in California -- cost CPK the equivalent of 40 days of restaurant sales, or $300,000, the company said.
Twenty-one of the 152 restaurants the company operates, licenses or franchises were affected by severe weather, Chief Financial Officer Greg Levin said.
Company executives said labor costs would be the biggest factor in the reduced earnings. CPK had more employees on staff than it needed and didn’t have time to adjust work schedules to match the diminished demand.
It’s not “just a California Pizza Kitchen problem,” said analyst Robert Curran of San Francisco-based Pacific Growth Equities.
“Nationwide, restaurants in February had a difficult time because of harsher-than-normal weather,” Curran said.