CKE Restaurants, Inc. Reports Period Six Same-Store Sales

CKE Restaurants, Inc. (NYSE: CKR) announced today period six company-operated same-store sales for the period ended July 13, 2009, for Carl's Jr.(R) and Hardee's(R).



'The decline in our same-store sales remains our management team's primary focus,' said Andrew F. Puzder, chief executive officer. 'Period six was a particularly difficult period from a same-store sales perspective as both brands were rolling over strong prior year sales due, in part, to last year's government stimulus checks. However, we are encouraged by the results of some of our recent sales-building initiatives.

'During period six, we reintroduced our popular Teriyaki Burger at Carl's Jr. supported with an ad starring Audrina Patridge from 'The Hills' television show. Since the commercial started airing, the Teriyaki Burger has been among the best selling premium burgers on the menu. We offer it on all three of our burger platforms starting at approximately $2.89. In addition, we are testing Hardee's Made-From-Scratch(TM) Biscuits at a Carl's Jr. location in Buena Park, California. This test is looking very encouraging so far and we are now planning to expand the test to a wider group of restaurants. While the initial sales results have been strong, we are now working through both equipment and operations issues in the wider test.

'Also in period six, Carl's Jr. began running a limited time 2 for $4 Western Bacon Cheeseburger promotion supported with our commercial starring Top Chef's Padma Lakshmi, who provocatively eats and describes the taste of a Western Bacon Cheeseburger in the ad. Since we introduced the promotion, sales of this product have increased substantially. Given current commodity costs, our profit margin at the 2 for $4 price point is still very good.

'At Hardee's, we promoted a lower priced breakfast sweet-good item known as 'Biscuit Holes', which we make with our famous Made-From-Scratch buttermilk biscuit dough, then roll them in cinnamon-sugar, and serve them with a cup of icing for dipping. We supported this product on air during period six with humorous ads that featured actual consumers coming up with alternative, often inappropriate, names for the product. In addition to generating a significant amount of press attention from this ad campaign, the Biscuit Holes are also proving to be a popular alternative for those customers who would normally be looking for a donut or pastry for breakfast.

'We are also very encouraged by the opening sales performance of new restaurants. A franchisee-owned Carl's Jr. in Douglas, Arizona set a new record for first week sales at $108,596. A company-operated Carl's Jr. restaurant located in Porterville, California, which opened in January 2009, was the previous one-week record-setter, bringing in $107,638. So despite the continuing tough economy, Carl's Jr. is setting sales records in new and existing markets, continuing to grow its unit count and giving customers what they want - premium quality burgers at fair prices.

'While not an excuse, as noted above, both brands are rolling over very difficult same-store sales comparisons from the prior year. Our management team is working diligently to bring same-store sales back to positive territory, while staying focused on maintaining our brand image, consumer perceptions regarding the taste and quality of our products, as well as our profitability.

'Although blended same-store sales declined by 5.0% during period six, the trend improved from period five (which was a decline of 5.2%), even though the prior year comps were more difficult in period six than in period five for both brands. On a two-year basis, blended same-store sales for period six increased 0.2%.

'With respect to the brands, for period six, Hardee's same-store sales declined 3.6%, compared to an increase of 5.7% for period six of fiscal 2009. On a two-year basis, Hardee's same-store sales increased 2.1%. Hardee's trailing-13 period average unit volume was $1,006,000 in period six, which compares to $970,000 for period six last year. On the last day of period six, Hardee's introduced the French Dip Thickburger, Ranch Bacon Fries and the Southwest Chicken Salad.

'Same-store sales for Carl's Jr. declined 6.1% for period six as compared to an increase of 4.9% for period six last year. On a two-year basis, same-store sales decreased 1.2% for period six. Carl's Jr.'s trailing-13 period average unit volume totaled $1,492,000 in period six, which compares to $1,523,000 for the same period last year,' Puzder concluded.

Logos, product and company names mentioned are the property of their respective owners.

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