CKE To Stay Course With Premium Products As 2nd-Q Profit Jumps

Nation’s Restaurant News:

CKE Restaurants Inc., parent of the Carl’s Jr. and Hardee’s brands, said it would continue to focus on its premium offerings despite “aggressive discounting and literal giveaways” by its quick-service rivals.

CKE officials spoke to investors in a conference call Thursday, a day after releasing the company’s fiscal 2009 second quarter results, which included a 30-percent jump in profit on reduced costs and modest sales growth.

Andrew Puzder, CKE’s president and chief executive, said both chains would “steer clear” of using value items to drive traffic and would rely instead on higher-priced items, such as the Prime Rib Burger, which it promoted in the second quarter.

“It’s not part of our long-term strategy to compete in the low-quality, low-priced value area,” Puzder said. “We have a hard time seeing how our competitors can be making much of a profit selling double cheeseburgers at 99 cents.”

CKE officials also said the company would focus on remodeling efforts, overseas growth and dual-branding its burger restaurants with its Red Burrito and Green Burrito concepts.

For its second quarter ended Aug. 11, CKE posted net income of $12.3 million, or 23 cents a share, compared with profit of $9.4 million, or 15 cents, a year ago. Earnings were helped in the latest quarter by the company’s share repurchase plan, which reduced the number of common shares outstanding by 11 million, CKE said.