Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from the line of Brian Moore from Wedbush Morgan. Please proceed.
Brian Moore - Wedbush Morgan Securities, Inc.
Good morning. This first question for Andy relates to Carl’s Jr. in California—two parts. First, great period 2 costs here. Wonder if you would maybe talk to any benefit you had in period 2 from what I think has been abnormally warm weather here in California. And/or the number of remodeled stores. And then secondly, I guess in light of all the focus on the economy here--high gas prices, sub-prime—if you could speak to what’s been your thoughts on the good or bad economic factors year-to-date affecting costs; have you seen any movement around day parts or products? For example, the Angus Burger versus a less premium hamburger, or even beverage sales, as it relates to the Carl’s Jr. menu.
Andrew F. Puzder
I would be happy to. We, in California--out West-- we are certainly glad to be out of what seemed to be the bad winter weather this year, which is continuing in the Midwest and Southeast, but really cleared up here in period 2. Our period 2 numbers were not a whole lot different than our period 1 numbers on days when the weather was good. In a lot of days in California in period 1 there was a lot of rain and people just don’t go out when it rains. As you know, Brian, it’s kind of like when there’s a blizzard in the Midwest or Southeast, when it rains here in California. But now that that’s cleared up I think we’ve seen the real impact that our brand positioning and our not going with the pack can have on our business.
Yes, we saw the Chili Burger, which is the burger we’ve been promoting in period 1 and period 2—and we promote it—we have a single, which is the normal ¼ pound burger, a double, and the $6 version. And you really see all of them selling well. The $6 Black Angus Burger sells real well. We’ve got an add-on here now where we’re promoting the fact that we’re using all Black Angus Burger in our $6 burgers and I think that’s helping our premium quality statement.
I think people realize that you can come to Carl’s and get a burger that is as good or better than you can get in the sort of mid-tier restaurants and you can get it at fast-food price, you can get it at fast-food speed; there is something for your wife to eat, there is something for your kids to eat. You know, a family can come. And if you’re a young, hungry guy you realize you don’t need to go to a higher priced place to get a really delicious, big, thick Black Angus Beef Burger.
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