CKE Restaurants F2Q10 (Qtr End 8/10/09) Earnings Call Transcript

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2009-09-17 09:36:19.0

Tags: Call Transcript, Earnings, Roth Capital Partners LLC, Same-store Sales, Big Carl, Seeking Alpha, CKE Restaurants Inc.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Tony Brenner with Roth Capital Partners.

Tony Brenner - Roth Capital Partners

We’re at a juncture where year-ago same-store sales comparisons begin to be much easier than they have been, consumer confidence is turning up and is actually higher now than it was a year ago. We are allegedly at the beginning of an economic recovery. I understand why you are being cautious with respect to same-store sales but given those factors, would you be losing ground if in fact your sales don’t become positive fairly soon?

Andrew F. Puzder

Well, if you mean losing ground in comparison to our competitors, obviously it would depend on what happened with their same-store sales too. We are looking forward to easier same-store sales rollovers. We are now through the stimulus check period and remember last year in May and June, people got stimulus checks so that really throughout the summer really had a great impact. Last year we all thought we were geniuses and this year it’s -- sales were down. We’re through that and as you can see from even just last period, both brands are doing better and we would hope that they would improve and we certainly have plans to improve them. The Big Carl has been a real successful product for us. We have the Big Hardee just started this week but we have high hopes for that. We’ve got -- we’re doing a test of, as we’ve discussed before, although we don’t -- I don’t have any new details so I didn’t get into it in the presentation, we’re testing the made-from-scratch biscuit rollout at Carl’s and we are making some moves digitally that we think will add sales. So we’re doing everything we can to assure the same-store sales increase and that we rollover the next few months very strong but there was a lot of -- is anticipated when you talked about the economy in your question and I’ll say that if your anticipations are correct, there should be very good results. If your anticipations are incorrect, then unemployment continues to accelerate in California, for example, that could negatively impact Carl’s but I hope you’re right -- I hope things are turning around and we are going to see some real improvement in the economy.

Tony Brenner - Roth Capital Partners

Just one quick follow-up -- you implied that in the second half of period eight, Carl’s sales were meaningfully better as you rolled out the Big Carl promotion. Can you provide a little color or spin on that degree of improvement?

 

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