LOS ANGELES -- One day after California Pizza Kitchen Inc. cut fourth-quarter and full-fiscal 2002 forecasts, the company 's stock price dropped 13.5 percent. The Los Angeles-based pizza innovator's share price fell $2.69 to $17.21 on the NASDAQ.
For the quarter, CPK reported net income of $3.4 million, down from $3.5 million a year ago. Total revenue, however, rose to $64 million from $55 million last year.
CPK stated that the revised projections are due to soft sales following the Sept. 11 terrorist attacks. Same-store sales rose 1.8 percent overall in the third quarter overall, and had been up 3.5 percent before the attacks. But shares have declined roughly 40 percent since the beginning of 2001 and have slipped nearly 3 percent since trade resumed following Sept. 11.
"Despite all these near-term negatives, we don't believe the concept is broken," wrote John Glass, a restaurant analyst for Deutsche Banc Alex. Brown, in a stock research note published by Reuters. "New store productivity and profitability is still running ahead of plan and cash flow is still sufficient to execute current growth plans," he wrote.
Glass also lowered fourth-quarter earnings estimates to 14 cents a share from 19 cents, brought his fiscal 2001 forecast down to 68 cents a share from a projected 74 cents, and lowered fiscal 2000 earnings estimates to 80 cents a share from 97 cents. He also projected that comp-store sales will drop 1 percent in the fourth quarter, before rising 1 percent in fiscal 2002.
Overall, Glass believes CPK's stock picture still is promising, as he maintained a "buy" rating on the shares.