- WHITE PAPERS
California Pizza Kitchen released more depressed numbers from its most recent earnings statement for the quarter ended October 3, including a net loss of $7.5 million for the quarter. Comps, however, seem to be slowly creeping back, largely helped by the company’s “Thank You” cards reintroduced this quarter.
“With our successfully executed Thank You Card Program, full service comparable restaurant sales were positive for the first time in more than two years,” co-CEOs Rick Rosenfield and Larry Flax said in a statement. “We also managed our labor, direct operating and occupancy costs which allowed us to drive non-GAAP net income compared to the prior year quarter.”
The silver lining was the aforementioned positive comps: Full service comparable restaurant sales increased 0.7 percent.
However, net loss was negative $7.5 million, compared to $5.8 million in income the corresponding 13 weeks in 2009. Year to date, the company’s net loss has been $846,000, compared to $14.5 million this time last year.
Total revenues decreased 0.2 percent to $164.5 million, down from $164.8 million in Q3 '09. Year-to-date, revenues have fallen by about 2 percent to $484.3 million from $496.8 million last year.
“Looking ahead, we plan to drive traffic and comparable sales through menu innovation and by providing an exceptional dining experience for our guests,” said Flax and Rosenfield. “We are implementing strategies to further control expenses and identifying leverage opportunities to strengthen our full service platform. This in turn will drive growth in the key ancillary channels of franchise expansion and branded grocery products.”
Some of the measures the company’s leaders are introducing to enhance the customer dining experience may backfire, according to B Riley analyst Conrad Lyon. For example, his team reviewed the new “Ziosk” in test at a Long Beach, Calif., location. The Ziosk is a table-top kiosk that allows customers to order and pay at the table. The screen also displays select menu items, can take orders, and administer real-time surveys.
Takeaway observations were mixed. “Anecdotally, servers indicated that sales of appetizers and desserts were up as a result of the device," reported Lyon. “ Our concern is the message that is sent to a customer – convenience over experience – may imply less loyalty.”