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LOS ANGELES -- California Pizza Kitchen, Inc. (Nasdaq:CPKI), announced that same-store sales at the 153-store chain rose 2.7 percent during its first quarter, which ended March 30, 2003.
According to a news release, net income was $4 million (21 cents a share), compared with $3.7 million (20 cents a share) during the same period in 2002.
Total revenues for the period were $82.9 million, versus $70.2 million in the same period last year.
Average weekly sales from January through March at CPK's full-service restaurants were $54,171, down from last year's average of $54,420.
After officers of the company revealed in an April 22 conference call that the company could miss 2003 consensus earnings estimates by as much as a nickel, CPK's stock took a beating on April 23, falling 15 percent by late afternoon. The stock closed the day before at $23.87 per share.
In the release, CPK President and CEO Fred Hipp said a convergence of unique circumstances such as the soft economy, harsh winter weather and low consumer confidence hurt the company's results. He also blamed "sales volatility and inefficiencies in our newer restaurants" for high labor costs that hurt profits.
According to published reports, a 20 percent jump in the chain's labor costs resulted from the recent addition of labor-intensive menu items that didn't sell as well as expected.
"We have begun to address this issue with a 'best practices labor team' that is actively reviewing labor standards and staffing needs for our restaurants," Hipp said in the release. "This will enable CPK to ... streamline efficiencies at the store level ... ."
According to the release, CPK expects second quarter comp-store sales will rise no more than 1.5 percent. The shift of the Easter holiday to the accounting period is expected to reduce same-store sales by $400,000 (0.4 percent).
The company doesn't expect its same-store sales picture to brighten much for the second half of the year: only 1 percent to 2 percent. However, it said it remains on track to open at least 22 new units in 2003.
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