News

Katrina, gas prices hurting Chuck E. Cheese's Pizza

September 12, 2005

IRVING, Texas — CEC Entertainment, parent of Chuck E. Cheese's Pizza, said the one-two punch of high gas prices and closures at units affected by Hurricane Katrina will hurt third-quarter profits.

According to a regulatory filing, 17 company-operated restaurants were closed at some point during or after the hurricane, and that cost the business approximately 128 operating days.

"The welfare of our employees and their families are our foremost concern," said Dick Frank, chairman and chief executive officer at the 505-unit company. "We will continue to direct our efforts towards ensuring the safety of our employees, assisting the local communities during the recovery process and resuming the normal operations of our restaurants."

Through the first 10 weeks of the third quarter of 2005, comparable-store sales already were down 5 percent. Much of that decline was blamed on the pinch high gas prices have put on families' wallets.

"Consequently, investors should not rely on previous earnings guidance for the fourth quarter," said Chris Morris, senior vice-president and chief financial officer.