LOS ANGELES – Carl's Jr. (search) and Hardee's (search) parent CKE Restaurants Inc. (CKE) Tuesday reported a quarterly profit that exceeded Wall Street estimates as lower labor and workers' compensation costs helped boost margins at its hamburger restaurants, sending shares up 5 percent.
Net income for the fiscal second quarter ended August 15 was $8.4 million, or 13 cents per share, compared with a net loss of $12.7 million, or 22 cents per share, a year ago.
Excluding an $11 million charge for buying stock options from its former chairman, CKE earned 28 cents a share.
On that basis, Wall Street analysts had expected the company to report earnings of between 19 cents and 21 cents per share with an average view of 19 cents per share, according to Reuters Estimates.
Same-store sales, a key retail measure, rose 1 percent at Carl's Jr. but were flat at Hardee's.
The results "were very good given the struggles in the same-store sales," said JMP Securities analyst Dean Haskell, who has a "market outperform" rating on CKE shares and owns none. "They kept costs under control and they reported a good quarter because of good operating margins."
In a statement, CKE Chief Executive Andrew Puzder (search) said the company plans to place more emphasis on the low cost of its products given that high gasoline prices are weighing on consumers' wallets.
In recent years, sales at both CKE burger chains have benefited from a strategy of marketing higher-priced burgers like Hardee's "Thickburger" and Carl's Jr.'s "Six Dollar Burger" to a primarily young, male demographic.
The chains have also scored with their offbeat advertising, including a racy carwash spot this summer featuring a skimpily clad hotel heiress Paris Hilton (search) munching on a burger while washing a Bentley.
In the last few months, however, same-store sales have slowed at both chains in part because consumers have been hard-hit by rising pump prices.
CKE shares were up 5 percent at $12.50 in after-hours trade on the Inet electronic brokerage from their New York Stock Exchange close of $11.90.
As of Tuesday's NYSE close, CKE shares were down 18 percent for the year, compared with a 7.9 percent decline in the shares of rival burger chain Jack in the Box Inc. (search) and a 5.7 percent drop in the Standard & Poor's Restaurants index.