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At first glance the quality of the quarter is suspect and P8 same-store sales for Carl’s Jr. continue to decelerate on a 2-year basis.

As expected lower food costs saved the day for CKE, but two items highlight the challenges the company faced in making the numbers in the quarter – (1) a lower tax rate and (2) At Carl’s Jr. there was an adjustment to workers compensation expense that benefited labor costs, mitigating the decline in store level margins.

We will have more after we have a chance to talk to the company.

CKR also reported same-store sales for period 8.  While the absolute decline was the best in five months at the Carl’s Jr. concept, on a two-year average basis the numbers slipped 1.1% sequentially.  Hardee’s remained flat sequentially on a 2-year average basis at -0.1%.

CKR – NO REASON TO BE OPTIMISTIC - carljr

CKR – NO REASON TO BE OPTIMISTIC - HAR P8SSS