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CPK Lifts Forecast as Sales Climb

Same-store revenue rises 7.5% during the third quarter. The earnings estimate excludes several charges.

September 29, 2004|Julie Tamaki | Times Staff Writer

California Pizza Kitchen Inc. raised its third-quarter earnings estimate, crediting stronger-than-expected same-store sales.

The Westchester-based chain of 169 premium pizza restaurants said in a statement released late Monday that it anticipated earnings of 25 cents to 26 cents a share during the third quarter ended Sept. 26, up from its previous forecast of 22 to 24 cents.

Analysts had forecast a per-share profit of 24 cents for the third quarter, according to Thomson First Call.

Same-store sales -- which include only stores open at least a year -- climbed 7.5% during the third quarter, compared with the company's forecast of 3.5% to 4.5%. Revenue rose 14% to $106.1 million.

The company said its projected earnings excluded several charges it expected to incur during the quarter, including the closure of three stores, costs associated with anticipated legal resolutions and accelerated depreciation due to store remodeling. The company said it would discuss the scope of the charges when it released its third-quarter earnings on Oct. 21.

California Pizza Kitchen founders Rick Rosenfield and Larry Flax have been trying to reverse the company's fortunes since they returned in July 2003 to share chief executive duties, focusing their efforts on a group of struggling stores opened in 2002 and 2003 in thinly populated areas.

The company's announcement prompted Mike Smith, an analyst at Oppenheimer & Co., to raise his third-quarter earnings estimate for the company by a penny to 25 cents a share. Smith said he was surprised by the company's plans to close three more stores, however.

"They took a fairly significant write-down in the third and fourth quarter last year for real estate that wasn't particularly working that had been acquired in the previous two years," Smith said. "If I were in their shoes, I guess I would have done all that and safely blamed someone else for it."

California Pizza Kitchen stock closed Tuesday up 86 cents, or 4%, at $21.58 on Nasdaq.

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