According to a news report from bloggingstocks.com, “The casual dining sector has been hit hard these past few several quarters, not as hard as mortgage lenders and home builders, but hard nonetheless. Consumers are squeezed between rising energy and fuel costs and a drumbeat of negative financial news. Dining out may not be high on many consumers’ to-do list.”
“California Pizza Kitchen Incorporated (NASDAQ: CPKI) is not immune to the impact of these factors. Despite the fact that recently (Aug 9) released 2Q 2007 earnings were overall good, the stock continues to drop from $25 and change in May to $19.28 on 27 August. Analysts had predicted EPS of $0.22 and the stock posted earnings of $0.21, hardly a reason for the stock to fall into disfavor. The numbers tell a much more positive story. Total revenue increased 16% to $158.6 million. Comparable restaurant sales increased 5.4% by total volume, while average weekly sales at the 200+ current restaurants increased almost 5% to $68,535. Some of this increase was due to menu price increases to keep pace with raw material price increases, but some was due to an increase in the number of customers,” said the story.