After a week of stellar results in the fast-food industry, it seems as if the Carl's Jr. and Hardee's boys want to mix it up. CKE Restaurants
But is the company looking for trouble, or is it simply misunderstood? It's easy to be confused by taking that hearty deficit at face value and stacking it up against a CEO beaming that "We are pleased with our 2004 results, and ended the year on a strong note."
Well, the truth lies somewhere in the middle, actually. CKE's red quarter came at the expense of onetime charges. Yes, the company still lost money in the March period, but it only amounted to a penny per share after the charges.
Moving beyond that, you see yet another sandwich chain that, like rivals McDonald's
CKE has grown comps for three consecutive quarters. Margins are improving, particularly at the Hardee's chain, which is getting a welcome makeover. The company closed out the fiscal year with consolidated revenues inching up just 4% to $1.4 billion, but you get the feeling that the company is going to get better.
Over at Hardee's, the average customer has gone from spending $4.10 to $4.55 over the past year. Nothing wins over new franchising opportunities like success, and CKE is dabbling in it right now.
So, don't get 86'd over the company's steep $0.86 quarterly shortcoming. There's no head-on collision in the drive-through lane. While CKE sports a good chunk of debt on its balance sheet, the fast-food specialist may still be worthy of being served while still hot, bunless, and misunderstood.
Are you a fan of fast food, or do you think that the industry's recent moves to improve its edibles haven't gone far enough? Is cutting out drive-through joy rides the key to shedding some pounds? Which chain is serving up the healthiest foodstuffs? All this and more -- in the Fools Fighting Fat discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz knows how to order by number at the local fast-food joints. He does not own shares in any of the companies mentioned in this story.