As a matter of general operating procedure, California Pizza Kitchen (NASDAQ:CPKI) knows its toppings. Barbecued chicken. Caramelized pears. Second-quarter earnings.
Second-quarter what?
Yes, the trendy pizza and pasta eatery is topping itself for the June quarter. Strong sales and better-than-anticipated margin improvement find CPK now expecting to earn $0.32 a share for the period. Back in April, it had projected net income to come in between $0.26 and $0.28 a share.
The installation of a new Point of Sale system will result in a few favorable onetime charges, but the real story here is that the concept is just flat out cooking. Last year, the company had a stellar June period. Comps were up a vibrant 7.3%. It's pretty hard to stack superior results on top of superior results, but that's just what CPK did, with comparable sales rising 8.6% this time around.
I've always been a big watcher of comps when it comes to restaurant stocks. A company like Cheesecake Factory (NASDAQ:CAKE) that can brandish a nearly impeccable record of same-unit sales growth will always garner more of my respect than a company that is growing sales quickly through expansion alone.
CPK's recent headstrong performance -- see exactly how the March quarter played out -- also provides a welcome contrast to traditional pizza specialists like Papa John's (NASDAQ:PZZA) and Domino's (NYSE:DPZ), which have more of a sawtooth operating performance.
Yes, CPK knows its toppings. Shareholders should be grateful.
Related bites:
- Read about how CPK fared during its March quarter.
- That came on top of an already solid 2004 showing.
- High cheese prices are a big concern in the pizza space from time to time.
Longtime Fool contributor Rick Munarriz enjoys CPK's Thai pizza. He does own shares in Cheesecake Factory. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
