Say hello to your new burger buddy. CKE Restaurants
Nice? It was actually even better than that. The company didn't have much of a tax bite during last year's period. Back that out and you find the bottom-line results nearly tripling over the past year. Sure, the company's net income took a hit last year, when it acquired and retired the stock options of its retiring chairman, but no matter how you slice it, CKE posted respectable earnings growth.
The top line didn't match the spurt at the bottom. We're talking about a slow yet steady burger-flipping specialist here. Sales grew just 4.5% higher for the period, fueled largely by a 4.8% improvement in comps at Carl's Jr. and a 3% uptick in comps at Hardee's.
CKE's success in keeping its eateries busy is tied to its premium offerings. Unlike a streamlined peer like Checkers that has carved a cozy living serving up cheap burgers, or the chicken-spiked-salad upscale bent at larger chains like Burger King
CKE watches over a fast food empire with more than 3,000 franchised and company-owned stores.
Now trading at 22 times projected earnings this year -- and 18 times next year's expected profits -- CKE shares may seem as expensive as its signature Six Dollar gourmet burger. However, CKE is starting to come into its own after posting a loss three years ago. The company is currently riding a welcome combination of factors, including favorable commodity pricing, a reduction in corporate overhead, and a healthy share-repurchase program.
The company is also in the process of sprucing up its Carl's Jr. stores. Watch comps there over the next few quarters, as a healthy response to the prototype can further fuel the healthy advances.
Healthy advances? Well, at least a healthier advance than you would be taking if you stuck to a diet of the company's bacon guacamole Angus beef burgers on buttered buns.
Longtime Fool contributor Rick Munarriz is always up for a good burger even though he doesn't live near a Hardee's or a Carl's Jr. at the moment. He does not own shares in any of the companies mentioned in this story. Rick 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.