Shares of California Pizza Kitchen Inc. surged as much as 18 percent Wednesday on good vibes from stock upgrades one day after the casual dining restaurant chain raised its earnings forecast for the second quarter.
The L.A.-based company settled up 15.4 percent to $31.94, reaching a four-year record price in heavy volume nearly nine times higher than the average.
In response to the improved guidance, California Pizza Kitchen's stock rating was upgraded to "sector perform" from "sector underperform" by John S. Glass at CIBC World Markets; to "buy" from "hold" by Barry M. Stouffer at BB & T; Capital Markets; and to "outperform" from "sector perform" by David A. Geraty at RBC Capital Markets.
After Tuesday's closing bell, California Pizza Kitchen raised its earnings forecast for the second quarter ended July 3, due to improved same-store sales and savings resulting from a new payment system.
The company said earnings per share are now expected to be 32 cents for the second quarter, up from an earlier forecast in the range of 26 cents and 28 cents per share. The average analyst estimate was 28 cents a share.
California Pizza Kitchen credited the increased guidance partly to a 4 cent per share gain from unredeemed paper gift certificates as the company shifted to a new payment system that allowed it to launch an electronic gift card program.
The company also said that same-store sales rose 8.6 percent during the quarter, while total revenue jumped 16.5 percent to $119.4 million from $102.5 million in the year-ago period. Analysts had expected revenue of nearly $114.3 million.
For reprint and licensing requests for this article, CLICK HERE.