Los Angeles-based California Pizza Kitchen Inc. (NASDAQ:CPKI) plans to expand in China and has opened its first company-owned restaurant in the nation's largest city, Shanghai.
One of the leading casual dining restaurant chains has also opened its first international office in China to work with franchisees and to support company growth in that country. Moreover, both these initiatives indicate the company’s intension to strengthen its footprint in the Asia Pacific region over the long term.
The company stated that it is opening the restaurant in Sinan Mansions, a commercial hub in the LuWan District, latest entertainment center. Given the area attracts, we believe California Pizza Kitchen’s restaurant is strategically well-placed for growth. The restaurant is also geared for business with a plethora of items in its menu, apart from its popular pizzas and salads.
As one of the world’s largest emerging markets, China provides immense expansion opportunities. California Pizza Kitchen is also accelerating its presence in India, where it has already opened its first restaurant. The company plans to open 15 more units in India over the next 10 years. Although the company operates in eleven international markets, it is concentrating on the Asia Pacific region due to its growing economy.
California Pizza Kitchen currently owns and operates 211 restaurants and franchises 56 restaurants. It is on track to open three company-owned full service restaurants in the fourth quarter of fiscal 2010 in the U.S. In addition, California Pizza Kitchen’s franchisees plan to open two international full-service restaurants within the same time-frame.
California Pizza Kitchen currently has a Zacks #3 Rank (short-term Hold rating). We also reiterate our long-term Neutral recommendation.