Cailornia Pizza Kitchen

Texas Roadhouse shares down after CEO's exit

Shares of Texas Roadhouse tumbled Thursday after the surprise exit of the restaurant operator's chief executive.

THE SPARK: CEO and President G.J. Hart left to take the top post at California Pizza Kitchen. Hart had been with Texas Roadhouse for 10 years and was a member of the company's board.

Hart is replacing CPK's co-founders Rick Rosenfield and Larry Flax. Private equity firm Golden Gate Capital completed its $470 million acquisition of California Pizza Kitchen last month.

THE BIG PICTURE: Kent Taylor, Texas Roadhouse founder and chairman, is returning as CEO, a position he held from 2000 to 2004. Long-time Chief Financial Officer Scott Colosi was promoted to president and Vice President of Finance Price Cooper was promoted to chief financial officer.

Even with the experienced management team in place, Texas Roadhouse and the broader restaurant industry may face a challenging economic environment ahead. The Labor Department said that the Consumer Price Index rose by 0.5 percent last month. That was the biggest increase since the spring.

THE ANALYSIS: Jefferies & Co. Inc. analyst Andy Barish said he thought that the company should be able to weather Hart's departure.

"We are surprised by the announcement and acknowledge this translates into some near-term uncertainty, but we have confidence the team can manage the transition, given their continuity and strong organizational focus," Barish wrote.

SHARE ACTION: The stock was down $1.33, or 9.3 percent, at $13.04 in late trading. The broader market was also down, with the Dow Jones industrial average down 4 percent and the Standard and Poor's 500 down almost 5 percent.

California Pizza Kitchen Continued « Gluten-free is Life

Earlier this summer California Pizza Kitchen debuted gluten-free pizza on their menu. I was giddy. I loved CPK pre-gluten-free and couldn’t wait to go back and try their new pizza. Well,we did,and it was great,but our spirits were quickly dampened by the news that there could be major cross contamination issues going on in the kitchen.

I decided to go back and investigate to see what was going on and whether what I had heard about their procedures was indeed true. I was saddened by what I found out. While it had appeared that CPK went to great lengths to add the gluten-free pizza to their menu,they didn’t consider some of the most important issues. Cross contamination is real and can be very serious. Sure,some of those with Celiac Disease don’t react right away (or even at all),but some do and it isn’t pretty. This doesn’t even take into consideration those that have a true allergy (to wheat or gluten) that results in anaphylactic shock. 

Emails and tweets were sent to CPK to try to get them to understand the seriousness of this situation. If gluten-free pizza is going to be on the menu and more importantly,marketed to those on the gluten-free diet,the procedures needed to be changed or the pizza needed to be removed from the menu. 

Shortly after I tweeted CPK,I received this response:

While I haven’t heard anything from CPK since this tweet,despite my having tweeted them twice in the past week,I did hear some news today. Gluten Free Philly reported on Facebook the following news:

Kudos to CPK for taking the initiative to pull this menu item until they can work out the issues. While I hope that they can bring the pizza back,I do understand that procedure changes need to be made across the company for this to happen. Maybe they will take a look at some of the other companies out there who are making it work – Zpizza,Boston’s Gourmet Pizza,Naked Pizza,Mellow Mushroom and Uno Chicago Grill.

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