10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended May 19, 2008

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from                      to                     .

Commission file number 1-11313

CKE RESTAURANTS, INC.

(Exact name of registrant as specified in its charter)

Delaware	33-0602639
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)
6307 Carpinteria Avenue, Ste. A, Carpinteria, California	93013
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (805) 745-7500

Former Name, Former Address and Former Fiscal Year, if changed since last report.

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     As of June 19, 2008, 52,437,320 shares of the registrant’s common stock were outstanding.

CKE RESTAURANTS, INC. AND SUBSIDIARIES
INDEX

	Page No
Part I. Financial Information
Item 1 Condensed Consolidated Financial Statements (unaudited):
Condensed Consolidated Balance Sheets as of May 19, 2008 and January 31, 2008		3
Condensed Consolidated Statements of Income for the sixteen weeks ended May 19, 2008 and May 21, 2007		4
Condensed Consolidated Statements of Cash Flows for the sixteen weeks ended May 19, 2008 and May 21, 2007		5
Notes to Condensed Consolidated Financial Statements		6
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3 Quantitative and Qualitative Disclosures About Market Risk		25
Item 4 Controls and Procedures		25
Part II. Other Information
Item 1 Legal Proceedings		26
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds		26
Item 6 Exhibits		27
Signatures		28
EXHIBIT 10.2
EXHIBIT 10.3
EXHIBIT 10.4
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1
EXHIBIT 32.2

2

PART 1. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CKE RESTAURANTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par values)
(Unaudited)

	May 19, 2008			January 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	18,868		$	19,993
Accounts receivable, net of allowance for doubtful accounts of $409 as of May 19, 2008 and $755 as of January 31, 2008		38,893			51,394
Related party trade receivables		6,101			5,179
Inventories, net		25,131			26,030
Prepaid expenses		11,047			12,509
Assets held for sale		1,238			1,038
Advertising fund assets, restricted		17,364			18,207
Deferred income tax assets, net		19,407			23,768
Other current assets		2,716			2,887
Total current assets		140,765			161,005
Notes receivable, net of allowance for doubtful accounts of $632 as of May 19, 2008 and $608 as of January 31, 2008		253			298
Property and equipment, net of accumulated depreciation and amortization of $414,719 as of May 19, 2008 and $422,192 as of January 31, 2008		495,223			503,774
Property under capital leases, net of accumulated amortization of $47,021 as of May 19, 2008 and $46,390 as of January 31, 2008		19,905			21,104
Deferred income tax assets, net		72,878			72,878
Goodwill		22,649			22,649
Other assets, net		9,861			10,003
Total assets	$	761,534		$	791,711
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of bank indebtedness and other long-term debt	$	17,975		$	18,024
Current portion of capital lease obligations		5,876			5,774
Accounts payable		56,619			80,697
Advertising fund liabilities		17,364			18,207
Other current liabilities		91,319			85,813
Total current liabilities		189,153			208,515
Bank indebtedness and other long-term debt, less current portion		313,108			333,082
Capital lease obligations, less current portion		33,339			35,156
Other long-term liabilities		64,319			69,716
Total liabilities		599,919			646,469
Commitments and contingencies (Notes 4 and 6)
Subsequent events (Notes 4, 7, 8 and 14)
Stockholders’ equity:
Preferred stock, $.01 par value; 5,000 shares authorized; none issued or outstanding		—			—
Series A Junior Participating Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding		—			—
Common stock, $.01 par value; 100,000 shares authorized; 52,437 shares issued and outstanding as of May 19, 2008; 52,504 shares issued and 52,476 shares outstanding as of January 31, 2008		524			525
Common stock held in treasury, at cost; none as of May 19, 2008 and 28 shares as of January 31, 2008		—			(359	)
Additional paid-in capital		254,062			251,524
Accumulated deficit		(92,971	)		(106,448	)
Total stockholders’ equity		161,615			145,242
Total liabilities and stockholders’ equity	$	761,534		$	791,711

See Accompanying Notes to Condensed Consolidated Financial Statements

3

CKE RESTAURANTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)

	Sixteen Weeks Ended
	May 19, 2008			May 21, 2007
Revenue:
Company-operated restaurants	$	358,238		$	380,524
Franchised and licensed restaurants and other		107,933			101,278
Total revenue		466,171			481,802
Operating costs and expenses:
Restaurant operating costs:
Food and packaging		105,074			111,435
Payroll and other employee benefits		103,683			110,479
Occupancy and other		78,035			81,874
Total restaurant operating costs		286,792			303,788
Franchised and licensed restaurants and other		83,067			79,492
Advertising		21,098			22,762
General and administrative		44,511			46,027
Facility action charges, net		1,073			(254	)
Total operating costs and expenses		436,541			451,815
Operating income		29,630			29,987
Interest expense		(4,568	)		(5,295	)
Other income, net		992			1,624
Income before income taxes and discontinued operations		26,054			26,316
Income tax expense		9,434			10,617
Income from continuing operations		16,620			15,699
Loss from discontinued operations (net of income tax benefit of $160 for the sixteen weeks ended May 21, 2007)		—			(348	)
Net income	$	16,620		$	15,351
Basic income per common share:
Continuing operations	$	0.32		$	0.24
Discontinued operations		—			—
Net income	$	0.32		$	0.24
Diluted income per common share:
Continuing operations	$	0.31		$	0.23
Discontinued operations		—			—
Net income	$	0.31		$	0.23
Dividends per common share	$	0.06		$	0.06
Weighted-average common shares outstanding:
Basic		51,582			64,823
Diluted		54,232			68,150

See Accompanying Notes to Condensed Consolidated Financial Statements

4

CKE RESTAURANTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

	Sixteen Weeks Ended
	May 19, 2008			May 21, 2007
Cash flows from operating activities:
Net income	$	16,620		$	15,351
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		18,982			19,884
Amortization of deferred loan fees		436			265
Share-based compensation expense		3,934			3,101
Change in fair value of interest rate swap agreements		(2,359	)		—
Recovery of losses on accounts and notes receivable		(44	)		(665	)
Loss on sale of property and equipment, capital leases and extinguishment of debt		206			618
Facility action charges, net		1,073			(463	)
Deferred income taxes		4,064			4,639
Other non-cash charges		11			24
Net changes in operating assets and liabilities:
Receivables, inventories, prepaid expenses and other current and non-current assets		11,566			(3,247	)
Estimated liability for closed restaurants and estimated liability for self-insurance		(3,473	)		(2,518	)
Accounts payable and other current and long-term liabilities		(2,238	)		2,146
Net cash provided by operating activities		48,778			39,135
Cash flows from investing activities:
Purchases of property and equipment		(20,093	)		(35,495	)
Proceeds from sale of property and equipment		12,085			12,118
Collections of non-trade notes receivable		2,658			67
Other investing activities		22			23
Net cash used in investing activities		(5,328	)		(23,287	)
Cash flows from financing activities:
Net change in bank overdraft		(18,144	)		479
Borrowings under revolving credit facility		57,500			94,000
Repayments of borrowings under revolving credit facility		(63,000	)		(117,000	)
Borrowings under credit facility term loan		—			100,179
Repayments of credit facility term loan		(14,465	)		—
Repayments of other long-term debt		(58	)		(52	)
Borrowing by consolidated variable interest entity		—			5
Repayments of capital lease obligations		(1,618	)		(1,539	)
Payment of deferred loan fees		(399	)		(1,022	)
Repurchase of common stock		(1,612	)		(83,467	)
Exercise of stock options		207			1,557
Excess tax benefits from exercise of stock options		162			1,457
Dividends paid on common stock		(3,148	)		(2,694	)
Net cash used in financing activities		(44,575	)		(8,097	)
Net (decrease) increase in cash and cash equivalents		(1,125	)		7,751
Cash and cash equivalents at beginning of period		19,993			18,680
Cash and cash equivalents at end of period	$	18,868		$	26,431

See Accompanying Notes to Condensed Consolidated Financial Statements

5

CKE RESTAURANTS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

Note 1 — Basis of Presentation and Description of Business

     CKE Restaurants, Inc. (“CKE” or the “Company”), through its wholly-owned subsidiaries, owns, operates, franchises and licenses the Carl’s Jr.^®, Hardee’s^®, Green Burrito^® and Red Burrito™ concepts. References to CKE Restaurants, Inc. throughout these Notes to Condensed Consolidated Financial Statements are made using the first person notations of “we,” “us” and “our.”

     Carl’s Jr. restaurants are primarily located in the Western United States. Hardee’s restaurants are located throughout the Southeastern and Midwestern United States. Green Burrito restaurants are primarily located in dual-branded Carl’s Jr. restaurants. The Red Burrito concept is located in dual-branded Hardee’s restaurants. As of May 19, 2008, our system-wide restaurant portfolio consisted of:

	Carl’s Jr.		Hardee’s		Other		Total
Company-operated		410		495		1		906
Franchised and licensed		752		1,428		15		2,195
Total		1,162		1,923		16		3,101

     Our accompanying unaudited Condensed Consolidated Financial Statements include the accounts of CKE, our wholly-owned subsidiaries, and certain variable interest entities for which we are the primary beneficiary and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the instructions to Form 10-Q, and Article 10 of Regulation S-X. These financial statements should be read in conjunction with the audited Consolidated Financial Statements presented in our Annual Report on Form 10-K for the fiscal year ended January 31, 2008. In our opinion, all adjustments considered necessary for a fair presentation of financial position and results of operations for this interim period have been included. The results of operations for such interim period are not necessarily indicative of results for the full year or for any future period.

     We operate on a retail accounting calendar. Our fiscal year has 13 four-week accounting periods and ends on the last Monday in January. The first quarter of our fiscal year has four periods, or 16 weeks. All other quarters have three periods, or 12 weeks. For clarity of presentation, we generally label all fiscal year ends as if the fiscal year ended January 31.

Note 2 — Accounting Pronouncements Not Yet Adopted and Adoption of New Accounting Pronouncements

     In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) 157, Fair Value Measurements. SFAS 157 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurement. SFAS 157 for financial assets and liabilities is effective for fiscal years beginning after November 15, 2007. We have adopted the standard for those assets and liabilities as of the beginning of fiscal 2009 and there was no impact on our consolidated financial position or results of operations (see Note 5). In February 2008, the FASB deferred the effective date of SFAS 157 for one year for certain non-financial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (i.e., at least annually). We are currently evaluating the impact of adopting SFAS 157 at the beginning of fiscal 2010 for non-financial assets and liabilities on our consolidated financial position and results of operations.

     In December 2007, the FASB issued SFAS 141 (revised 2007), Business Combinations (“SFAS 141R”), and SFAS 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51. SFAS 141R and SFAS 160 require most identifiable assets, liabilities, noncontrolling interests and goodwill acquired in a business combination to be recorded at “full fair value” and require noncontrolling interests (previously referred to as minority interests) to be reported as a component of equity, which changes the accounting for transactions with noncontrolling interest holders. Both of the pronouncements are effective for periods beginning on or after December 15, 2008, which for us is the first quarter of fiscal 2010, and earlier adoption is prohibited.

6

CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

SFAS 141R will be applied to business combinations occurring after the effective date. SFAS 160 will be applied prospectively to all noncontrolling interests, including any that arose before the effective date. We do not anticipate the adoption of SFAS 141R and SFAS 160 to have any effect on our consolidated financial position and results of operations.

     In March 2008, the FASB issued SFAS 161, Disclosures about Derivative Instruments and Hedging Activities, which amends SFAS 133, Accounting for Derivative Instruments and Hedging Activities, and expands disclosures to include information about the fair value of derivatives, related credit risks and a company’s strategies and objectives for using derivatives. SFAS 161 is effective for fiscal periods beginning on or after November 15, 2008, which for us is the first quarter of fiscal 2010.

Note 3 — Assets Held For Sale

     Surplus restaurant properties and company-operated restaurants that we expect to sell within one year are classified in our accompanying Condensed Consolidated Balance Sheets as assets held for sale. As of May 19, 2008, total assets held for sale were $1,238. This was comprised of three company-operated restaurants and other real property with a collective carrying value of $1,060 in our Carl’s Jr. operating segment and one surplus property in our Hardee’s operating segment with a carrying value of $178. As of January 31, 2008, total assets held for sale were $1,038 and were comprised of four surplus properties in our Hardee’s operating segment.

Note 4 — Indebtedness and Interest Expense

     As of May 19, 2008, we had borrowings outstanding under our senior credit facility (“Facility”) under the term loan portion of our Facility of $253,760, at a weighted-average interest rate of 4.38% per annum, and under the revolving portion of our Facility of $61,000, at a weighted-average interest rate of 4.23% per annum. We also had outstanding letters of credit under the revolving portion of our Facility of $35,894, with remaining availability of $103,106 under the revolving portion of our Facility.

     The principal amount of the term loan is scheduled to be repaid in quarterly installments of $675 through January 1, 2012; three quarterly payments of $64,175, beginning on April 1, 2012; and a final payment of $51,110 due on January 1, 2013. The Facility also requires annual principal payments on the term loan based on excess cash flows, as defined. During the sixteen weeks ended May 19, 2008, we made aggregate principal payments of $14,465 on the term loan, including a payment based on excess cash flows for fiscal 2008.

     We have fixed rate swap agreements with various counterparties to effectively fix future interest payments on $200,000 of our term loan debt at 6.2159%. These agreements will expire March 12, 2012. These derivative instruments were not designated as cash flow hedges under the terms of SFAS 133. Accordingly, the change in the fair value of the interest rate swap agreements is recognized in interest expense in our Condensed Consolidated Statements of Income. We recorded a $2,359 reduction of interest expense during the sixteen weeks ended May 19, 2008 to adjust the carrying value of the interest rate swap agreements to fair value. We also received a periodic settlement of $730 in cash. The fair value of the interest rate swap agreements, inclusive of unpaid periodic settlements, is included in other current liabilities and other long-term liabilities, in our accompanying Condensed Consolidated Balance Sheets, and was $9,751 and $11,380 as of May 19, 2008 and January 31, 2008, respectively. Subsequent to May 19, 2008, we paid a periodic settlement of $946. As a matter of policy, we do not enter into derivative instruments unless there is an underlying exposure.

     Our Facility permits us to make annual capital expenditures in the amount of $85,000, plus 80% of the amount of actual Adjusted EBITDA (as defined in our Facility) in excess of $150,000. In addition, we may reinvest proceeds from the sale of assets and carry forward certain unused capital expenditure amounts to the following year. Our Facility also contains financial performance covenants, which include a maximum leverage ratio.

     The Convertible Subordinated Notes due 2023 (“2023 Convertible Notes”) bear interest at 4.0% annually, payable in semiannual installments due April 1 and October 1 each year. The 2023 Convertible Notes have an adjusted conversion rate of 116.6063 and an adjusted conversion price of approximately $8.58. On October 1, 2008 and thereafter, we have the right to call all or a portion of the notes at 100% of the face value plus accrued interest.

7

CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

On October 1 of 2008, 2013 and 2018, the holders of the 2023 Convertible Notes have the right to require us to repurchase all or a portion of the notes at 100% of the face value plus accrued interest. Accordingly, the $15,167 of 2023 Convertible Notes has been included in current portion of bank indebtedness and other long-term debt in our accompanying Condensed Consolidated Balance Sheets as of May 19, 2008 and January 31, 2008, respectively.

     Interest expense consisted of the following:

	Sixteen Weeks Ended
	May 19, 2008			May 21, 2007
Facility	$	4,684		$	2,943
Interest rate swaps		(2,359	)		—
Capital lease obligations		1,362			1,561
Amortization of deferred loan fees		342			265
2023 Convertible Notes		183			187
Letter of credit fees and other		356			339
	$	4,568		$	5,295

Note 5 — Fair Value Measurement

     We adopted SFAS 157 for financial assets and liabilities as of the beginning of fiscal 2009. SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1 —	Quoted prices in active markets for identical assets or liabilities;
Level 2 —	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level 3 —	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

     The following table summarizes the financial liabilities measured at fair value on a recurring basis as of May 19, 2008:

			Quoted Prices in
			Active Markets for		Significant Other		Significant
			Identical Assets		Observable Inputs		Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Interest rate swap agreements	$	9,751	$	—	$	9,751	$	—

     The interest rate swap agreements are recorded at fair value based upon valuation models as reported by our counterparties. These valuation models are based upon relevant factors such as the contractual terms of our interest rate swap agreements and interest rate curves.

Note 6 — Commitments and Contingent Liabilities

     Under various past and present refranchising programs, we have sold restaurants to franchisees, some of which were on leased sites. We entered into sublease agreements with these franchisees but remained principally liable for the lease obligations. We account for the sublease payments received as franchising rental income in franchised and licensed restaurants and other revenue, and the payments on the leases as rental expense in franchised and licensed restaurants and other expense, in our accompanying Condensed Consolidated Statements of Income. As of May 19, 2008, the present value of the lease obligations under the remaining master leases’ primary terms is $111,991. Franchisees may, from time to time, experience financial hardship and may cease payment on their sublease obligations to us. The present value of the exposure to us from franchisees characterized as under financial hardship

8

CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

is $1,109, of which $137 is reserved for in our estimated liability for closed restaurants in our accompanying Condensed Consolidated Balance Sheet as of May 19, 2008.

     Pursuant to our Facility, a letter of credit sub-facility in the amount of $85,000 was established (see Note 4). Several standby letters of credit are outstanding under this sub-facility, which secure our potential workers’ compensation, general and auto liability obligations. We are required to provide letters of credit each year, or set aside a comparable amount of cash or investment securities in a trust account, based on our existing claims experience. As of May 19, 2008, we had outstanding letters of credit of $35,894, expiring at various dates through July 2009.

     As of May 19, 2008, we had unconditional purchase obligations in the amount of $54,842, which consist primarily of contracts for goods and services related to restaurant operations and contractual commitments for marketing and sponsorship arrangements.

     We have employment agreements with certain key executives (“Agreements”). These Agreements include provisions for lump sum payments to the executives that may be triggered by the termination of employment under certain conditions, as defined in each Agreement. If such provisions were triggered, each affected executive would receive an amount ranging from one to three times his base salary for the remainder of his employment term plus, in some instances, an amount ranging from a pro-rata portion of the current year bonus to three times the bonus in effect for the year in which the termination occurs. Additionally, all options awarded to the affected executives which have not vested as of the date of termination would vest immediately. For certain of the key executives, all unvested restricted stock awards as of the date of termination would vest immediately and restricted stock awards which have not yet been awarded would be awarded and would vest immediately. If all of these Agreements had been triggered as of May 19, 2008, we would have been required to make cash payments of approximately $16,275.

     We are, from time to time, the subject of complaints or litigation from customers alleging illness, injury or other food quality, health or operational concerns. Adverse publicity resulting from such allegations may materially adversely affect us and our restaurants, regardless of whether such allegations are valid or whether we are liable. We are also, at times, the subject of complaints or allegations from current or former employees, franchisees, vendors, landlords and others.

     As of May 19, 2008, we had recorded an accrued liability for contingencies related to litigation in the amount of $168, which relates to certain employment, real estate and other business disputes. Certain of the matters for which we maintain an accrued liability for litigation pose risk of loss significantly above the accrued amounts. In addition, as of May 19, 2008, we estimated the contingent liability of those losses related to other litigation claims that, in accordance with SFAS 5, Accounting for Contingencies, are not accrued, but that we believe are reasonably possible to result in an adverse outcome, to be in the range of $680 to $2,295.

Note 7 — Stockholders’ Equity

     During the sixteen weeks ended May 19, 2008, we declared cash dividends of $0.06 per share of common stock, for a total of $3,146. Dividends payable of $3,146 and $3,148 have been included in other current liabilities in our accompanying Condensed Consolidated Balance Sheets as of May 19, 2008 and January 31, 2008, respectively. The dividends declared during the sixteen weeks ended May 19, 2008 were subsequently paid on June 10, 2008.

Note 8 — Share-Based Compensation

     We have various share-based compensation plans that provide restricted stock awards and stock options for certain employees, non-employee directors and external service providers to acquire shares of our common stock. The total number of shares available under all of our stock incentive plans was 3,601,342 as of May 19, 2008. Subsequent to the sixteen weeks ended May 19, 2008, the number of shares available for grant under our 1999 Stock Incentive Plan was increased by 350,000 shares.

9

CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

     Total share-based compensation expense and associated tax benefits recognized under SFAS 123R were as follows:

	Sixteen Weeks Ended
	May 19, 2008		May 21, 2007
Share-based compensation expense related to performance-vested restricted stock awards	$	1,302	$	706
All other share-based compensation expense		2,635		2,432
Total share-based compensation expense	$	3,937	$	3,138
Associated tax benefits	$	1,170	$	867

Note 9 — Facility Action Charges, Net

     The components of facility action charges, net are as follows:

	Sixteen Weeks Ended
	May 19, 2008			May 21, 2007
Estimated liability for new restaurant closures	$	12		$	51
Adjustments to estimated liability for closed restaurants		(102	)		472
Impairment of assets to be disposed of		310			17
Impairment of assets to be held and used		—			2
Loss (gain) on sales of restaurants and surplus properties, net		707			(979	)
Amortization of discount related to estimated liability for closed restaurants		146			183
	$	1,073		$	(254	)

Note 10 — Income Taxes

     Income tax expense consisted of the following:

	Sixteen Weeks Ended
	May 19, 2008			May 21, 2007
Federal and state income taxes	$	8,954		$	10,301
Foreign income taxes		480			316
Income tax expense	$	9,434		$	10,617
Effective income tax rate		36.2	%		40.4	%

     Our effective income tax rates for the sixteen weeks ended May 19, 2008 and May 21, 2007 differ from the federal statutory rate primarily as a result of state income taxes and certain expenses that are nondeductible for income tax purposes. During the sixteen weeks ended May 19, 2008, our income tax expense was reduced by $1,273 as a result of the impact of recent tax regulations. We had $3,784 and $4,554 of tax benefits as of May 19, 2008 and January 31, 2008, respectively, that, if recognized, would affect our effective income tax rate. As of May 19, 2008 and January 31, 2008, we also had $14,824 of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes, income taxes payable and valuation allowance.

     As of May 19, 2008, we maintained a valuation allowance of $28,105 for state capital loss carryforwards, certain state net operating loss and income tax credit carryforwards and other temporary differences related to various states in which one or more of our entities file separate income tax returns. Realization of the tax benefit of such deferred income tax assets may remain uncertain for the foreseeable future, even though we expect to generate taxable income, since they are subject to various limitations and may only be used to offset income of certain entities or of a certain character.

10

CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

Note 11 — Income Per Share

     The table below presents the computation of basic and diluted earnings per share:

	Sixteen Weeks Ended
	May 19, 2008		May 21, 2007
	(In thousands except per share amounts)
Numerator:
Income from continuing operations	$	16,620	$	15,699
Loss from discontinued operations		—		(348	)
Net income for computation of basic earnings per share	$	16,620	$	15,351
Adjustment for interest and amortization costs for 2023 Convertible Notes, net of related tax effect		135		137
Income from continuing operations for computation of diluted earnings per share	$	16,755	$	15,836
Net income for computation of diluted earnings per share	$	16,755	$	15,488
Denominator:
Weighted-average shares for computation of basic earnings per share		51,582		64,823
Dilutive effect of stock options and restricted stock		881		1,580
Dilutive effect of 2023 Convertible Notes		1,769		1,747
Weighted-average shares for computation of diluted earnings per share		54,232		68,150
Basic earnings per share:
Basic income per share from continuing operations	$	0.32	$	0.24
Basic loss per share from discontinued operations		—		—
Basic net income per share	$	0.32	$	0.24
Diluted earnings per share:
Diluted income per share from continuing operations	$	0.31	$	0.23
Diluted loss per share from discontinued operations		—		—
Diluted net income per share	$	0.31	$	0.23

Note 12 — Segment Information

     We are principally engaged in developing, operating, franchising and licensing our Carl’s Jr. and Hardee’s quick-service restaurant concepts, each of which is considered an operating segment that is managed and evaluated separately. The accounting policies of the segments are the same as those described in our summary of significant accounting policies (see Note 1 of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2008).

	Carl’s Jr.		Hardee’s		Other			Total
Sixteen Weeks Ended May 19, 2008
Revenue	$	275,878	$	190,023	$	270		$	466,171
Operating income		24,051		5,468		111			29,630
Income (loss) before income taxes		23,746		3,860		(1,552	)		26,054

	Carl’s Jr.		Hardee’s		Other			Total
Sixteen Weeks Ended May 21, 2007
Revenue	$	258,145	$	222,435	$	1,222		$	481,802
Operating income (loss)		21,427		8,596		(36	)		29,987
Income (loss) before income taxes and discontinued operations		21,231		6,207		(1,122	)		26,316

11

CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

Note 13 — Discontinued Operations

     We sold our La Salsa Fresh Mexican Grill restaurants and the related franchise operations to LAS Acquisition, LLC (“Buyer”) on July 16, 2007. Under the agreement, Santa Barbara Restaurant Group, Inc., a wholly-owned subsidiary of the Company, sold its 100 percent equity interest in La Salsa, Inc. and La Salsa of Nevada, Inc. for adjusted consideration of $15,889. Pursuant to the agreement, we have retained contingent liabilities related to tax matters and certain litigation matters arising prior to the completion of the sale of La Salsa. During the sixteen weeks ended May 19, 2008, we received payment of $2,600 on the note payable that was included in accounts receivable, net in our accompanying Condensed Consolidated Balance Sheet as of January 31, 2008.

     The results from discontinued operations for the sixteen weeks ended May 21, 2007 were as follows:

Revenue	$	14,032
Operating loss		(502	)
Interest expense		(15	)
Other income, net		9
Income tax benefit		160
Loss from discontinued operations	$	(348	)

Note 14 — Purchase and Sale of Assets

     During fiscal 2008, we launched a refranchising program for our Hardee’s concept. During the sixteen weeks ended May 19, 2008, we sold 59 company-operated Hardee’s restaurants and related real property with a net book value of $8,680 to two franchisees. In connection with these transactions, we received aggregate consideration of $9,591, including $1,535 in initial franchise fees, which is included in franchised and licensed restaurants and other revenue, and we recognized a net loss of $1,162, which is included in facility action charges, net, in our accompanying Condensed Consolidated Statement of Income for the sixteen weeks ended May 19, 2008, in our Hardee’s segment. As part of these transactions, the franchisees acquired the real property and/or subleasehold interest in the real property related to the restaurant locations. Subsequent to May 19, 2008, we sold an additional six company-operated restaurants to one franchisee for total proceeds of $2,747.

Note 15 — Supplemental Cash Flow Information

	Sixteen Weeks Ended
	May 19, 2008		May 21, 2007
Cash paid for:
Interest, net of amounts capitalized	$	4,479	$	5,259
Income taxes, net of refunds received	$	329	$	525
Non-cash investing and financing activities:
Gain recognized on sale and leaseback transactions	$	106	$	107
Dividends declared, not paid	$	3,146	$	3,750

12

CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction and Safe Harbor Disclosure

     CKE Restaurants, Inc. and its subsidiaries (collectively referred to as the “Company”) is comprised of the operations of Carl’s Jr., Hardee’s, Green Burrito (which is primarily operated as a dual-branded concept with Carl’s Jr. quick-service restaurants) and Red Burrito (which is operated as a dual-branded concept with Hardee’s quick-service restaurants). The following Management’s Discussion and Analysis should be read in conjunction with the unaudited Condensed Consolidated Financial Statements contained herein, and our Annual Report on Form 10-K for the fiscal year ended January 31, 2008.

     Matters discussed in this Form 10-Q contain forward-looking statements relating to future plans and developments, financial goals and operating performance that are based on our current beliefs and assumptions. Such statements are subject to risks and uncertainties that are often difficult to predict, are beyond our control and which may cause results to differ materially from expectations. Factors that could cause our results to differ materially from those described include, but are not limited to, whether or not restaurants will be closed and the number of restaurant closures, consumers’ concerns or adverse publicity regarding our products, the effectiveness of operating initiatives and advertising and promotional efforts (particularly at the Hardee’s brand), changes in economic conditions or prevailing interest rates, changes in the price or availability of commodities, availability and cost of energy, workers’ compensation and general liability premiums and claims experience, changes in our suppliers’ ability to provide quality and timely products, delays in opening new restaurants or completing remodels, severe weather conditions, the operational and financial success of our franchisees, franchisees’ willingness to participate in our strategies, the availability of financing for us and our franchisees, unfavorable outcomes in litigation, changes in accounting policies and practices, effectiveness of internal control over financial reporting, new legislation or government regulation (including environmental laws), the availability of suitable locations and terms for the sites designated for development, and other factors as discussed in our filings with the SEC.

     Forward-looking statements speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law or the rules of the New York Stock Exchange.

New Accounting Pronouncements Not Yet Adopted and Adoption of New Accounting Pronouncements

     See Note 2 of Notes to Condensed Consolidated Financial Statements for a description of the new accounting pronouncements that we have and have not yet adopted.

Critical Accounting Policies

     Our reported results are impacted by the application of certain accounting policies that require us to make subjective or complex judgments. These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact our consolidated financial position and results of operations. See our Annual Report on Form 10-K for the year ended January 31, 2008 for a description of our critical accounting policies. Specific risks associated with these critical accounting policies are described in the following paragraphs.

Impairment of Property and Equipment and Other Amortizable Long-Lived Assets Held and Used, Held for Sale or To Be Disposed of Other Than By Sale

     In connection with analyzing long-lived assets to determine if they have been impaired, we estimate future cash flows for each of our restaurants based upon experience gained, current intentions about refranchising restaurants and closures, expected sales trends, internal plans and other relevant information. These estimates utilize key assumptions, such as same-store sales and the rates at which restaurant operating costs will increase in the future. If our same-store sales do not perform at or above our forecasted level, or if restaurant operating cost increases exceed

13

CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)

our forecast and we are unable to recover such costs through price increases, the carrying value of certain of our restaurants may prove to be unrecoverable and we may incur additional impairment charges in the future.

Impairment of Goodwill

     During the first quarter of fiscal 2008, we evaluated the Carl’s Jr. brand, the only one of our brands for which goodwill is recorded. As a result of our annual impairment test, we concluded that the fair value of the net assets of Carl’s Jr. exceeded the carrying value, and thus no impairment charge was required. As of May 19, 2008, we had $22,649 in goodwill recorded in our accompanying Condensed Consolidated Balance Sheet, all of which relates to Carl’s Jr.

Estimated Liability for Closed Restaurants

     In determining the amount of the estimated liability for closed restaurants, we estimate the cost to maintain leased vacant properties until the lease can be abated. If the costs to maintain properties increase, or it takes longer than anticipated to sublease or terminate leases, we may need to record additional estimated liabilities. If the leases on the vacant restaurants are not terminated or subleased on the terms that we used to estimate the liabilities, we may be required to record losses in future periods. Conversely, if the leases on the vacant restaurants are terminated or subleased on more favorable terms than we used to estimate the liabilities, we reverse previously established estimated liabilities, resulting in an increase in operating income.

Estimated Liability for Self-Insurance

     If we experience a higher than expected number of claims or the costs of claims rise more than the estimates used by management, developed with the assistance of our actuary, our reserves would require adjustment and we would be required to adjust the expected losses upward and increase our future self-insurance expense.

     Our actuary provides us with estimated unpaid losses for each loss category, upon which our analysis is based. As of May 19, 2008, our estimated liability for self-insured workers’ compensation, general and auto liability losses was $35,110.

Franchised and Licensed Operations

     We have sublease agreements with some of our franchisees on properties for which we remain principally liable for the lease obligations. If sales trends or economic conditions worsen for our franchisees, their financial health may worsen, our collection rates may decline and we may be required to assume the responsibility for additional lease payments on franchised restaurants. The likelihood of needing to increase the estimated liability for future lease obligations is primarily related to the success of our Hardee’s concept, although we can provide no assurance that our Carl’s Jr. franchisees will not experience a similar level of financial difficulties as our Hardee’s franchisees.

Income Taxes

     When necessary, we record a valuation allowance to reduce our net deferred tax assets to the amount that is more likely than not to be realized. In considering the need for a valuation allowance against some portion or all of our deferred tax assets, we must make certain estimates and assumptions regarding future taxable income, the feasibility of tax planning strategies and other factors. Changes in facts and circumstances or in the estimates and assumptions that are involved in establishing and maintaining a valuation allowance against deferred tax assets could result in adjustments to the valuation allowance in future quarterly or annual periods.

     We use an estimate of our annual income tax rate to recognize a provision for income taxes in financial statements for interim periods. However, changes in facts and circumstances could result in adjustments to our effective tax rate in future quarterly or annual periods.

14

CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)

Significant Known Events, Trends, or Uncertainties Expected to Impact Fiscal 2009 Comparisons with Fiscal 2008

     The factors discussed below impact comparability of operating performance for the sixteen weeks ended May 19, 2008 and May 21, 2007, or could impact comparisons for the remainder of fiscal 2009.

Fiscal Year and Seasonality

     We operate on a retail accounting calendar. Our fiscal year has 13 four-week accounting periods and ends the last Monday in January. The first quarter of our fiscal year has four periods, or 16 weeks. All other quarters have three periods, or 12 weeks.

     Our restaurant sales, and therefore our profitability, are subject to seasonal fluctuations and are traditionally higher during the spring and summer months because of factors such as increased travel upon school vacations and improved weather conditions, which affect the public’s dining habits.

Operating Review

     The following table sets forth the percentage relationship to total revenue, unless otherwise indicated, of certain items included in our accompanying Condensed Consolidated Statements of Income:

	Sixteen Weeks Ended
	May 19, 2008			May 21, 2007
Revenue:
Company-operated restaurants		76.8	%		79.0	%
Franchised and licensed restaurants and other		23.2			21.0
Total revenue		100.0			100.0
Operating costs and expenses:
Restaurant operating costs (1):
Food and packaging		29.3			29.3
Payroll and other employee benefits		28.9			29.0
Occupancy and other		21.8			21.5
Total restaurant operating costs		80.1			79.8
Franchised and licensed restaurants and other (2)		77.0			78.5
Advertising (1)		5.9			6.0
General and administrative		9.5			9.6
Facility action charges, net		0.2			(0.1	)
Operating income		6.4			6.2
Interest expense		(1.0	)		(1.1	)
Other income, net		0.2			0.3
Income before income taxes and discontinued operations		5.6			5.5
Income tax expense		2.0			2.2
Income from continuing operations		3.6	%		3.3	%

(1)	As a percent of company-operated restaurants revenue.
(2)	As a percent of franchised and licensed restaurants and other revenue.

15

CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)

     The following table is presented to facilitate Management’s Discussion and Analysis of Financial Condition and Results of Operations.

	Sixteen Weeks Ended
	May 19, 2008		May 21, 2007
Company-operated restaurants revenue	$	358,238	$	380,524
Restaurant operating costs:
Food and packaging		105,074		111,435
Payroll and other employee benefits		103,683		110,479
Occupancy and other		78,035		81,874
Total restaurant operating costs		286,792		303,788
Franchised and licensed restaurants and other revenue:
Royalties		25,003		22,911
Distribution centers		70,690		67,474
Rent		9,620		9,345
Retail sales of variable interest entity		—		956
Franchise fees		2,620		592
Total franchised and licensed restaurants and other revenue		107,933		101,278
Franchised and licensed restaurants and other expenses:
Administrative expense (including provision for bad debts)		4,581		3,600
Distribution centers		70,545		67,653
Rent and other occupancy		7,941		7,293
Operating costs of variable interest entity		—		946
Total franchised and licensed restaurants and other expenses		83,067		79,492
Advertising		21,098		22,762
General and administrative		44,511		46,027
Facility action charges, net		1,073		(254	)
Operating income	$	29,630	$	29,987

     The following table shows the change in our restaurant portfolio for the sixteen weeks ended May 19, 2008:

	Company-operated			Franchised and licensed			Total
Open at January 31, 2008		967			2,116			3,083
New		4			28			32
Closed		(6	)		(8	)		(14	)
Divested		(59	)		—			(59	)
Acquired		—			59			59
Open at May 19, 2008		906			2,195			3,101

16

CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)

Carl’s Jr.

	Sixteen Weeks Ended
	May 19, 2008			May 21, 2007
Company-operated restaurants revenue	$	195,228		$	181,229
Restaurant operating costs:
Food and packaging		56,505			52,923
Payroll and other employee benefits		51,919			48,535
Occupancy and other		42,867			38,898
Total restaurant operating costs		151,291			140,356
Franchised and licensed restaurants and other revenue:
Royalties		10,326			9,753
Distribution centers		63,289			59,770
Rent		6,355			7,010
Franchise fees		680			383
Total franchised and licensed restaurants and other revenue		80,650			76,916
Franchised and licensed restaurants and other expenses:
Administrative expense (including provision for bad debts)		2,160			1,858
Distribution centers		62,897			59,927
Rent and other occupancy		5,597			5,900
Total franchised and licensed restaurants and other expenses		70,654			67,685
Advertising		11,434			10,601
General and administrative		18,817			17,701
Facility action charges, net		(369	)		375
Operating income	$	24,051		$	21,427
Company-operated average unit volume (trailing-13 periods)	$	1,514		$	1,461
Franchise-operated average unit volume (trailing-13 periods)	$	1,194		$	1,204
Company-operated same-store sales increase		3.9	%		—
Franchise-operated same-store sales (decrease) increase		(1.2	)%		0.1	%
Company-operated same-store transaction increase (decrease)		1.9	%		(5.3	)%
Average check (actual $)	$	6.92		$	6.77
Restaurant operating costs as a % of company-operated restaurants revenue:
Food and packaging		28.9	%		29.2	%
Payroll and other employee benefits		26.6	%		26.8	%
Occupancy and other		22.0	%		21.5	%
Total restaurant operating costs		77.5	%		77.5	%
Advertising as a percentage of company-operated restaurants revenue		5.9	%		5.9	%

     The following table shows the change in our restaurant portfolio for the sixteen weeks ended May 19, 2008:

	Company-operated		Franchised and licensed		Total
Open at January 31, 2008		406		735		1,141
New		4		17		21
Open at May 19, 2008		410		752		1,162

Company-Operated Restaurants

     Revenue from company-operated Carl’s Jr. restaurants increased $13,999, or 7.7%, to $195,228 during the sixteen weeks ended May 19, 2008, as compared to the sixteen weeks ended May 21, 2007. This increase was primarily due to an increase in the number of company-operated restaurants, a $53 increase in average unit volume, which reached $1,514, and an increase in same-store sales of 3.9%. We believe these volume increases are due to increased sales resulting from recent restaurant remodeling and our continued focus on offering premium products that compete based on quality, innovation and taste.

17

CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)

     The changes in the restaurant operating costs as a percentage of company-operated restaurants revenue are explained as follows:

	Sixteen
	Weeks
Restaurant operating costs as a percentage of company-operated restaurants revenue for the period ended May 21, 2007		77.5	%
Increase in depreciation and amortization expense		0.5
Decrease in workers’ compensation expense		(0.4	)
Increase in labor costs, excluding workers’ compensation		0.3
Decrease in food and packaging costs		(0.3	)
Decrease in repairs and maintenance		(0.3	)
Increase in utilities expense		0.2
Increase in banking expense		0.2
Other, net		(0.2	)
Restaurant operating costs as a percentage of company-operated restaurants revenue for the period ended May 19, 2008		77.5	%

     Depreciation and amortization expense increased as a percent of company-operated restaurants revenue during the sixteen weeks ended May 19, 2008, from the comparable prior year period, mainly due to increased restaurant remodel activity.

     Workers’ compensation expense decreased as a percent of company-operated restaurants revenue during the sixteen weeks ended May 19, 2008, from the comparable prior year period, due primarily to a favorable claims reserves adjustment as a result of actuarial analyses of outstanding claims reserves.

     Labor costs, excluding workers’ compensation expense, increased as a percent of company-operated restaurants revenue during the sixteen weeks ended May 19, 2008, as compared to the prior year period, due primarily to an increase in restaurant manager bonuses due to the performance of the restaurants against specific performance criteria.

     Food and packaging costs decreased as a percent of company-operated restaurants revenue during the sixteen weeks ended May 19, 2008, as compared to the prior year period, due primarily to an increase in soft drink allowances, and decreases in commodity costs for pork products, which were partially offset by higher commodity costs for potato, dairy and oil products. In the first quarter of fiscal 2008, we experienced increased distribution costs related to the relocation of our main distribution center and simultaneous installation of a new overall distribution management system, which did not recur in the current year comparable period. In addition, during the sixteen weeks ended May 19, 2008, we experienced higher fuel costs related to distribution than in the prior year comparable period.

     Repairs and maintenance expense decreased as a percent of company-operated restaurants revenue during the sixteen weeks ended May 19, 2008, as compared to the prior year period. In the sixteen weeks ended May 21, 2007, repairs and maintenance costs were higher due to a support contract for our point-of-sale system, which is now supported by company employees instead of an external service provider.

Franchised and Licensed Restaurants

     Total franchised and licensed restaurants revenue increased $3,734, or 4.9%, to $80,650 during the sixteen weeks ended May 19, 2008, as compared to the sixteen weeks ended May 21, 2007. Franchise royalties grew $573, or 5.9%, during the sixteen weeks ended May 19, 2008, as compared to the sixteen weeks ended May 21, 2007, due to the net increase of 49 domestic and international franchised and licensed restaurants during the trailing-13 periods ended May 19, 2008. Rental revenue decreased by $655, or 9.3%, due to lease terminations and a same-store sales decrease on franchise restaurants with rent expense calculated as a percent of revenue. Distribution center sales of food, paper and supplies to franchisees increased by $3,519, or 5.9%, primarily due to the increase in the franchise store base over the comparable prior year period.

18

CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)

     Franchised and licensed operating and other expenses increased $2,969, or 4.4%, to $70,654 during the sixteen weeks ended May 19, 2008, as compared to the prior year period. This increase is mainly due to an increase in sales to franchisees due to an increase in the cost of food, paper and supplies and an increase in distribution costs related to higher fuel and labor costs.

     As of May 19, 2008, approximately 84.2% of Carl’s Jr. franchised and licensed restaurants purchase food, paper and other supplies from us.

Hardee’s

	Sixteen Weeks Ended
	May 19, 2008			May 21, 2007
Company-operated restaurants revenue	$	162,923		$	199,192
Restaurant operating costs:
Food and packaging		48,530			58,479
Payroll and other employee benefits		51,724			61,902
Occupancy and other		35,139			42,943
Total restaurant operating costs		135,393			163,324
Franchised and licensed restaurants and other revenue:
Royalties		14,495			12,992
Distribution centers		7,400			7,707
Rent		3,265			2,335
Franchise fees		1,940			209
Total franchised and licensed restaurants and other revenue		27,100			23,243
Franchised and licensed restaurants and other expenses:
Administrative expense (including provision for bad debts)		2,421			1,742
Distribution centers		7,648			7,726
Rent and other occupancy		2,344			1,393
Total franchised and licensed restaurants and other expenses		12,413			10,861
Advertising		9,664			12,159
General and administrative		25,643			28,258
Facility action charges, net		1,442			(763	)
Operating income	$	5,468		$	8,596
Company-operated average unit volume (trailing-13 periods)	$	959		$	923
Franchise-operated average unit volume (trailing-13 periods)	$	957		$	961
Company-operated same-store sales (decrease) increase		(0.6	)%		1.8	%
Franchise-operated same-store sales (decrease) increase		(0.1	)%		1.1	%
Company-operated same-store transaction (decrease) increase		(3.4	)%		1.2	%
Average check (actual $)	$	5.07		$	4.93
Restaurant operating costs as a % of company-operated restaurants revenue:
Food and packaging		29.8	%		29.4	%
Payroll and other employee benefits		31.7	%		31.0	%
Occupancy and other		21.6	%		21.6	%
Total restaurant operating costs		83.1	%		82.0	%
Advertising as a percentage of company-operated restaurants revenue		5.9	%		6.1	%

     The following table shows the change in our restaurant portfolio for the sixteen weeks ended May 19, 2008:

	Company-operated			Franchised and licensed			Total
Open at January 31, 2008		560			1,366			1,926
New		—			11			11
Closed		(6	)		(8	)		(14	)
Divested		(59	)		—			(59	)
Acquired		—			59			59
Open at May 19, 2008		495			1,428			1,923

19

CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)

Company-Operated Restaurants

     Revenue from company-operated Hardee’s restaurants decreased $36,269, or 18.2%, to $162,923 during the sixteen weeks ended May 19, 2008, as compared to the comparable prior year period. The decrease is mostly due to the divestiture of 167 company-operated restaurants to franchisees and the closure of 12 company-operated restaurants since the end of the first quarter of fiscal 2008 and a decrease in same-store sales. These decreases were partially offset by revenues from five new company-operated restaurants that opened during the same period and the five restaurants that we acquired from a franchisee.

     The changes in the restaurant operating costs as a percentage of company-operated restaurants revenue are explained as follows:

	Sixteen
	Weeks
Restaurant operating costs as a percentage of company-operated restaurants revenue for the period ended May 21, 2007		82.0	%
Increase in labor costs, excluding workers’ compensation		0.7
Decrease in repairs and maintenance		(0.5	)
Increase in food and packaging costs		0.4
Increase in depreciation and amortization expense		0.4
Other, net		0.1
Restaurant operating costs as a percentage of company-operated restaurants revenue for the period ended May 19, 2008		83.1	%

     Labor costs, excluding workers’ compensation expense, increased as a percent of company-operated restaurants revenue during the sixteen weeks ended May 19, 2008, as compared to the prior year period, due to primarily to a decrease in same-store sales, an increase in minimum wage rates and increased restaurant manager bonuses due to the performance of the restaurants against specific performance criteria.

     Repairs and maintenance expense decreased as a percent of company-operated restaurants revenue during the sixteen weeks ended May 19, 2008, as compared to the prior year period. During the sixteen weeks ended May 21, 2007, repairs and maintenance costs were unusually high due to the restaurants acquired in connection with the termination of a franchise agreement.

     Food and packaging costs increased as a percent of company-operated restaurants revenue during the sixteen weeks ended May 19, 2008, as compared to the prior year period, due primarily to higher commodity costs for beef, potato, wheat, dairy and oil products. The increased cost of dairy and wheat products impacted Hardee’s disproportionately due to the brand’s high concentration of sales in the breakfast daypart. A significant number of our menu offerings during the breakfast daypart include biscuits. These increases were partially offset by increased soft drink allowances and decreases in commodity costs for pork products.

     Depreciation and amortization expense increased as a percent of company-operated restaurants revenue during the sixteen weeks ended May 19, 2008, from the comparable prior year period, mainly due to increased restaurant remodel activity, asset additions from new restaurant openings and the impact of refranchising company-operated restaurants that had a higher proportion of fully depreciated assets.

Franchised and Licensed Restaurants

     Total franchised and licensed restaurants revenue increased $3,857, or 16.6%, to $27,100 during the sixteen weeks ended May 19, 2008, as compared to the prior year period. This increase is mainly due to the increase in royalty revenues of $1,503, or 11.6%, which is primarily due to the increase in the number of franchised restaurants, resulting from our refranchising program, which was partially offset by a decrease of $206 in collections of previously unrecognized royalties from financially troubled franchisees, as compared with the prior year period. In addition, there was a $1,731 increase in franchise fees primarily resulting from 59 refranchised restaurants and 11 new franchised and licensed restaurants that opened during the sixteen weeks ended May 19, 2008. We also experienced a $930 increase in rental income, primarily due to rent related to restaurants that were divested in our

20

CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)

refranchising efforts and partially due to an increase of $201 in collections of previously unrecognized rent from financially troubled franchisees. These increases were partially offset by a slight decrease in distribution center revenues of $307.

     Franchised and licensed operating and other expenses increased $1,552, or 14.3%, to $12,413, during the sixteen weeks ended May 19, 2008, as compared to the prior year period. This increase in costs is mainly due to a $951 increase in rent expense related to an increase in the number of franchised restaurants that sublease property from us as a result of our refranchising program, and a $679 increase in administrative expenses, which is due to a $211 increase in salaries and benefits expense due to new positions and increases in various other expenses.

Consolidated Expenses

General and Administrative Expense

     General and administrative expenses decreased $1,516, or 3.3%, to $44,511, and decreased 0.1% to 9.5% of total revenue, for the sixteen weeks ended May 19, 2008, as compared to the sixteen weeks ended May 21, 2007. This was mainly due to an $887 decrease in training costs, primarily for operations, a $554 decrease in aviation costs, due to the prior year loss on lease termination, a $461 decrease in software depreciation and a $466 decrease in corporate facilities expenses. These decreases were partially offset by an increase of $799 in share-based compensation expense, as a result of the issuance of additional stock options and restricted stock awards in fiscal 2007 and fiscal 2008 that continue to vest in fiscal 2009. We currently expect to record approximately $2,800 of share-based compensation expense in the second quarter of fiscal 2009, which would represent an increase of approximately $1,000 over the comparable prior year period. The actual charge will be dependent upon various factors, including our actual performance against the specified performance goals for fiscal 2009.

Interest Expense

     During the sixteen weeks ended May 19, 2008, interest expense decreased $727, or 13.7%, to $4,568, as compared to the sixteen weeks ended May 21, 2007. This decrease is primarily the result of a $2,359 reduction of interest expense during the current period to adjust the carrying value of the interest rate swap agreements to their fair values for which there was no comparable adjustment in the prior year period. This decrease was partially offset by a $1,741 increase in the interest on our Facility due to increased average outstanding borrowings, which were primarily used for the prior year repurchase of our common stock and our capital expenditures for new restaurants and remodels. See Note 4 of Notes to Condensed Consolidated Financial Statements for additional detail of the components of interest expense.

Income Tax Expense

     Our effective income tax rate during the sixteen weeks ended May 19, 2008, was reduced due to the impact of recent tax regulations. We expect our effective income tax rate for the remainder of fiscal 2009 to be approximately 41%. See Note 10 of Notes to Condensed Consolidated Financial Statements for additional detail of the components of income tax expense. See “Liquidity and Capital Resources” for a discussion of the expected impact of income taxes on our liquidity.

Presentation of Non-GAAP Measurements

Adjusted EBITDA

     Adjusted EBITDA is not a recognized term under GAAP and does not purport to be an alternative to income from operations, an indicator of cash flow from operations or a measure of liquidity. As shown in the table below and defined in our Facility, Adjusted EBITDA is calculated as earnings before cumulative effect of accounting changes, interest expense, income taxes, depreciation and amortization, facility action charges, share-based compensation expense, impairment of goodwill and impairment of assets held for sale. Because not all companies

21

CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)

calculate Adjusted EBITDA identically, this presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as interest expense, income taxes, debt service payments and cash costs arising from facility actions. Our maximum annual capital expenditures are limited by our Facility, based on a sliding scale driven by our Adjusted EBITDA.

	Sixteen Weeks Ended					Trailing-13 Periods Ended
	May 19, 2008		May 21, 2007			May 19, 2008
Net income	$	16,620	$	15,351		$	32,345
Interest expense		4,568		5,310			32,313
Income tax expense		9,434		10,457			25,589
Depreciation and amortization		18,982		19,884			63,200
Facility action charges, net		1,073		(463	)		254
Share-based compensation expense		3,937		3,138			12,177
Adjusted EBITDA	$	54,614	$	53,677		$	165,878

Liquidity and Capital Resources

     We currently finance our business through cash flows from operations and borrowings under our Facility. We believe our most significant cash use during the next 12 months will be for capital expenditures. Based on our current capital spending projections, we expect capital expenditures for fiscal 2009 to be between $120,000 and $130,000. We anticipate that existing cash balances, borrowing capacity under our Facility, and cash provided by operations will be sufficient to service existing debt and to meet our operating and capital requirements for at least the next 12 months.

     As a result of our income tax credit carryforwards and expected reversals of temporary differences, we expect that our fiscal 2009 obligation for federal, state and foreign income taxes will be approximately 22% of our income before income taxes in fiscal 2009. This rate results primarily from federal income taxes reduced by available alternative minimum tax and general business tax credits, as well as state and foreign income taxes. Our actual cash requirements for income taxes could vary significantly from our expectations for a number of reasons, including, but not limited to, unanticipated fluctuations in our deferred income tax assets and liabilities, unexpected gains from significant transactions, unexpected outcomes of income tax audits, and changes in tax law.

     During fiscal 2008, we launched a refranchising program for our Hardee’s concept. During the sixteen weeks ended May 19, 2008, we sold 59 company-operated Hardee’s restaurants and related real property with net book values of $8,680 to two franchisees. In connection with these transactions, we received aggregate consideration of $9,591, including $1,535 in initial franchise fees, which is included in franchised and licensed restaurants and other revenue, and we recognized a net loss of $1,162, which is included in facility action charges, net, in our accompanying Condensed Consolidated Statement of Income for the sixteen weeks ended May 19, 2008, in our Hardee’s segment. As part of these transactions, the franchisees acquired the real property and/or subleasehold interest in the real property related to the restaurant locations. Subsequent to May 19, 2008, we sold an additional six company-operated restaurants to one franchisee for total proceeds of $2,747. We are currently in negotiations with other franchisees to sell an additional 33 company-operated restaurants for $6,350.

     Our Facility provides for a $470,000 senior secured credit facility consisting of a $200,000 revolving credit facility and a $270,000 term loan. The revolving credit facility matures on March 27, 2012, and includes an $85,000 letter of credit sub-facility. During the sixteen weeks ended May 19, 2008, we made aggregate principal payments of $14,465 on the term loan. As of May 19, 2008, we had (i) borrowings outstanding under the term loan portion of our Facility of $253,760, (ii) borrowings outstanding under the revolving portion of our Facility of $61,000, (iii) outstanding letters of credit under the revolving portion of our Facility of $35,894, and (iv) availability under the revolving portion of our Facility of $103,106.

     Our Facility permits us to make additional common stock repurchases and/or pay cash dividends of $64,342 as of May 19, 2008. In addition, the amount that we may spend to repurchase our common stock and/or pay dividends is increased each year by a portion of excess cash flow (as defined in our Facility) during the term of our Facility. Our Facility also permits us to make annual capital expenditures in the amount of $85,000, plus 80% of the amount of actual Adjusted EBITDA (as defined in our Facility) in excess of $150,000. In addition, we may reinvest proceeds from the sale of assets and carry forward certain unused capital expenditure amounts to the following year. As of May 19, 2008, we expect to be permitted to make total capital expenditures of $160,343 in fiscal 2009.

22

CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)

     The terms of our Facility include financial performance covenants, which include a maximum leverage ratio, and certain restrictive covenants. Among other things, these covenants restrict our ability to incur debt, incur liens on our assets, make any significant change in our corporate structure or the nature of our business, prepay certain debt, engage in a change of control transaction without the member banks’ consents and make investments or acquisitions. Our Facility is collateralized by a lien on all of our personal property assets and liens on certain restaurant properties. We were in compliance with these covenants and all other requirements of our Facility as of May 19, 2008.

     We have fixed rate swap agreements with various counterparties to effectively fix future interest payments on $200,000 of our term loan debt at 6.2159%. These derivative instruments were not designated as cash flow hedges under the terms of SFAS 133. Accordingly, the change in the fair value of the interest rate swap agreements is recognized in interest expense in our Condensed Consolidated Statements of Income. We recorded a $2,359 reduction of interest expense during the sixteen weeks ended May 19, 2008 to adjust the carrying value of the interest rate swap agreements to fair value. We also received a periodic settlement of $730 in cash. Subsequent to May 19, 2008, we paid a periodic settlement of $946. As a matter of policy, we do not enter into derivative instruments unless there is an underlying exposure. These interest rate swap agreements are highly sensitive to interest rate fluctuations which could result in significant variability in their future value.

     The 2023 Convertible Notes bear interest at 4.0% annually, payable in semiannual installments due April 1 and October 1 each year. The 2023 Convertible Notes have an adjusted conversion rate of 116.6063 and an adjusted conversion price of approximately $8.58. On October 1, 2008 and thereafter, we have the right to call all or a portion of the notes at 100% of the face value plus accrued interest. On October 1 of 2008, 2013 and 2018, the holders of the 2023 Convertible Notes have the right to require us to repurchase all or a portion of the notes at 100% of the face value plus accrued interest. Accordingly, the $15,167 of 2023 Convertible Notes have been included in current portion of bank indebtedness and other long-term debt in our accompanying Condensed Consolidated Balance Sheet as of May 19, 2008.

     The terms of our Facility and the 2023 Convertible Notes are not dependent on any change in our credit rating. We believe the key Company-specific factors affecting our ability to maintain our existing debt financing relationships and to access such capital in the future are our present and expected levels of profitability and cash flows from operations, asset collateral bases and the level of our equity capital relative to our debt obligations. In addition, as noted above, our existing debt agreements include significant restrictions on future financings including, among others, limits on the amount of indebtedness we may incur or which may be secured by any of our assets.

     During the sixteen weeks ended May 19, 2008, we declared cash dividends of $0.06 per share of common stock, for a total of $3,146. Dividends payable of $3,146 and $3,148 have been included in other current liabilities in our accompanying Condensed Consolidated Balance Sheets as of May 19, 2008 and January 31, 2008, respectively. The dividends declared during the sixteen weeks ended May 19, 2008 were subsequently paid on June 10, 2008.

     During the sixteen weeks ended May 19, 2008, cash provided by operating activities was $48,778, an increase of $9,643 or 24.6% from the prior year comparable period. This increase is primarily attributable to changes in operating assets and liabilities, including accounts receivable, accounts payable and other liability accounts. Working capital account balances can vary significantly from quarter to quarter, depending upon the timing of large customer receipts and payments to vendors, but they are not anticipated to be a significant source or use of cash over the long term. In addition, we had increases in net income of $1,269, facility action charges, net, of $1,536 and share-based compensation expense of $833, which were partially offset by a $2,359 change in the fair value of our interest rate swap agreements and lower depreciation and amortization.

     Cash used in investing activities during the sixteen weeks ended May 19, 2008 totaled $5,328, which principally consisted of purchases of property and equipment, partially offset by proceeds from the sale of property and equipment, and collections on non-trade notes receivable.

23

CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)

     Capital expenditures were as follows:

	Sixteen Weeks Ended
	May 19, 2008		May 21, 2007
Non-discretionary:
Remodels
Carl’s Jr.	$	3,042	$	6,369
Hardee’s		1,961		2,066
Capital Maintenance
Carl’s Jr.		3,626		2,862
Hardee’s		3,274		4,861
Corporate/other		1,474		2,421
Total non-discretionary		13,377		18,579
Discretionary:
New restaurants/rebuilds
Carl’s Jr.		2,256		4,722
Hardee’s		1,505		4,971
Dual-branding
Carl’s Jr.		88		275
Hardee’s		1,118		983
Real estate/franchise acquisitions		1,654		2,052
Corporate/other		95		2,098
Capital expenditures – discontinued operations		—		1,815
Total discretionary		6,716		16,916
Total	$	20,093	$	35,495

     Capital expenditures for the sixteen weeks ended May 19, 2008, decreased $15,402, or 43.4%, from the comparable prior year period mainly due to a $9,364 decrease in restaurant remodel activity and new restaurant and rebuild construction, a $2,950 decrease in corporate and other asset additions and a $1,815 decrease in capital expenditures related to discontinued operations. Pursuant to our agreement to sell La Salsa, during fiscal 2008, Buyer reimbursed us for substantially all of the capital expenditures – discontinued operations.

     Cash used in financing activities during the sixteen weeks ended May 19, 2008 was $44,575, which principally consisted of net repayments of $5,500 under the revolving portion of our Facility, payments of $14,465 under the term loan portion of our Facility, a change in cash overdraft of $18,144, dividends of $3,148, repayments of $1,618 of capital lease obligations and $1,612 of common stock repurchases.

24

Item 3. Quantitative and Qualitative Disclosures About Market Risk
(Dollars in thousands)

Interest Rate Risk

     Our principal exposure to financial market risks relates to the impact that interest rate changes could have on our Facility. Our Facility, which is comprised of a revolving credit facility and a term loan, bears interest at an annual rate equal to the prime rate or LIBOR plus an applicable margin. As of May 19, 2008, we had $314,760 of borrowings and $35,894 of letters of credit outstanding under our Facility. During fiscal 2008, we entered into fixed rate swap agreements with a combined notional amount of $200,000. These agreements will expire on March 12, 2012. The effect of the agreements is to limit the interest rate exposure on a portion of our term loan debt under our Facility to a fixed rate of 6.2159%. The agreements were not designated as cash flow hedges under the terms of SFAS 133. Accordingly, the change in the fair value of the interest rate swap agreements is recognized in interest expense in our Condensed Consolidated Statements of Income. These interest rate swap agreements are highly sensitive to interest rate fluctuations which could result in significant variability in their future fair values.

     A hypothetical increase of 100 basis points in short-term interest rates would result in a reduction in our annual pre-tax earnings of $1,148. The estimated reduction is based upon the outstanding balance of the borrowings under our Facility that are not covered by our interest rate swaps and the weighted-average interest rate for the fiscal year and assumes no change in the volume, index or composition of debt as in effect on May 19, 2008. As of May 19, 2008, a hypothetical increase of 100 basis points in short-term interest rates would also cause the fair value of our 2023 Convertible Notes to decrease approximately $55, and a hypothetical decrease of 100 basis points in short-term interest rates would cause the fair value of our 2023 Convertible Notes to increase approximately $56. The changes in fair value were determined by discounting the projected cash flows assuming redemption on October 1, 2008.

     Substantially all of our business is transacted in U.S. dollars. Accordingly, foreign exchange rate fluctuations have not had a significant impact on us and are not expected to in the foreseeable future.

Commodity Price Risk

     We purchase certain products which are affected by commodity prices and are, therefore, subject to price volatility caused by weather, market conditions and other factors which are not considered predictable or within our control. Although many of the products purchased are subject to changes in commodity prices, certain purchasing contracts or pricing arrangements contain risk management techniques designed to minimize price volatility. The purchasing contracts and pricing arrangements we use may result in unconditional purchase obligations, which are not reflected in our accompanying Condensed Consolidated Balance Sheets. Typically, we use these types of purchasing techniques to control costs as an alternative to directly managing financial instruments to hedge commodity prices. In many cases, we believe we will be able to address material commodity cost increases by adjusting our menu pricing or changing our product delivery strategy. However, increases in commodity prices, without adjustments to our menu prices, could increase restaurant operating costs as a percent of company-operated restaurants revenue for our restaurant concepts.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

     We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

25

     In connection with the preparation of this Quarterly Report on Form 10-Q, as of May 19, 2008, an evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

(b) Changes in Internal Control

     There have been no changes in our internal control over financial reporting during the fiscal quarter ended May 19, 2008, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information.

Item 1. Legal Proceedings.

     See Note 6 of Notes to Condensed Consolidated Financial Statements for information regarding legal proceedings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
(Dollars in thousands, except per share amounts)

Issuer Purchase of Equity Securities

     The following table provides information as of May 19, 2008, with respect to shares of common stock repurchased by us during the fiscal quarter then ended (dollars in thousands, except per share amounts):

	(a)		(b)		(c)		(d)
							Maximum
							Dollar
							Value of
					Total		Shares that
					Number of Shares		May Yet Be
			Average		Purchased as Part		Purchased
	Total		Price		of Publicly		Under the
	Number of Shares		Paid per		Announced Plans		Plans or
Period	Purchased		Share		or Programs		Programs
January 29, 2008 — February 25, 2008		—	$	—		—	$	42,747
February 26, 2008 — March 24, 4008		—		—		—		42,747
March 25, 2008 — April 21, 2008 (1)		109,800		12.23		109,800		41,404
April 22, 2008 — May 19, 2008		—		—		—		41,404
Total		109,800	$	12.23		109,800	$	41,404

(1) We received and cancelled a total of 109,800 shares of our outstanding common stock in payment of taxes owed on ordinary income recognized by three of our executives in connection with the vesting of restricted stock awards issued under our stock incentive plans.

26

Item 6. Exhibits.

Exhibit #
3.1	Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement Form S-4 filed with the Securities and Exchange Commission on March 7, 1994).
3.2	Certificate of Amendment of Certificate of Incorporation of the Company, as filed with the Delaware Secretary of State on December 9, 1997 (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 26, 1998 filed with the Securities and Exchange Commission on April 24, 1998).
3.3	Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement Form S-4 filed with the Securities and Exchange Commission on March 7, 1994).
3.4	Certificate of Amendment of Bylaws of the Company (incorporated by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 26, 2004 filed with the Securities and Exchange Commission on April 7, 2004).
3.5	Certificate of Amendment of Bylaws, incorporated herein by reference to Exhibit 3.5 to the Company’s Current Report on Form 8-K filed December 13, 2006.
3.6	Certificate of Amendment of Bylaws, incorporated herein by reference to Exhibit 3.6 to the Company’s Current Report on Form 8-K filed December 10, 2007.
10.1	Third Amendment to Seventh Amended and Restated Credit Agreement, dated as of March 7, 2008, by and among the Company, BNP Paribas, a bank organized under the laws of France acting through its Chicago branch, as Administrative Agent, and the subsidiaries of the Company, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 13, 2008.
10.2	Employment Agreement, effective January 2004, by and between the Company and Richard E. Fortman.
10.3	Amendment No. 1 to Employment Agreement between the Company and Richard E. Fortman, effective as of December 6, 2005.
10.4	Amendment No. 2 to Employment Agreement between the Company and Richard E. Fortman, effective as of March 20, 2007.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CKE RESTAURANTS, INC. (Registrant)
Date: June 25, 2008	/s/ Theodore Abajian Theodore Abajian
	Executive Vice President
	Chief Financial Officer

28

Exhibit Index

Exhibit #
3.1	Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement Form S-4 filed with the Securities and Exchange Commission on March 7, 1994).
3.2	Certificate of Amendment of Certificate of Incorporation of the Company, as filed with the Delaware Secretary of State on December 9, 1997 (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 26, 1998 filed with the Securities and Exchange Commission on April 24, 1998).
3.3	Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement Form S-4 filed with the Securities and Exchange Commission on March 7, 1994).
3.4	Certificate of Amendment of Bylaws of the Company (incorporated by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 26, 2004 filed with the Securities and Exchange Commission on April 7, 2004).
3.5	Certificate of Amendment of Bylaws, incorporated herein by reference to Exhibit 3.5 to the Company’s Current Report on Form 8-K filed December 13, 2006.
3.6	Certificate of Amendment of Bylaws, incorporated herein by reference to Exhibit 3.6 to the Company’s Current Report on Form 8-K filed December 10, 2007.
10.1	Third Amendment to Seventh Amended and Restated Credit Agreement, dated as of March 7, 2008, by and among the Company, BNP Paribas, a bank organized under the laws of France acting through its Chicago branch, as Administrative Agent, and the subsidiaries of the Company, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 13, 2008.
10.2	Employment Agreement, effective January 2004, by and between the Company and Richard E. Fortman.
10.3	Amendment No. 1 to Employment Agreement between the Company and Richard E. Fortman, effective as of December 6, 2005.
10.4	Amendment No. 2 to Employment Agreement between the Company and Richard E. Fortman, effective as of March 20, 2007.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

29

EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of January ___, 2004 by and between CKE RESTAURANTS, INC., a Delaware corporation (the “Company”), and RICHARD E. FORTMAN (the “Employee”).

RECITALS:

     A. Employee is a key employee of the Company.

     B. The Company and Employee desire to enter into this Agreement to set forth the terms and provisions of Employee’s employment by the Company.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the parties agree as follows:

     1. Employment and Duties. Subject to the terms and conditions of this Agreement, the Company employs the Employee to serve in an executive and managerial capacity as Executive Vice President of Operations of the Company, and the Employee accepts such employment and agrees to perform such reasonable responsibilities and duties commensurate with the aforesaid positions as directed by the Company’s Board of Directors or as set forth in the Articles of Incorporation and the Bylaws of the Company. Any change in such titles or delegation of duties inconsistent with such titles without the consent of Employee, shall be deemed a termination without cause under Section 7(b) below.

     2. Term. The term of this Agreement shall commence on the first day of the Company’s fiscal year commencing in the year 2004 (the “Effective Date”) and shall terminate on the last day of the Company’s fiscal year ending in the year 2007, subject to prior termination as set forth in Section 7 below (the “Term”). The Term may be extended at any time upon mutual written agreement of the parties.

     3. Salary. Commencing on the Effective Date, and subject to the other provisions of this Agreement, the Company shall pay the Employee a minimum base annual salary of $250,000. The Chief Executive Officer of the Company may, from time to time, increase such salary in his sole discretion.

     4. Other Compensation and Fringe Benefits. In addition to any executive bonus, pension, deferred compensation and stock option grants which the Company may from time to time make available to the Employee upon mutual agreement, the Employee shall be entitled to the following:

          (a) The standard Company benefits enjoyed by the Company’s other top executives;

          (b) Provision by the Company during the Term and any extensions thereof to the Employee and his dependents of the medical and other insurance coverage provided by the Company to its other top executives;

          (c) Provision by the Company of supplemental disability insurance sufficient to provide two-thirds of the Employee’s pre-disability minimum base annual salary for a two-year period; and

          (d) For the fiscal years ending in January 2005, 2006 and 2007, Employee shall be entitled to a bonus in the amount determined by the Company’s Chief Executive Officer, in his sole discretion.

     The Company shall deduct from all compensation payable under this Agreement to the Employee any taxes or withholdings the Company is required to deduct pursuant to state and federal laws or by mutual agreement between the parties.

     5. Vacation. For and during each year of the Term and any extensions thereof, the Employee shall be entitled to reasonable paid vacation periods consistent with his positions with the Company and in accordance with the Company’s standard policies, or as the Company’s Board of Directors may approve. In addition, the Employee shall be entitled to such holidays consistent with the Company’s standard policies or as the Company’s Board of Directors may approve.

     6. Expense Reimbursement. In addition to the compensation and benefits provided herein, the Company shall, upon receipt of appropriate documentation, reimburse the Employee each month for his reasonable travel, lodging, entertainment, promotion and other ordinary and necessary business expenses in accordance with the Company’s policies then in effect.

     7. Termination.

          (a) For Cause. The Company may terminate this Agreement immediately for cause upon written notice to the Employee, in which event the Company shall be obligated only to pay the Employee that portion of the minimum base annual salary due him through the date of termination. Cause shall be limited to (i) the persistent failure to perform duties consistent with a commercially reasonable standard of care; (ii) the willful neglect of duties; (iii) criminal or other illegal activities involving dishonesty; or, (iv) a material breach of this Agreement.

          (b) Without Cause. Either party may terminate this Agreement immediately without cause by giving written notice to the other. If the Company terminates under this Section 7(b) , then it shall pay to the Employee the sum of (i) all amounts owed through the date of termination, plus (ii) an amount equal to the product of the Employee’s minimum base annual salary in effect as of the date of termination times the number of years (including partial years) remaining in the Term. Such payment to be made in a lump sum on or before the fifth day following the date of termination, and shall be in lieu of all further salary and bonus obligations under this Agreement. In addition, if the Company terminates under this Section 7(b), (i) all options granted to the Employee which had not vested as of the date of such termination shall vest concurrently with such termination, and, notwithstanding the terms of any option agreements, Employee may exercise any vested options, including by reason of acceleration, for a period after such termination which is the greater of what is provided in the respective option agreement or 30 days, and (ii) the Company shall maintain in full force and effect for the continued benefit of the Employee for the remainder of the Term, all employee benefit plans (except for the Company’s stock option plans) and programs in which the Employee was entitled to participate immediately prior to the date of termination, provided that the Employee’s continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Employee’s participation in any such plan or program

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is prohibited, the Company shall, at its expense, arrange to provide the Employee with benefits substantially similar to those which the Employee would otherwise have been entitled to receive under such plans and programs from which his continued participation is prohibited. If the Employee terminates under this Section 7(b), then the Company shall only be obligated to pay the Employee the minimum annual base salary due him through the date of termination.

          (c) Disability. If the Employee fails to perform his duties hereunder on account of illness or other incapacity for a period of six consecutive months, then the Company shall have the right upon written notice to the Employee to terminate this Agreement without further obligation by paying the Employee the minimum base annual salary, without offset, for the remainder of the Term in a lump sum or as otherwise directed by the Employee.

          (d) Death. If the Employee dies during the Term, then this Agreement shall terminate immediately and the Employee’s legal representatives shall be entitled to receive the minimum annual base salary for the remainder of the Term in a lump sum or as otherwise directed by the Employee’s legal representative. Executive’s outstanding Company options will immediately vest in full and be exercisable for a period of 90 days from Employee’s death.

          (e) Effect of Termination. Termination for any reason or for no reason shall not constitute a waiver of the Company’s rights under this Agreement nor a release of the Employee from any obligation hereunder except his obligation to perform his day-to-day duties as an employee.

          (f) Mitigation. Employee shall not be required to mitigate the amount of any payment provided for in this Section 7 by seeking other employment or otherwise, nor shall any compensation or other payments received by the Employee after the date of termination reduce any payments due under this Section 7.

     8. Non-Delegation of Employee’s Rights. The obligations, rights and benefits of the Employee hereunder are personal and may not be delegated, assigned or transferred in any manner whatsoever, nor are such obligations, rights or benefits subject to involuntary alienation, assignment or transfer.

     9. Confidential Information. The Employee acknowledges that in his capacity as an employee of the Company he will occupy a position of trust and confidence and he further acknowledges that he will have access to and learn substantial information about the Company and its operations that is confidential or not generally known in the industry, including, without limitation, information that relates to purchasing, sales, customers, marketing, and the Company’s financial position and financing arrangements. The Employee agrees that all such information is proprietary or confidential, or constitutes trade secrets and is the sole property of the Company. The Employee will keep confidential, and will not reproduce, copy or disclose to any other person or firm, any such information or any documents or information relating to the Company’s methods, processes, customers, accounts, analyses, systems, charts, programs, procedures, correspondence or records, or any other documents used or owned by the Company, nor will the Employee advise, discuss with or in any way assist any other person, firm or entity in obtaining or learning about any of the items described in this Section 9. Accordingly, the Employee agrees that during the Term and at all times thereafter he will not disclose, or permit or encourage anyone else to disclose, any such information, nor will he utilize any such information, either alone or with others, outside the scope of his duties and responsibilities with the Company.

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     10. Non-Competition During Employment Term. The Employee agrees that, during the Term and any extensions thereof, he will devote substantially all his business time and effort, and give undivided loyalty, to the Company, and that he will not engage in any way whatsoever, directly or indirectly, in any business that is competitive with the Company or its affiliates, nor solicit, or in any other manner work for or assist any business which is competitive with the Company or its affiliates. In addition, during the Term and any extensions thereof, the Employee will undertake no planning for or organization of any business activity competitive with the work he performs as an employee of the Company, and the Employee will not combine or conspire with any other employee of the Company or any other person for the purpose of organizing any such competitive business activity.

     11. Non-Competition After Employment Term. The parties acknowledge that the Employee will acquire substantial knowledge and information concerning the business of the Company and its affiliates as a result of his employment. The parties further acknowledge that the scope of business in which the Company is engaged as of the Effective Date is national and very competitive and one in which few companies can successfully compete. Competition by the Employee in that business after this Agreement is terminated would severely injure the Company. Accordingly, for a period of two years after this Agreement is terminated or the Employee leaves the employment of the Company for any reason whatsoever, except as otherwise stated hereinbelow, the Employee agrees (i) not to become an employee, consultant, advisor, principal, partner or substantial shareholder of any firm or business that in any way competes with the Company or its affiliates in any of their presently-existing or then-existing products and markets; and (ii) not to solicit any person or business that was at the time of such termination and remains an executive employee of the Company or any of its affiliates. Notwithstanding any of the foregoing provisions to the contrary, the Employee shall not be subject to the restrictions set forth in this Section 11 under the following circumstances:

          (a) If the Employee’s employment with the Company is terminated by the Company without cause; or

          (b) If the Employee’s employment with the Company is terminated as a result of the Company’s unwillingness to extend the Term of this Agreement.

     12. Return of Company Documents. Upon termination of this Agreement, Employee shall return immediately to the Company all records and documents of or pertaining to the Company and shall not make or retain any copy or extract of any such record or document.

     13. Improvements and Inventions. Any and all improvements or inventions which the Employee may conceive, make or participate in during the period of his employment shall be the sole and exclusive property of the Company. The Employee will, whenever requested by the Company, execute and deliver any and all documents which the Company shall deem appropriate in order to apply for and obtain patents for improvements or inventions or in order to assign and convey to the Company the sole and exclusive right, title and interest in and to such improvements, inventions, patents or applications.

     14. Actions. The parties agree and acknowledge that the rights conveyed by this Agreement are of a unique and special nature and that the Company will not have an adequate remedy at law in the event of a failure by the Employee to abide by its terms and conditions nor will money damages adequately compensate for such injury. It is therefore agreed between the parties

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that, in the event of a breach by the Employee of any of his obligations contained in this Agreement, the Company shall have the right, among other rights, to damages sustained thereby and to obtain an injunction or decree of specific performance from any court of competent jurisdiction to restrain or compel the Employee to perform as agreed herein. The Employee agrees that this Section 14 shall survive the termination of his employment and he shall be bound by its terms at all times subsequent to the termination of his employment for so long a period as Company continues to conduct the same business or businesses as conducted during the Term or any extensions thereof. Nothing herein contained shall in any way limit or exclude any other right granted by law or equity to the Company.

     15. Amendment; Integration. This Agreement contains, and its terms constitute, the entire agreement of the parties, and it may be amended only by a written document signed by both parties to this Agreement.

     16. Governing Law. California law shall govern the construction and enforcement of this Agreement and the parties agree that any litigation pertaining to this Agreement shall be adjudicated in courts located in California.

     17. Attorneys’ Fees. If any party finds it necessary to employ legal counsel or to bring an action at law or other proceedings against the other party to enforce any of the terms hereof, the party prevailing in any such action or other proceeding shall be paid by the other party its reasonable attorneys’ fees as well as court costs, all as determined by the court and not a jury.

     18. Severability. If any section, subsection or provision hereof is found for any reason whatsoever, to be invalid or inoperative, that section, subsection or provision shall be deemed severable and shall not affect the force and validity of any other provision of this Agreement. If any covenant herein is determined by a court to be overly broad thereby making the covenant unenforceable, the parties agree and it is their desire that such court shall substitute a reasonable judicially enforceable limitation in place of the offensive part of the covenant and that as so modified the covenant shall be as fully enforceable as if set forth herein by the parties themselves in the modified form. The covenants of the Employee in this Agreement shall each be construed as an agreement independent of any other provision in this Agreement, and the existence of any claim or cause of action of the Employee against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants in this Agreement.

     19. Notices. Any notice, request, or instruction to be given hereunder shall be in writing and shall be deemed given when personally delivered or three days after being sent by United States certified mail, postage prepaid, with return receipt requested, to the parties at their respective addresses set for the below:

To the Company:

CKE Restaurants, Inc.
6307 Carpinteria Avenue, Suite A
Carpinteria, CA 93013
Attention: General Counsel

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To the Employee:

Richard E. Fortman
11350 Rosecreek Drive
Moorpark, CA 93021

     20. Waiver of Breach. The waiver by any party of any provisions of this Agreement shall not operate or be construed as a waiver of any prior or subsequent breach by the other party.

     IN WITNESS WHEREOF the parties have executed this Agreement to be effective as of the date first set forth above.

CKE RESTAURANTS, INC.
By: Its:	/s/ Andrew F. Puzder Chief Executive Officer
EMPLOYEE
/s/ Richard E. Fortman
Richard E. Fortman

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EX-10.3

Exhibit 10.3

CKE Restaurants, Inc.

Amendment No. 1
To
Employment Agreement

     This Amendment No. 1 (the “Amendment”) to Employment Agreement is made effective as of December 6, 2005, by and between CKE Restaurants, Inc. (the “Company”) and Richard E. Fortman (the “Employee”).

RECITALS:

     A. The Company and the Employee entered into an Employment Agreement, dated as of January 2004 (the “Agreement”).

     B. The Company and Employee now desire to amend the Agreement as set forth below.

AGREEMENT

     1. Term. Section 2 of the Agreement shall read in its entirety as follows:

     “2. Term. The term of this Agreement (the “Term”) shall commence on the Effective Date and, subject to prior termination as set forth in Section 7 below, shall terminate three (3) years following the date on which notice of non-renewal or termination of this Agreement is given by either party to the other. Thus, the Term shall be renewed automatically on a daily basis so that the outstanding Term is always three (3) years following the date on which notice of non-renewal or termination is given by either party to the other. The Term may be extended at any time upon mutual written agreement of the parties.”

     2. Definitions. Terms used but not defined in this Amendment shall have the respective meanings assigned to them in the Agreement.

     3. Counterparts. This Amendment may be executed in multiple counterparts, each of which shall be deemed an original, and all of which shall constitute one Amendment.

     4. Terms and Conditions of Agreement. Except as specifically amended by this Amendment, all terms and conditions of the Agreement shall remain in full force and effect.

[Signature Page Follows]

     IN WITNESS WHEREOF, this Amendment is executed by the undersigned as of the date first written above.

/s/ Richard E. Fortman
Richard E. Fortman
CKE Restaurants, Inc.
By:	/s/ Peter Churm
	Peter Churm
	Director and Chairman of the Compensation Committee of the Board of Directors

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EX-10.4

Exhibit 10.4

CKE Restaurants, Inc.

Amendment No. 2
To
Employment Agreement

     This Amendment No. 2 (the “Amendment”) to Employment Agreement is made effective as of March 20, 2007, by and between CKE Restaurants, Inc. (the “Company”) and Richard E. Fortman (the “Employee”).

RECITALS:

     A. The Company and the Employee entered into an Employment Agreement dated as of January 2004, and amended on December 6, 2005 (the “Agreement”).

     B. The Company and Employee now desire to amend the Agreement as set forth below.

AGREEMENT

     1. Other Compensation and Fringe Benefits. Section 4(d) of the Agreement is hereby amended to extend the bonus provided for therein to fiscal years 2008, 2009 and 2010.

     2. Definitions. Terms used but not defined in this Amendment shall have the respective meanings assigned to them in the Agreement.

     3. Counterparts. This Amendment may be executed in multiple counterparts, each of which shall be deemed an original, and all of which shall constitute one Amendment.

     4. Terms and Conditions of Agreement. Except as specifically amended by this Amendment, all terms and conditions of the Agreement shall remain in full force and effect.

[Signature Page Follows]

     IN WITNESS WHEREOF, this Amendment is executed by the undersigned as of the date first written above.

/s/ Richard E. Fortman
Richard E. Fortman
CKE Restaurants, Inc.
By:	/s/ Andrew F. Puzder
	Andrew F. Puzder
	President and Chief Executive Officer

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EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Andrew F. Puzder, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended May 19, 2008, of CKE Restaurants, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 25, 2008

/s/ Andrew F. Puzder Andrew F. Puzder

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Theodore Abajian, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended May 19, 2008, of CKE Restaurants, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 25, 2008

/s/ Theodore Abajian Theodore Abajian

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification by the Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q for the period ended May 19, 2008, of CKE Restaurants, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Andrew F. Puzder, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m(a) or Section 78o(d)); and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

     In witness whereof, the undersigned has executed and delivered this certificate as of the date set forth opposite his signature below.

Date: June 25, 2008	/s/ Andrew F. Puzder
	Andrew F. Puzder
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification by the Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q for the period ended May 19, 2008, of CKE Restaurants, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Theodore Abajian, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m(a) or Section 78o(d)); and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

     In witness whereof, the undersigned has executed and delivered this certificate as of the date set forth opposite his signature below.

Date: June 25, 2008	/s/ Theodore Abajian
	Theodore Abajian
	Executive Vice President and Chief Financial Officer