Jack in the Box Posts Weaker-Than-Expected Results

By Joshua Jamerson 

Jack in the Box Inc. reported results that fell short of expectations for its latest quarter as its namesake restaurants struggled amid new offerings at rival chains.

Chairman and Chief Executive Lenny Comma said sales were sluggish at Jack in the Box restaurants "as several competitors began promoting aggressive value offers."

The company reported weakness in its breakfast and lunch offerings during the period. Mr. Comma said a "competitor's messaging around its launch of all-day breakfast had some impact on our results, particularly in the 10:30 a.m. to noon period." Jack in the Box also blamed the timing of its promotions.

In January, McDonald's Corp. posted its best U.S. quarterly sales in nearly four years, driven by its recently launched all-day breakfast menu.

Jack in the Box also narrowed its guidance for the year ending in October, estimating earnings, excluding items, of $3.50 to $3.63 a share, compared with its earlier forecast of $3.55 to $3.70.

In all, for the quarter ended Jan. 17, the company earned $33.2 million, or 92 cents a share, compared with $35.8 million, or 91 cents a share, a year earlier.

Operating earnings were 93 cents a share. Analysts polled by Thomson Reuters projected earnings of $1.03 a share on that basis.

Revenue edged up 0.5% to $470.8 million. Analysts had projected revenue of $475 million.

At the Jack in the Box brand, systemwide same-store sales rose 1.4%, with a 0.5% increase at company-owned restaurants.

The Qdoba chain posted a 1.8% systemwide increase, with same-store sales up 1.5% at company-owned locations. The company had projected 1% to 3% same-store sales increases for company-owned Jack in the Box restaurants and growth at Qdoba company-owned restaurants of up to 2%.

Qdoba, acquired in 2003, has posted stronger same-store sales growth than the flagship chain in recent quarters.

For the current quarter, the company expects Jack in the Box same-store sales to fall as much as 3% at company-owned restaurants. For Qdoba, the company anticipates sales rising up to 3% at company restaurants.

Shares, halted in after hours trading, closed Wednesday up 2.7% at $76.91.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

February 17, 2016 17:22 ET (22:22 GMT)

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