Jack in the Box 3rd-Quarter Net Down 36% on Sales Decline, RestructuringFont size: A | A | A 4:34 PM ET 8/8/12 | Dow Jones By Kristin Jones
Jack in the Box Inc.'s (JACK) fiscal third-quarter profit fell 36% as the company reported weaker-than-expected same-store sales at Qdoba restaurants, and restructuring charges.
Jack in the Box has been focusing its efforts on improving the consistency of its service and the quality of signature items, and upgrading its restaurants. The company's Jack in the Box restaurants has reported recent same-store sales growth after a period of decline, though margins have remained pressured by high commodity costs.
For the quarter ended July 8, Jack in the Box posted a profit of $11.59 million, or 26 cents a share, down from $18.7 million, or 38 cents a share a year earlier.
The third quarter included restructuring charges of $11.3 million, or 16 cents a share, related to a voluntary early retirement program for employees. The latest period also included a per-share gain of 5 cents from refranchising, while the year-ago quarter included a refranchising gain of 13 cents.
Revenue fell 3.4% to $501.8 million.
Analysts polled by Thomson Reuters recently predicted a per-share profit of 35 cents on revenue of $510 million.
Same-store sales grew 3.4% at Jack in the Box company restaurants and grew 2.1% at Qdoba system restaurants. The company in May had projected growth of 3% to 4% for both.
Restaurant operating margin widened to 16.5% from 12.5%. Total company restaurant costs fell 17%.
On an adjusted basis, the company, which also operates the Qdoba Mexican Grill restaurant chain, raised its full-year earnings guidance. It now sees a per-share profit of $1.48 to $1.58, excluding some restructuring charges, up from its previous prediction of $1.28 to $1.50 a share.
It also said full-year same-store sales growth for Jack in the Box company restaurants will grow 4% to 4.5%, at the higher end of its previous view. But the company lowered its full-year same-store sales projections for Qdoba system restaurants, now seeing growth of 2.5% to 3%. It previously said both restaurants' same-store sales would grow 3.5% to 4.5%.
For its fourth quarter, the company expects same-store sales to increase 2% to 3% at Jack in the Box company restaurants, and 1% to 2% at Qdoba system restaurants.
Shares fell fractionally to $26 in after-hours trading. Through the close, the stock was up 25% so far this year.
Write to Kristin Jones at firstname.lastname@example.org
***On an adjusted basis, the company, which also operates the Qdoba Mexican Grill restaurant chain, raised its full-year earnings guidance. It now sees a per-share profit of $1.48 to $1.58, excluding some restructuring charges, up from its previous prediction of $1.28 to $1.50 a share.