Click here for the entire article.
Jack in the Box Inc.â€™s fourth quarter profit increased 51 percent, soaring above analyst expectations, but sales dropped andÂ the company expressed caution aboutÂ 2010. The stock dropped 7.6 percent.
The San-Diego based restaurant company that operates Jack in the Box and Qdoba Mexican Grill franchises, four of which are in Chicago, had net income of $40.6 million, or 70 cents per diluted share, in the quarter ended Sept. 27.Â That compared with a net income of $26.9 million, or 47 cents per diluted share, in the same quarter ofÂ the prior year.Â The estimate by analysts polled by Yahoo Finance was 55 cents per diluted share.
Quarterly sales were $540.3 million compared with $582.7 million in the year-earlier quarter, a decrease of 7.3 percent.
In the fourth quarter Jack in the Box initiated two promotions, including offering two of its burgers for $1.00 each.Â It continued its rebranding plan including menu innovation, enhanced facilities and improvements in guest service.
â€œWe do know that we need to offer compelling value especially in this very competitive market place.Â We want to offer value that doesnâ€™t erode our margins.Â Itâ€™s really about profitable sale,â€ said Linda A. Lang, Jack in the Boxâ€™s chief executive officer and chairman of the board, in a conference call.
Lang said of expanding the Qdoba business, â€œWe donâ€™t want to go into these retail centers without tenants being adjacent to us. When the economy improves, we will ramp up growth.â€
R.J. Hottovy, an analyst with Morningstar Inc., said, â€œIâ€™m pleased with the fourth quarter results. They did a good job navigating a tough environment. The thing that I liked was the reimaging program: revamping the interior and exterior of stores. This might have a meaningful benefit, maybe not next year but the year after.Â I look at that as a positive.â€
Jack in the Box expects earnings of $1.90 per diluted share to $2.10 per diluted share for the year ending in September 2010. Analysts polled by Yahoo Finance estimate earnings of $2.32 per diluted share, and sales of $2.44 billion.
Net income in theÂ 52 weeks ended Sept. 27 was $118.4 million, or $2.05 per diluted share, compared with $119.3 million, or $2.01 per diluted share, in the year earlier. Revenue fell 2.7 percent to $2.47 billion from $2.54 billion.
Jack in the Boxâ€™s stock closed Thursday at $18.50, down $1.53.