Jack in the Box Lowers Forecasts

Jack in the Box Inc. on Thursday lowered its profit forecasts for a third time this year as bigger fast-food restaurants slash prices. The company’s shares fell 20%.

Profit will be about $21 million, or 55 cents a share, in its fiscal first quarter ending Jan. 19, the company said. It had expected to earn 63 cents.

Sales at restaurants open at least a year will fall about 2.7% in the quarter.

McDonald’s Corp., Burger King and Wendy’s International Inc. have been slashing prices as they fight over customers in a market saturated with hamburger restaurants. McDonald’s said Tuesday that it would have its first quarterly loss in almost 40 years.

Restaurants “can’t make money during the price war,” said Frederick Sears, a portfolio manager at Investors Capital Corp., which sold its shares of Jack in the Box and doesn’t own any restaurant-related stocks. “It’s a horrible business to be in right now.”

Shares of San Diego-based Jack in the Box fell $4.02 to $16.14 on the New York Stock Exchange. The decline was the shares’ biggest one-day drop since January 1993. They’ve tumbled 41% this year.

The company said it is introducing two products, the Jr. Bacon Cheeseburger and the Chili Cheeseburger, to its dollar menu to compete with bigger rivals. Jack in the Box has 1,860 restaurants in 17 states.

McDonald’s has about 30,000 worldwide.

Jack in the Box had expected first-quarter same-store sales to fall 1.5%. Same-store sales will be little changed this year.

In the year-ago first quarter, Jack in the Box earned $26.7 million, or 67 cents. Last year, the company had net income of $83 million, or $2.07 a share.