Jack in the Box Says Estimates on Target

Jack in the Box Inc. said second-quarter and annual profit will meet the company’s estimates as the hamburger-restaurant chain reduces costs.

Earnings will be 44 cents a share in the quarter ending April 14 and $2.24 this year, spokeswoman Karen Bachmann said. Cost-cutting efforts include using less paper and sending fewer items by overnight mail, the company said.

Jack in the Box is trimming expenses as second-quarter sales are expected to be less than forecast because of sluggish demand in markets including San Francisco, Las Vegas and Austin, Texas. Sales will improve in the second half of the year as the company introduces a new sandwich and increases advertising on lower-price items, Jack in the Box said.

“They’re tightening their belts,” said Jay Pearlstein, senior vice president of Atlantic Trust Pell Rudman. The firm sold its Jack in the Box stock about three months ago, he said. Rudman manages about $8 billion in assets, including shares in Brinker International Inc., whose restaurants include Chili’s Grill & Bar.

Jack in the Box said it may continue converting some restaurants to franchises. That also will help reduce costs, analysts said.

Shares of San Diego-based Jack in the Box, which has more than 1,800 restaurants, rose 63 cents to $29.76 on the New York Stock Exchange. The stock is up 8% this year.

Second-quarter sales will be about $416 million, compared with an earlier forecast of $420 million, Jack in the Box said. Same-store sales, or sales at restaurants open at least a year, are expected to fall about 0.6%.

Sales are forecast to rise 1% for the rest of the year as the firm increases marketing, Jack in the Box said. Jack in the Box was projected to earn 44 cents in the second quarter and $2.23 this year, according to Thomson Financial/First Call.