Profit at Jack in the Box Rises 77%, Beats Forecasts
Fast-food operator Jack in the Box Inc. on Wednesday reported a 77% jump in its fiscal first-quarter profit and raised its earnings outlook for the current year.
The San Diego-based company, whose flagship burger chain has 875 locations in California and more than 2,000 altogether, reported net income of $25.4 million, or 68 cents a share, for the quarter ended Jan. 23, up from $14.4 million, or 39 cents, for the year-earlier period.
That beat Wall Street analysts’ average estimate of 66 cents, according to Thomson First Call.
Revenue for the quarter rose 10% to $739 million from $670 million in the first quarter of 2004.
Sales at restaurants open for at least one year rose 2.2% during the quarter, below the company’s forecast of a 2.5% to 3% jump.
Chief Executive Robert Nugent told analysts that severe rains in its Western markets hurt sales in January.
The company raised its earnings guidance for 2005 to $2.43 a share, up from $2.33. It attributed the revision to lower rates on income tax and interest expenses, as well as projected higher returns from franchising operations.
The company estimated that 3 cents of the increase would come from a new $65-million stock repurchase program. The company completed a previous $35-million buyback at the start of the first quarter.
Jack in the Box set its earnings guidance for the first quarter of 2005 at 50 cents a share, below the average Wall Street forecast of 52 cents.
One analyst lauded the company’s performance, but remained cautious on its outlook for coming quarters.
“Results have been positive over the last year or so with improved same-store sales and margins,” analyst Fitzhugh Taylor of Banc of America Securities wrote in a research note. Taylor, whose firm owns Jack in the Box shares, added that challenges, particularly increasing same-store sales, “will continue to get tougher.”
Jack in the Box shares jumped 6% immediately after the earnings were released, but gave up all the gains as the day went on. The stock ended down 17 cents at $33.38 in New York Stock Exchange trading.
