Jack in the Box Lifts Outlook on Profit

Jack in the Box Inc. on Wednesday raised its fiscal 2005 earnings forecast for a second time this year after fiscal second-quarter net income beat the company’s forecast. The shares rose 10%.

The San Diego-based fast-food chain said earnings for the fiscal year would be $2.46 a share. In February, it raised its forecast to $2.43 from $2.33. Sales at restaurants open at least one year would gain about 3% for the year ending Oct. 2 as contests and new products such as chicken or burgers on ciabatta bread bring in customers.

Net income for the quarter ended April 17 rose 11% to $20.7 million, or 55 cents a share, from $18.7 million, or 51 cents, a year earlier, Jack in the Box said. Revenue rose 11.5% to $577 million. Sales at its namesake restaurants open at least a year rose 3.1%, higher than the 1% increase it had forecast.

Earnings per share beat Jack in the Box’s February forecast by 5 cents. The company attributed the gains to the popularity of its new chicken sandwiches and entree salads, spokesman Brian Luscomb said.

Compliance with the Sarbanes-Oxley guidelines for corporate accountability and other expenses cut 5 cents a share from earnings, the company said.

Like many in the fast-food industry, Jack in the Box has revitalized sales in the last two years, adding higher-priced products such as salads and deli-style sandwiches that have struck a chord with its adult customers.

“They have really stepped up their product offerings,” said Monarch Research analyst John Beisler.

In a separate statement, Jack in the Box announced Wednesday that Paul Schultz, 51, executive vice president of operations and franchising, was promoted to president and chief operating officer. He replaces Linda Lang, who this month was named chairwoman and chief executive, effective Oct. 3, when Robert Nugent retires. Chief Financial Officer Jerry Rebel was named executive vice president.

Jack in the Box shares rose $3.50 to $40.20 on the New York Stock Exchange.

Bloomberg News and Reuters were used in compiling this report.