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New menu items, lower costs lift Jack in the Box

From Bloomberg News

Jack in the Box Inc., the operator of its namesake restaurants and Qdoba Mexican Grill, said Wednesday that first-quarter earnings jumped 48% as it added menu items and costs fell. Profit beat some analysts’ estimates, sending the shares up 10% to a record.

Net income rose 48% to $37.4 million, or $1.03 a share, from $25.2 million, or 70 cents, a year earlier. Sales rose 5.4% to $856.7 million, the San Diego-based company said. Analysts surveyed by Bloomberg had estimated profit, excluding certain costs or gains, of 78 cents a share on average.

Chief Executive Linda Lang is upgrading restaurants and adding steak sandwiches and mozzarella sticks, helping to boost profit margins to 18.4% from 16.4% a year earlier.

Jack in the Box used a new $625-million credit facility, which includes $150 million in revolving credit and a $475-million term loan, to clear a $268-million term debt and fund a tender offer.

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Jack in the Box expects to earn 67 cents to 70 cents a share for the second quarter, which reflects the tender offer. Analysts estimate that it will earn about 66 cents a share, according to Bloomberg data.

The company plans to open more restaurants in existing markets throughout the year.

Shares had their largest percentage gain in a year, jumping 10%, or $6.45, to $71.02.


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