Jack in the Box stock falls on outlook

From Bloomberg News

Jack in the Box Inc. shares fell by the largest amount in more than two years after the San Diego company said 2008 sales would trail its previous forecast.

The shares dropped $2.90, or 10%, to $24.87 after the restaurateur said same-store sales at its namesake Jack in the Box chain would be unchanged for the year. In February, the company forecast sales gains of 2% to 3%.

Same-store revenue will increase by as much as 3% at its Qdoba chain of Mexican restaurants, the company said. It had previously projected growth of 4% to 6%.

The company affirmed its 2008 profit forecast of $1.98 to $2.08 a share. Analysts predict $2.05, the average of estimates compiled by Bloomberg.

Jack in the Box posted a 2.9% drop in earnings in its fiscal second quarter to $26.4 million, or 44 cents a share, from $27.2 million, or 40 cents, a year earlier. Higher prices for cheese and eggs blunted lower labor costs and other savings.

"Like many retailers, we're seeing softer sales at our restaurants in California, Phoenix and Las Vegas, which have been hardest hit by the housing downturn, high fuel prices and unemployment," Chief Executive Linda Lang said.

Same-store sales for the second quarter missed the company's February forecast. They declined 0.1% at Jack in the Box restaurants and rose 2.4% at Qdoba. Growth of as much as 2% at Jack in the Box and as much as 5% at Qdoba had been predicted.

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