Jack in the Box Inc. announced Wednesday that its fiscal Q3 revenue finished ahead of estimates, at $523 million, but was still short of expectations and down 9.4 percent from the same period in 2009.
For the full year, the company cut its profit forecast to $1.65 to $1.75 per share, down from May's prediction of $1.85 to $2.05 per share.
Third quarter results were adversely impacted by several factors, including impairment charges ($2.6 million), market-to-market adjustments on investments (including the company's non-qualified retirement plans), an insurance recovery from Hurricane Ike ($2 million), an increase in workers' compensation reserves, deferred financing costs in refinancing existing indebtedness ($500,000) and a decrease in same-store sales (9.4 percent) compared to 2009.
Another potential factor is the rise in food and packaging costs, which are approximately 2 percent higher this year.
On the other hand, Qdoba Mexican Grill, a Jack in the Box Inc. chain, experienced a 4.6 percent rise in same-store sales from 2009.
Linda A. Lang, chairman, chief executive officer and president, said, "Jack in the Box sales continue to be impacted by high unemployment in our major markets for our key customer demographics. Although our sales outlook remains cautious and largely reliant upon improvement in the economy, we are focused on enhancing the guest experience. We are intensifying our efforts around service consistency and are investing in making noticeable quality improvements to some of our signature products."
The company also plans to re-image its restaurants by the end of 2001.
Lang attributed Qdoba's growth to its Craft 2 menu, higher catering sales and an increase in spending within the fast casual segment.
