STRATEGIC PARTNERS
CHICAGO (MarketWatch) -- A profit warning from Jack in the Box Inc. pushed shares of the fast-food chain down more than 17% Wednesday and pressured shares of other restaurant companies as fears grew that consumers may be crimping on spending.
September 20, 2005
Before the open of trading, Jack in the Box lowered its fiscal fourth-quarter same-store sales growth forecast to 1.5% from a previous 3%. The company said the cut was due mostly to lower than anticipated sales of its "Ultimate Club" sandwich and higher gasoline prices, "which may now be impacting consumer habits."
That lower outlook is expected to reduce the fast-food chain's earnings by about 2 cents a share on the quarter. Looking further out to fiscal 2006, Jack in the Box expects earnings of $2.50 to $2.54 a share versus the average analysts' estimate of $2.60 a share compiled by Thomson First Call.
Shares of Jack in the Box ended the day down almost six bucks at $27.70 after scraping to a 52-week low of $27.51 during the session.
The company also announced the launch of a $150 million stock repurchase program and affirmed its commitment to become a national restaurant chain. In addition, Jack in the Box is canceling its test of the JBX Grill concept, and as a result will take a charge of 5 cents a share.
CKE Restaurants Inc., however, was a modest gainer, picking up a dime to $12. Late Tuesday, the parent of Carl's Jr. and Hardee's reported second-quarter net earnings of $8.4 million, or 13 cents a share -- a turn from the loss $12.7 million or 22 cents a share in the year-ago period.
