Jack in the Box profit down
Sales and profit were down at the nation's fifth-largest burger chain during the fiscal second quarter of 2011, Jack in the Box Inc. said Wednesday.
The San Diego-based chain reported earnings of $6.8 million, or $0.13 per diluted share, for the three months ended April 17. During the same period last year, the company earned $17.7 million, or $0.32 per diluted share. Sales were also lower: Company-owned stores sold $321 million during the quarter, down from $388 million during the same period last year.
Part of the reason for the drop was that the company sold a number of restaurants to franchisees, so sales from those restaurants no longer count as revenue for the corporate chain.
Still, customer traffic appeared to be stabilizing. When the chain's 956 company-owned stores were looked at individually, a measure called same-store sales, revenue was up slightly year-over-year by about 0.8%. It was the second quarter in a row that same-store sales were up.
Chairwoman and Chief Executive Officer Linda A. Lang said the increase in same-store sales was unexpected, causing Jack in the Box to revise its view of how well the chain will do over the coming months.
During the third quarter, the company is predicting that same-store sales will rise 2% to 4%, compared with a 9.4% decrease during the same period last year.
Sales at the company's 549 Qdoba Mexican Grill restaurants were up about 6%.
Part of the reason profit was lower was that last year Jack in the Box had greater revenue from the sale of restaurants to franchisees, the company said. High prices for commodities also played a role.
But the company said its pension expenses had declined because of a plan to stop funding employee pensions at the end of 2015.
Jack in the Box shares rose 79 cents to $21.08 before the results were reported Wednesday. The stock has not done well in recent months, losing about 8% of its value since May 2010. The company bought back 1,125,000 of its shares during the second quarter.
-- Sharon Bernstein