Jack in the Box 1st quarter earnings off, sales up

by Bryan Salvage
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SAN DIEGO – Jack in the Box Inc. announced Feb. 17 earnings from continuing operations for the first quarter ended Jan. 18, 2009, of $28 million, or 49 cents per diluted share, compared with earnings from continuing operations of $36.3 million, or 60 cents per diluted share, for the first quarter of fiscal 2008. Same-store sales at Jack in the Box company restaurants, however, increased 1.7% in the first quarter on top of a year-ago increase of 1.5%.

"Our new Teriyaki Bowls, which were launched in the western U.S. in October, helped drive sales in the quarter, especially in some of our major markets," said Linda A. Lang, chairman and chief executive. Launched at most of the chain's restaurants in the western U.S. in the first quarter, the Teriyaki Bowls rolled out to the rest of the U.S. on Jan. 29.

Consolidated restaurant operating margin was 14.6% of sales in the first quarter of 2009 compared with 17.1% in the same quarter last year. The company had guided first-quarter margin to decline to between 15.0% and 15.5%. The 250 basis-point reduction in restaurant operating margin versus the prior year was due primarily to higher food and packaging costs, which were nearly 8% higher than the same quarter last year. As anticipated, beef costs were 20% higher than last year.

Two new products that feature chicken breast fillet, the Breakfast Homestyle Chicken Biscuit and Homestyle Ranch Chicken Club, were added to the chain's central and southeastern U.S. markets.

Later in the quarter, the company plans to introduce Mini Sirloin Burgers. This premium product, which the company claims rivals the quality and taste of similar items offered by casual-dining restaurants, features sirloin patties topped with American cheese, grilled onions and ketchup served on bakery-style buns inspired by the flavor of a Hawaiian sweet roll.

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