Jack in the Box earnings up in fourth quarter

by Bryan Salvage
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SAN DIEGO — Jack in the Box Inc. announced earnings from continuing operations of $40.6 million, or 70 cents per diluted share, for the fourth quarter ended Sept. 27, compared with earnings from continuing operations of $26.1 million, or 45 cents per diluted share, for the fourth quarter of fiscal 2008.

For fiscal 2009, earnings from continuing operations totaled $131.0 million, or $2.27 per diluted share, compared with $118.2 million, or $1.99 per diluted share in fiscal 2008. Both the fourth quarter of 2008 and fiscal year 2008 included a negative impact of approximately 4 to 5 cents per diluted share for losses and costs related to Hurricane Ike, the company said.

"Our ability to grow earnings in a recessionary environment, marked by the highest unemployment levels in 26 years, was largely due to the successful execution of strategic initiatives, such as refranchising, new unit growth and improving our cost structure," said Linda A. Lang, chairman and chief executive officer. "Our performance in these areas more than offset ongoing weakness in sales while strengthening our core brand and positioning the company for continued growth and margin expansion when the economy recovers."

Same-store sales at company restaurants, however, decreased 6.0% in the fourth quarter of 2009, reflecting weakening trends during the last half of the quarter. This compares to a year-ago decrease of 0.8%, which reflected a negative impact of approximately 1.0% from Hurricane Ike.

For fiscal year 2009, same-store sales at company Jack in the Box restaurants decreased 1.2% compared to a 0.2% increase in fiscal 2008.

System same-store sales at Qdoba Mexican Grill decreased 3.1% in the fourth quarter versus a year-ago decrease of 1.0%. For the full year, system same-store sales decreased 2.3% at Qdoba compared to a fiscal 2008 increase of 1.6%.

The company said its food and packaging costs were 320 basis points better than prior year. Commodity costs were approximately 5.5% lower in the quarter versus prior year, better than anticipated. Most commodities trended favorable to the company’s expectations, including beef and cheese, which were down 17% and 31%, respectively, from last year’s fourth quarter. Food and packaging costs also benefitted from price increases and the company’s margin-improvement initiatives.

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