020104 Jack in the Box Reports Same-Store Sales

San Diego - Jack in the Box Inc. operator and franchiser of Jack in the Box restaurants, reported that same-store sales for the four-week period ended December 23 were flat compared with those reported for the same period in fiscal 2001, which were 3.5% higher than the prior year. Through the first three periods of fiscal 2002, same-store sales increased .5% on top of a 4.1% increase for the first three periods last year.

Said Chairman and CEO Robert J. Nugent: “We realize that our guests' spending habits have been affected by national economic uncertainties. So it's more important than ever to continue offering value-oriented products and pricing, such as the recent addition of a new sandwich - the Big Cheeseburger - to our under-a-dollar Value Menu and free jumbo sizing with the purchase of a Bacon Ultimate Cheeseburger combo meal. In addition, we continue to develop higher standards of customer service that have helped us improve our industry rankings, according to such surveys as QSR Magazine's 2001 Drive-Thru Time Study.”

Based on the softer sales experienced through the first three periods, the company now expects its same-store sales to increase approximately .6% for the first quarter and approximately 1% for the year. These sales estimates are slightly lower than prior guidance; however, the company still expects to meet current earnings per share consensus estimates of 64 cents for the first quarter and $2.18 for the full year due to the implementation of its new Profit Improvement Program.

“In keeping with our philosophy of producing solid, disciplined earnings growth over time, this program is not simply a cost-cutting measure in response to what we feel is a short-term economic downturn,” Nugent said. “Rather, it is a comprehensive, company-wide effort designed to develop more effective ways to operate the business to better support our future growth, as well as generate improvements to our current profit margins.”

With the implementation of this new program, the company now expects its first quarter EBIT margin to be approximately 8.2% vs. 8.1% in prior guidance, with gross profit rate at approximately 19.3% vs. 19.0% previously, and with SG&A rate at approximately 11.1% vs. 10.9% previously, due primarily to reduced leverage on expenses resulting from the lower sales estimates.

For the full year, the Company now expects its EBIT margin to be approximately 8.3% vs. 8.2% in prior guidance, with gross profit rate at approximately 19.4% vs. 19.2% previously, and with SG&A rate at approximately 11.1% vs. 11.0% previously, again, primarily due to reduced leverage from lower sales estimates.

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