021230 Jack in the Box Cuts Its Profit ViewDecember 20, 2002San Diego, CA - Hamburger chain Jack in the Box Inc. cut its profit outlook as stiff competition in the form of dollar menus and other price cuts eats into sales and profits. The company said it now expects earnings of 55 cents a share for the fiscal first quarter ending Jan. 19, down from a previous forecast of 63 cents. It also cut its full-year estimate for 2003 to a range of $2.01 to $2.04 a share from a previous forecast of $2.42. Analysts, on average, forecast earnings of 63 cents a share for the first quarter and $2.36 for fiscal 2003, according to Thomson First Call. Sales at restaurants open at least a year are now expected to fall about 2.7 percent during the first quarter, rather than the 1.5 percent decrease the company originally expected. For the year, same-restaurant sales are expected to be flat, not up 1.5 percent to 2 percent as previously thought. The warning comes two days after McDonald's Corp., the world's largest fast-food company, forecast its first-ever quarterly loss as sales deteriorated in the saturated fast food market. McDonald's and competitor Burger King introduced dollar menus recently in order to woo customers in a market with more and more choices. The industry "is experiencing unprecedented price competition, which is only expected to intensify as the year progresses," Robert Nugent, chairman and chief executive officer of Jack in the Box, said in a news release. "Additionally, we believe that more conservative sales expectations are prudent in view of the nation's continuing economic weakness." The company also said it expects to open 19 restaurants in the first quarter, down from 35 openings a year ago. First-quarter company restaurant sales, it added, should be about $560 million, compared with $553 in the period the previous year.
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