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Shares of Jack in the Box (JACK) were lower during mid-morning trading on Thursday following a downgrade of the stock at Keybanc to "Sector Weight" from "Overweight."

Keybanc analyst Chris O'Cull noted that the firm's announcement to explore strategic alternatives for its subsidiary Qdoba overshadowed a disappointing quarterly report.

On Tuesday Jack in the Box said that it was exploring options for Qdoba as its valuation has been "impacted by having two different business models," which sent shares soaring. 

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However, O'Cull is concerned with Jack in the Box's "SRS performance and the competitive environment."  He expects sluggish top line performance to continue for both brands over the next several quarters.

For its second-quarter the San Diego-based fast-food restaurant chain reported a decline in same-store sales of 2.4%, more than the 1.7% decrease analysts had projected.

The firm posted earnings of 98 cents per share on $369 million in revenue. Wall Street had expected earnings of 91 cents a share on $369 million in revenue. 

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