Investors Unwind From Jack in the Box

Jack in the Box shares close 6.3% lower on high volume after the burger chain offers disappointing guidance.
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SAN DIEGO (

TheStreet

) -- Shares of

Jack in the Box

(JACK) - Get Report

changed hands at rapid speed Thursday after the fast food chain disappointed investors with weaker-than-expected profits.

More than two million shares were in play at the close of trading, compared with their three month trailing average volume of just 547,000.

Higher-than-normal activity proved sour for Jack in the Box shares, however, as investors bid the stock down 6.3% to close at $19.36.

Adding to shareholder ire was an updated earnings outlook below the expectations of Wall Street analysts. Jack in the Box said it now expects to earn between $1.65 and $1.75 per share for 2010, including the impact of a 53rd week in the reporting year, down from its previously announced guidance for earnings in a range between $1.85 and $2.05 per share. Analysts predicted full-year earnings per share of $1.94.

Jack in the Box's comparable same-store sales, a key metric in the restaurant industry that measures sales at stores open at least one year, decreased 9.4% in the recent quarter, compared with a year-earlier decline of 1%. At Qdoba Mexican Grill restaurants, a quick-service chain Jack also operates and franchises, comps grew 4.6% compared with a year-earlier decrease of 2.8%.

Restaurant chain

Chipotle Mexican Grill

(CMG) - Get Report

recently

booked comps growth of 8.7%

year-over-year, putting the burrito chain "at the top of the pack in industry leading comps," according to Oppenheimer analyst Matthew J. DiFrisco.

Buffalo Wild Wings

(BWLD)

said last week its comps

declined 0.1% at company-owned restaurants last quarter

, and 0.7% at franchised locations. Reporting a decrease in comps would normally be viewed as a negative, especially in light of fellow restaurant chains' strong performance by that metric in recent months. But analysts expected a wider decline from Buffalo Wild Wings after the key metric fell 3.7% in April.

>>Buffalo Wild Wings: Stock Winners

Panera Bread

(PNRA)

said last week it

grew comps 9.9% in its second quarter

, year-over-year. Pizza purveyor

Domino's Pizza

(DPZ) - Get Report

posted comps growth of 8.8%

, a strong number but disappointing to investors who were looking for the figure to come in around 10%.

System-wide sales at Jack in the Box fell 9.1% to $523.3 million, narrowly beating expectations, which chief executive Linda A. Lang attributed mainly to high unemployment among the hamburger chain's key demographics. The bulk of Jack in the Box restaurants are in California, a state consistently plagued by higher-than-average unemployment rates.

>>Initial Jobless Claims Up 19,000 to 479,000

Jack in the Box booked earnings of $24.2 million, or 44 cents per share, in its fiscal third quarter that ended July 4th, up 23.5% from year-earlier profits of $19.6 million, or 34 cents per share. Excluding one-time items related to mark-to-market adjustments and an increase in workers' compensation reserves, adjusted earnings per share were 50 cents, still three pennies short of Wall Street's expectations for 53 cents per share. Analysts typically exclude such extraordinary items when forecasting earnings estimates.

-- Reported by Miriam Marcus Reimer from New York.

RELATED STORIES:

>>Buffalo Wild Wings: Stock Winners

>>Chipotle Leading the Pack

>>McDonald's Falters on Comps

>>Starbucks Brews a Stronger Dividend

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