Jack in the Box ( JACK) reported fiscal fourth quarter earnings on Nov. 22. Revenue: $563.2 million, compared with year-earlier sales of $540.3 million. Net Income: $4 million, compared with year-earlier earnings of $40.6 million. Net Earnings Per Share: 7 cents, compared with year-earlier EPS of 70 cents per share. Analysis: Stifel Nicolaus analyst Steve West had a hold rating on Jack in the Box shares with a price target of $24.02. In October, RBC Capital Markets upgraded Jack in the Box to outperform from sector perform, and raised its price target on the stock by $6 to $28. Jack in the Box missed earnings expectations but revenue came in better-than-expected for the thirteen weeks ended Oct. 3. Overall comps at Jack in the Box restaurants fell 3.3%, including 2.8% at franchised stores and 4% at company-owned locations. The decline was "impacted by high unemployment in our major markets for our key customer demographics," said CEO Linda A. Lang. Comps at Qdoba restaurants grew 5.6%, attributed to demand for its Craft 2 menu -- a combo-plate option where customers can mix and match two items -- and higher catering sales. Jack in the Box forecast fiscal 2011 first quarter comps to be in a range from down 1% to up 1% at Jack in the Box restaurants, and up 4% to 6% at Qdoba restaurants. For the fiscal year, comps should be in a range from down 2% to up 2% at Jack in the Box restaurants, and up 2% to 4% at Qdoba. Fiscal 2011 earnings per share are expected in a range of $1.41 to $1.68, in line with analysts' consensus call for EPS of $1.54. Ahead of the earnings release, West had lowered his forecast for 2010's fiscal fourth quarter to 34 cents per share, below consensus and down 52% year-over-year. The revision was attributed to rising ground beef prices, lower refranchising gains and comp deleverage. The analyst expected same-store sales to decline 4%, with comps at its Qdoba restaurants up 4%. West expected Jack in the Box to book a 1.5% to 2% decline in quarterly revenue despite an extra operating week in the quarter, with net new unit growth of 1% to 2% overall, offset by refranchising. "Though we believe the refranchising program continues to benefit margins, recently the decline in company comps is causing significant deleverage leading to lower restaurant-level operating margins, expected down 280 to 290 basis points," he noted. Franchise royalty growth of 15% should offset some of the margin declines, he added, though what he calls the "lumpy" timing of refranchising deals could cause a drop in consolidated operating margins of up to 310 basis points, after excluding refranchising gain differences. West also said to look for a three-cent-per-share gain from non-operating items based on a lower share count and lower interest expense, offset partially by a higher tax rate.