After yesterday's market close, the San Diego-based fast food company reported earnings of 93 cents per share, which fell short of analysts' estimates for earnings of $1.03 per share.
Revenue for the period was $470.8 million and did not meet analysts' expectations for revenue of $475 million.
Sales were lower-than-expected "as several competitors began promoting aggressive value offers," the company said in a statement.
A competitor's new all-day breakfast menu impacted Jack in the Box's sales between 10:30 a.m. and noon, the company added. McDonald's Corp.'s (MCD) launched an all-day breakfast menu last year.
"The company led to believe that things were very strong," TheStreet's Jim Cramer said on CNBC's Squawk on the Street this morning.
Management's bullish attitude is dragging the stock down more than 17% this morning, Cramer added.
Additionally, Jack in the Box forecasts full-year earnings between $3.50 to $3.63 per share compared to analysts' estimates for $3.63 per share.
The company operates Jack in the Box and Qdoba Mexican restaurants.
(Jack in the Box is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holdings here.)
Insight from TheStreet's Research Team
TheStreet's Jim Cramer and Jack Mohr commented on Jack in the Box's earnings in a recent post on Action Alerts PLUS. Here is a snippet of what they had to say about the stock:
We see little reason to defend the shares at this point in time after poring through the entire report. There are blatant issues at the operational level and we have no appetite for CEO Lenny Comma's excuse-riddled explanation for the weak results, which he blamed on the aggressive competitive environment.
We feel misled by Comma's assurances around the strong, sustainable growth trajectory at both of his businesses (Qdoba and Jack in the Box, or JIB). As we reflect on the earnings release, we realize that we should have been more critical and skeptical of management's consistently optimistic commentary around the state of its business. We truly did believe Comma's recent statements in which he confirmed that both businesses were well-positioned to deliver sustainable, 20%-plus annual overall EPS growth starting in 2016.
-Cramer and Mohr "Jack in the Box Pops Up With Utterly Disappointing Report" originally published 2/17/16 on Action Alerts PLUS.
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Separately, TheStreet Ratings Team has a "Hold" rating with a score of C+ on the stock.
The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.
The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth.
As a counter to these strengths, the team also finds weaknesses including generally higher debt management risk, a generally disappointing performance in the stock itself and weak operating cash flow.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: JACKJACK data by YCharts