Jack in the Box

(JBX)

said its May same-store sales slipped, but the company still boosted its third-quarter and full-year outlook.

The fast food chain reported a same-store sales decrease in restaurants open at least a year of 1.1%, compared with an increase of 3.6% in the year ago month. Year to date, sales have dropped 0.1%, compared with a 4.1% increase last year.

The company said sales remained soft due to competitive pressures and a rough economic environment, leading to a third-quarter forecast of a 1.2% drop in same-store sales, compared with a 4.3% increase a year ago. Jack in the Box now sees total third-quarter sales in the range of $430 million, down from the company's previous guidance of $437 million.

In a press release, Jack in the Box said that its "lineup of new products and marketing initiatives planned for the remainder of the year is strong and will help build momentum." The company said this new lineup, as well as the introduction of "the most significant quality-improvement initiative" for the sandwich line since 1999, should help boost fourth-quarter same-store sales 1.9%.

Despite its weaker same-store sales, Jack in the Box said its earnings results should be ahead of estimates. The company expects to earn 60 cents a share in the third quarter, ahead of the consensus estimate of 57 cents provided by Thomson Financial/First Call, due primarily to the favorable resolution of a tax issue and a modest increase in restaurant conversion to franchises.

For the fourth quarter, the restaurant chain sees earnings of 67 cents a share, above its previous estimates of 58 cents and ahead of the 58 cents a share consensus.

Shares of Jack in the Box closed at $32.43 Monday before the news.