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Jack in the Box (NYSE:JBX - News) has announced a major cut in its fourth quarter earnings expectations as a result of slower sales, costs related to store closings, and the settlement of a lawsuit.
An earlier earnings estimate of 67 cents per share was reduced by almost half to 34 cents. Same store sales fell some 3 percent during the fourth quarter. The company expects fiscal year earnings of $2.06 on a 0.9 percent drop in same store sales.
Jack in the Box plans to close eight stores at a cost of $6.1 million and repurchase 76 restaurant properties. The company also faces a $9.5 million cost in settlement and legal fees from a 2001 class action suit alleging improper compensation practices for overtime pay.