Jack in the Box Inc. (NYSE: JBX), today reported earnings of $14 million for the fourth quarter ended September 29 compared with $20.7 million in the fourth quarter a year ago. Earnings per diluted share were 35 cents, one cent higher than forecast.
Excluding $15.7 million in one-time charges, or $10.4 million after tax, related to a legal settlement and to store closures, fourth-quarter earnings were $24.4 million, or 61 cents per diluted share compared with 52 cents last year.
For fiscal 2002, net earnings were $83 million compared with $82.2 million a year ago. Diluted earnings per share for fiscal 2002 were $2.07 compared with $2.06 last year.
Excluding the one-time charges in fiscal 2002 and the one-time adjustment for the adoption of SAB 101 in fiscal 2001, the company earned $93.4 million compared with $84.1 million last year. On the same basis, diluted earnings per share were $2.33 compared with $2.11 last year.
Company restaurant sales in the fourth quarter were $424.1 million, 3.1 percent higher than the fourth quarter last year. For fiscal 2002, company restaurant sales increased 6.3 percent to $1.82 billion. Systemwide sales for the fourth quarter were $522 million, and were $2.24 billion for fiscal 2002, 5.6 percent higher than last year.
Total revenues for the quarter increased 4.7 percent to $463.3 million compared with the fourth quarter of fiscal 2001, and increased 7.2 percent for the year to $1.97 billion.
Also in the fourth quarter, sales at company restaurants open more than a year declined 2.7 percent compared with last year's 3.8 percent increase, but were slightly favorable to forecast. For the year, same-store sales declined 0.8 percent compared with a 4.1 percent increase in fiscal 2001.
"We continue to be disappointed in our sales performance," said CEO Robert J. Nugent. "We did not respond quickly enough to a combination of emerging consumer trends, an increasingly competitive environment and a soft economy. But even in the face of flat sales, our Profit Improvement Program helped us substantially reduce costs and better direct investments to programs that deliver the highest returns. Most importantly, we introduced a new, comprehensive five-year strategic plan which positions Jack in the Box to grow from a regional quick-serve restaurant chain into a national restaurant company."
As planned, Jack in the Box opened 22 new company restaurants in the fourth quarter and 100 new restaurants for the year. The company's restaurant base increased 5.3 percent to 1,507 units compared with 1,431 at the end of fiscal 2001, with systemwide units at year end of 1,862 vs. 1,762 last year.
The one-time charges in the fourth quarter related to the closure of eight under-performing restaurants and the settlement of a class-action lawsuit. Restaurant closures, which resulted in a charge of $6.4 million, are expected to have a positive impact on operating earnings in the future. The company also expensed $9.3 million to settle the 2001 Bellmore class-action lawsuit, which alleged that company restaurant management personnel in California were not always paid overtime properly, a claim the company has denied.
Based on continuing declines in consumer confidence, expectations for ongoing economic challenges and related softness in sales since the beginning of its fiscal year, the company today estimated that for fiscal 2003 it would earn approximately $91 million vs. $98.6 million forecast previously. On the same basis, diluted earnings per share are now estimated at $2.42 compared with $2.46 in previous guidance. Same store sales for 2003 are estimated at a 1.5-2% increase compared with 3% forecast earlier.
First quarter 2003 guidance was revised as well. Earnings per share is now estimated at $0.63 per diluted share compared with $0.67 per share in first quarter 2002. Same store sales are expected to drop 1.5% compared with a 0.7% increase in first quarter 2002.
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