Jack In The Box Profit Up

Reuters:

Hamburger chain Jack in the Box Inc. on Tuesday posted a better-than-expected 16% gain in quarterly profit and raised its earnings forecast for the full year, as its shares climbed more than 7%.

Net income for the 3rd quarter that ended July 9 rose to $27.8 million, or 77 cents per share, from $23.9 million, or 66 cents per share, a year earlier.

Wall Street analysts had expected earnings of between 66 cents and 68 cents per share, with an average view of 67 cents, according to Reuters Estimates.

Sales at Jack in the Box company restaurants open at least a year increased 2.9% in the 3rd quarter, while system same-store sales at Qdoba rose 6%. The company also said it had agreed to sell its 25 company-operated Jack in the Box restaurants in Hawaii to a new franchise operator, Chris Scanlan, president of Scanlan Management, LLC. The deal is expected to close late in the fourth quarter. ‘The pending sale of our company restaurants in Hawaii underscores the progress we’re making in our strategic initiative to increase franchising,’ Linda Lang, chairman and chief executive officer, said in a statement. ‘Franchising will help expand the Jack in the Box brand in new and existing markets, and can generate higher returns and margins for the company.’

Outlook
The sale is expected to boost earnings by about 20 to 24 cents per share, the company said, without giving a time frame.

Additionally, the company raised its earnings guidance for fiscal 2006, saying it expects earnings of $2.72 to $2.74 per share, up from its earlier $2.60 to $2.63 per-share forecast. Continued…