Jack in the Box Inc., operator and franchiser of Jack in the Box® restaurants, today reported that same-store sales for the most recent four-week period ended September 2 improved 4.3 percent compared to last year. Additionally, due to a subsequent decline in sales following the September 11 terrorist attack and to growing concerns about economic uncertainty, the company has lowered its fourth-quarter earnings estimate and its fiscal year 2002 earnings expectations.

Fiscal 2001

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The company now expects its fourth-quarter earnings per share (EPS) to be approximately 49 cents instead of the 53-57 cents range estimated previously. Same-store sales for the quarter are now estimated to grow about 3.3 percent vs. the fourth quarter of last year.

Fiscal 2001 EPS is now estimated at $2.10 vs. $2.16 in the prior forecast, the company reported.

CEO Robert J. Nugent said, “The tragic events of September 11, coupled with extended economic uncertainty, resulted in approximately flat same-store sales in the final month of the quarter. We believe that this environment, which includes ongoing pressure from rising utility, minimum wage and occupancy costs, will continue into fiscal 2002, which begins October 1.

“Despite the challenges we faced, I commend the dedication of our employees who continued opening new restaurants; improving operations, which included reducing speed-of-service by 30 seconds; managing SG&A and other costs; further developing the brand in our new markets and launching new systems to support the company overall.

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“Finally, we at Jack in the Box believe it is important to remember the victims of the September 11 tragedy, and for all of us have sustained confidence that the American people will prevail together. Our employees are donating funds to help support the victims and their families, and the company is contributing $100,000 from the Jack in the Box Foundation to this cause.”

The major assumptions on which the fourth quarter and fiscal 2001 estimates are based are as follows:

Fourth Quarter, 2001


  • Jack in the Box opened 40 new restaurants in the fourth quarter compared with 31 new units last year.
  • At year-end, the company had 1,431 company restaurants and 331 franchised units for a total of 1,762 Jack in the Box restaurants systemwide, an increase of 8 percent vs. prior year.
  • Same-store sales are expected to increase approximately 3.3 percent in the fourth quarter compared with last year and 4 percent for the full year. Through the third quarter, same-store sales were 4.3 percent higher year-over-year.
  • Total revenues are estimated at approximately $439 million for the quarter, an 11 percent improvement compared with last year’s fourth quarter, and will be approximately $1.83 billion for the year, up 12 percent over fiscal 2000.
  • Gross profit rate is estimated at approximately 18.7 percent compared with 20.4 percent last year, due to higher costs for utilities, food, labor and occupancy.
  • SG&A expense rate is estimated at approximately 10.7 percent, or .3 point lower than a year ago, primarily resulting from continued leverage on corporate overhead.
  • Earnings before interest and taxes (EBIT) are estimated at approximately $35.4 million vs. $37.2 million in fiscal 2000.
  • Net income is estimated at approximately $19.5 million vs. $20.1 million last year, before an unusual income tax item of $22.9 million in fiscal 2000.
  • EPS is estimated at approximately 49 cents, compared with 51 cents last year before an unusual tax item in fiscal 2000.

Fiscal 2001


  • Gross profit rate is estimated at approximately 19.4 percent vs. 20.3 percent last year, largely due to higher utility costs; higher occupancy costs; and higher labor costs due to minimum wage increases, which were partially offset by lower food costs.
  • SG&A expense rate is estimated at approximately 11 percent vs. 11.2 percent last year, due largely to continued leverage of corporate overhead.
  • EBIT is estimated at approximately $154.5 million, up 4 percent from last year.
  • Interest expense rate is estimated at approximately 1.3 percent compared with 1.6 percent last year, largely due to lower borrowing rates and slightly lower borrowing balances throughout the year.
  • Income tax rate is estimated at approximately 35.5 percent vs. 37 percent last year, due to one-time tax credits received in fiscal 2001.
  • Net income is estimated to increase 8 percent to approximately $83.8 million vs. $77.4 million last year, before an unusual tax item of $22.9 million in fiscal 2000.
  • EPS is estimated to increase approximately 7 percent to $2.10 vs. $1.97 last year, before an unusual tax item in fiscal 2000.
  • EBITDA is estimated at approximately $219 million, up 7 percent from last year’s $205.2 million.
  • Capital expenditures are estimated at approximately $170 million compared with $130 million in FY 2000.

Fiscal 2002

Due to increased economic uncertainty and reduced levels of consumer confidence, the company announced that it is adopting a more conservative business plan for fiscal 2002, and is lowering its estimated earnings growth rate to 5 percent, resulting in an EPS estimate of $2.18.

“We remain committed to growing our business in a responsible way,” Nugent noted. “Our basic strategies — to continue improving the restaurant experience in current restaurants while growing our number of units — are unchanged. To reach our long-term goals of becoming a national chain and building shareholder value, however, we must manage our business prudently in the current economic environment.

“To that end, we plan to conserve capital in fiscal 2002 and protect our earnings stream by modestly reducing new restaurant growth and focusing on improvement initiatives for existing restaurants. These include food quality and safety enhancements, new product development, new systems, speed of service improvements, brand-strengthening advertising for new markets, and refurbishing existing restaurants. These programs will help ensure that our current restaurants and new units deliver a consistent restaurant experience and communicate the same brand message to our customers. Our customers remain first in our minds even during these difficult and challenging economic times.

“And, though we are adopting this more conservative plan in fiscal 2002, we will also actively explore alternative growth opportunities to better position the company for the future,” Nugent said.

The major assumptions upon which fiscal 2002 estimates are based include the following:


  • The company estimates that it will add approximately 100 new company restaurants, compared with its original plan of 126, bringing the total number of company-operated units to approximately 1,524, up 6 percent over fiscal 2001.
  • The company expects to have a year-end systemwide count of approximately 1,862 restaurants, a 6 percent increase over 1,762 units at the end of fiscal 2001.
  • Same-store sales are estimated to grow approximately 2.7 percent on top of a 4 percent increase in fiscal 2001, due to expectations of continued challenging economic conditions and lower consumer confidence.
  • Total revenues are estimated to increase approximately 10 percent from fiscal 2001 to approximately $2 billion.
  • Gross profit rate is estimated to be approximately 19.2 percent vs. 19.4 percent in fiscal 2001, reflecting continued increases in utilities and occupancy costs, as well as labor from higher minimum wage costs, partially offset by slightly lower food costs.
  • SG&A expense rate is estimated to be approximately flat at 11 percent, reflecting higher costs for pension and insurance programs, offset by leverage in payroll and travel expense.
  • EBIT is estimated approximately 7 percent higher at $165.4 million vs. $154.5 million in fiscal 2001.
  • Interest expense rate is estimated at approximately 1.2 percent vs. 1.3 percent in fiscal 2001 related to lower borrowing rates and lower balances throughout the year.
  • Income tax rate is estimated at 38 percent vs. 35.5 percent in fiscal 2001, owing to one-time tax credits received last year.
  • Net income is estimated to grow 5 percent to approximately $87.8 million vs. $83.8 million in fiscal 2001.
  • Weighted average shares outstanding in fiscal 2002 are expected to increase approximately 1 percent to 40.3 million.
  • EPS is estimated to grow 4 percent to approximately $2.18 vs. $2.10 in fiscal 2001.
  • EBITDA is estimated to increase approximately 6 percent from fiscal 2001 to approximately $231 million.
  • Capital expenditures are estimated at approximately $140 million vs. $170 million in fiscal 2001.

Founded in 1951, Jack in the Box is the nation’s first major drive-thru hamburger chain. The San Diego-based company operates or franchises more than 1,700 quick-serve restaurants in 16 states, and has approximately 43,000 employees. For additional financial information, visit the “Investors” section on the company’s Web site, www.jackinthebox.com.

This news release contains forward-looking statements including estimates of sales and earnings, which are subject to risks and uncertainties. Among the factors that could cause actual results to differ materially from expectations are: shortages or cost increases of ingredients, consumer concern regarding the safety of beef or other foods, utility price increases and power outages, delays in opening new stores, changes in, or instability of national and local business and economic conditions, legislation and governmental regulation, changes in accounting policies and practices, and the possibility of unforeseen events affecting the industry generally. The foregoing list of important factors is not exclusive. Material risks affecting the company’s business, as well as more comprehensive information relating to its operations, are detailed in company documents on file with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as the result of new information, future events or otherwise.