Jack in the Box stock plummets

All-day breakfast by McDonald's partially blamed

The old Jack in the Box at 2959 Upas Street
  • The old Jack in the Box at 2959 Upas Street

Stock of San Diego fast-food chain Jack in the Box plunged more than 19 percent in after-hours trading today (February 17). The company missed Wall Street's quarterly revenue and earnings-per-share expectations, and also gave a weak forecast for the full year. (At 6:30 p.m. West Coast time, it was down 19.3 percent.)

For its first quarter ended January 17, the company reported earnings of 93 cents a share. The average estimate of ten analysts surveyed by Zacks Investment Research was for $1.03 a share. Revenue for the quarter was $470.8 million. Analysts had expected $475.4 million.

Jack blamed its weak results partly on "aggressive value offers" of competing chains and the launch of the all-day breakfast by McDonald's. Jack looks for full-year earnings of $3.50 to $3.63 a share. Analysts have been expecting $3.63.

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I tried Jack's breakfast sandwich and it was just plain awful. Mac 'n Don's is much better. Maybe the brains at Jack's should go try breakfast elsewhere.

AlexClarke: Usually Jack beats the other fast food chains in creative items. Maybe the company goofed on the breakfast sandwich. Best, Don Bauder

Shareholders are quick to punish companies who fall even slightly short of their quarterly estimates as volatility grips the equities markets.

McDonald's has been asleep at the wheel for long time. They should have taken a hint about serving breakfast past 10:30 a.m by watching Michael Douglas in the 1993 movie, Falling Down.

Ponzi: Yes, the volatility is worrisome. The market soars up, then plops down. This can be a prelude to economic headwinds and/or a bear market. It doesn't have to happen, though. The market has been pretty good in the last couple of weeks. Best, Don Bauder

It seems a stretch for this attempt of McDonald's to have breakfast all day to have caused this grief at JIB. But the financial pundits seem to think it was the reason. After all the belly-aching by McDonald's franchise holders of the disruption of having to cook breakfast alongside the burgers, I'm surprised. But it looks like Mickey is doubling down on all-day breakfast. And after all their false starts at selling upscale burgers, maybe this makes sense. If they won't buy a $5+ burger from you, sell them sausage, eggs and oj. JIB keeps experimenting with fancy burgers, and may actually have come up with a few that stay popular. Now their challenge is to get the creations more profitable.

Visduh: JACK officials put some of the blame on McDonald's all-day breakfast. Wall Street may or may not be buying this explanation. I have thought for some time that JACK has creative products, while McDonald's, Burger King, Wendy's et al have pretty bland and in some cases repulsive fare. Best, Don Bauder

Couldn't happen to a worse health-hazard.

Flapper: I hope this doesn't reflect my hometown refereeing, but I have always thought JACK had better food than the biggies -- McD's, BK, Wendy's, ad nauseam. I also think Arby's and Carl's Jr. are a cut or two above the big ones. Best, Don Bauder

May be. Certainly McDonalds has to be among the worst. I don't eat at any of them if I can help it, but some poor sons-a-beeches don't have a choice. Certainly there must be a better way . . .

Flapper: Some call it pink slime. Within the last 5 or 6 years, exigencies forced my wife and me to eat at Wendy's and McDonald's. Yes, it is pink slime. Best, Don Bauder

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