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Jack in the Box Inc. Raises Second Quarter Earnings Guidance; Begins Testing Brand Reinvention at Two Remodeled Restaurants

SAN DIEGO--(BUSINESS WIRE)--April 1, 2004--Jack in the Box Inc. (NYSE:JBX), operator and franchisor of Jack in the Box(R) and Qdoba Mexican Grill(R) restaurants, today raised its earnings guidance for the second quarter ending April 11 and reported the opening of two restaurants in San Diego, where the company will test and evaluate elements of its three-to-five-year brand-reinvention initiative.

Jack in the Box now estimates that earnings per diluted share in the second quarter will be approximately 42 cents to 44 cents, compared with 28 cents previously forecast and 44 cents reported in the second quarter of fiscal 2003. The primary factors contributing to the higher estimate are as follows: a same-store sales increase estimated at approximately 7.5 percent for the second quarter, compared with the previous forecast of 4.0 to 4.5 percent; lower food costs resulting from a favorable shift in menu mix related to new product introductions; excellent control of labor costs; improved leverage on fixed operating costs; and a decrease in the estimated annual income tax rate from 38 percent to 37 percent.

"Initial response to our new Pannido(TM) line of gourmet sandwiches is strong and is driving same-store sales above our initial projections," said Robert J. Nugent, chairman and chief executive officer. "With the recent opening of our new Innovation Center, we will be further improving our menu with relevant, high-quality products, as well as developing equipment and processes to more efficiently deliver those menu items in our restaurants.

"While we are extremely excited about our second-quarter same-store sales performance, we recognize that we will be facing tougher comparisons for the balance of the year."

Additionally, the company said that its capital expenditures for the second quarter will be approximately $22 million to $24 million versus approximately $29 million originally forecast, due to the previously announced decision to open fewer Qdoba company restaurants, as well as to cost savings on new Jack in the Box restaurants.

Consistent with its usual practice, the company will provide earnings guidance for the third quarter and fiscal year when it reports second-quarter earnings results on May 12.

Nugent also said that, in March, Jack in the Box opened two completely remodeled restaurants in San Diego where the company is testing elements of its brand-reinvention initiative. These restaurants feature exterior and interior designs entirely different from any other Jack in the Box or QSR facility. Both locations offer a significantly upgraded menu and higher level of guest service, which is consistent with the company's strategy of providing a dining experience that meets the higher expectations of today's consumers.

"The two new locations have attracted much attention in their immediate communities, and the reaction of our guests has been very positive," Nugent said. "Based on our learnings, we plan to expand the test of brand reinvention in two markets by fiscal-year end, and will carefully evaluate the results through a variety of consumer and financial measures prior to system rollout."

Jack in the Box Inc. (NYSE:JBX) operates and franchises two restaurant chains, Jack in the Box(R) and Qdoba Mexican Grill(R), in 32 states combined. Jack in the Box is the nation's first major drive-thru hamburger chain, with more than 1,950 restaurants, and Qdoba Mexican Grill is an emerging leader in fast-casual dining, with more than 130 restaurants. With headquarters in San Diego, Jack in the Box Inc. has more than 45,000 employees.

Safe Harbor Statement

This news release contains forward-looking statements about, among other items, the company's projected earnings, sales, food costs, expenses, new products, menu improvements, guest service, brand strategies, market tests, and income tax rates. These forward-looking statements reflect management's current expectations regarding future events and are subject to risks and uncertainties.

The following are some of the factors that could cause the company's actual results to differ materially from those expressed in the forward-looking statements: the company's ability to achieve the goals of its brand reinvention; the impact of competitive response, including pricing, competitor marketing and operational initiatives and new products introduced by competitors; the availability and cost of food ingredients, labor, and utilities; increases in expenses related to pension liabilities, workers' compensation and other insurance; the success of the company's new products and the effect of product deletions; delays in the opening of restaurants; adverse regional weather conditions and business, economic and other local or national conditions or events which affect consumer confidence and spending patterns; the effects of war and terrorist activities; consumer concerns about fast food in general or the company's products specifically; the effect of publicity regarding the company or the restaurant industry in general; changes in government regulations; changes in accounting standards, policies and practices; changes in effective tax rates; potential variances between estimated and actual liabilities; effects of legal claims; the possibility of unforeseen events affecting the industry in general; and other risk factors listed from time to time in the company's reports filed with the Securities and Exchange Commission. Statements about the company's past performance are not necessarily indicative of its future results. The information in this press release is as of April 1, 2004. The company undertakes no obligation to update or revise any forward-looking statement, whether as the result of new information, future events or otherwise.

    CONTACT: Jack in the Box Inc.
             Brian Luscomb, 858-571-2229

    SOURCE: Jack in the Box Inc.