McDonald’s All-Day Breakfast Is Hurting Jack in the Box
McDonald’s (MCD) decision to revive all-day breakfast in October is proving to be deadly to some of the restaurant chain’s competitors.
Jack in the Box (JACK) on Wednesday reported a smaller than expected quarterly profit and, without naming names, blamed McDonald’s for the shortfall in soft breakfast and lunch sales during the quarter ended Jan. 17.
“We believe a competitor’s messaging around its launch of all-day breakfast had some impact on our results, particularly in the 10:30 a.m. to noon period,” Jack in the Box said in its press release. “Jack in the Box sales in the last part of the quarter were lower than we anticipated as several competitors began promoting aggressive value offers.”
That competitor would be the Golden Arches themselves. The introduction in October of around-the-clock Egg McMuffins and hash browns helped Mickey D’s enjoy its best quarter in nearly four years, a welcome relief after two years of U.S. comparable sales declines. The stock last month hit a record high.
In contrast, Jack in the Box shares fell nearly 20% in after hours trading.
Late last month, the restaurant chain introduced several upgrades to its core menu, betting that an image for higher quality would help it fend off McDonald’s et al.
Jack in the Box, which also owns Qdoba, said revenue in the quarter came in at $470.8 million, below analysts’ forecasts for revenue of $475 million. Profit per share also missed expectations.