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Why Shares of Jack in the Box Soared on Thursday

By Daniel Sparks - Apr 16, 2020 at 3:36PM

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The fast-food chain's business held up better than expected amid the COVID-19 pandemic.

What happened

Shares of fast-food chain Jack in the Box (JACK 3.25%) soared on Thursday, rising as much as 21.6%. As of 3:05 EDT, however, the stock was up 19.2%.

The stock's gain follows a business update from the fast-food company after market close on Wednesday, showing preliminary results that may have been better than some investors were expecting in light of the weak economic environment.

A chart showing a stock price moving higher

Image source: Getty Images.

So what

The company said total same-store sales for its fiscal second quarter, which ended on April 12, are estimated to have declined 4.2% year over year. On average, analysts were expecting same-store sales in Jack in the Box's fiscal second quarter to decline 9.4%. 

For the seven-week period ending March 8 (the period before consumers began sheltering at home), same-store sales were up 5.2% year over year.

The company also importantly said that more than 99% of its restaurants remain open during the COVID-19 pandemic.

Now what

Looking ahead, the company opted to withdraw its 2020 guidance, citing the "unprecedented adverse impact of the COVID-19 pandemic on business results..." This is a common move for many companies during this time as businesses cope with uncertainty.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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