What happened

Shares of Jack in the Box (JACK -4.34%) were tumbling today after the fast-food chain offered disappointing guidance for the next year in its fiscal fourth-quarter earnings report.

As a result, the stock was down 15.2% as of 11:20 a.m. ET.

So what

Jack in the Box's fourth-quarter results were actually in line with expectations. Same-store sales at Jack in the Box restaurants rose 4% in the quarter and were up 5.2% at Del Taco. Revenue jumped 44.6% to $402.8 million, due primarily to the acquisition of Del Taco earlier this year. That beat estimates at $392.7 million.

On the bottom line, costs increased as the company took on more company-operated stores in the Del Taco acquisition, and adjusted earnings per share fell from $1.73 to $1.33, which was slightly below estimates at $1.36.

CEO Darin Harris said: "I am very pleased with the momentum of our top-line performance to close 2022, which we have seen continue into the first several weeks of Q1, and the consistency we showed throughout the year in driving sales and improving traffic, as we continue to remain careful on the price we are taking to maintain a consistent value equation for our guests."

Now what

Despite results that were in line with estimates, management sees inflation weighing on performance in fiscal 2023, predicting an increase in commodity costs of 9% to 11% and a wage rate increase of 3% to 6%. It also called for just low-single-digit increases in same-store sales at both chains, indicating that it will have trouble offsetting those cost increases. 

As a result, the company expects earnings per share of $5.25 to $5.65 for fiscal 2023, which was below the consensus at $6.59. Based on that disparity, it's easy to see why the restaurant stock is down today.