Rising energy and food prices, falling home prices and a weakening job market are taking a toll on consumers. Jack in the Box which is concentrated in California and Nevada, two states hit hard by the housing slump, is particularly vulnerable to a slowdown in consumer spending.
Jack in The Box is heavily exposed to rising costs for agricultural commodities such as dairy, beef, eggs, cheese and wheat. The company has been unsuccessful in its attempts to offset these rising costs; in the latest quarter the company posted a 2.9% drop in earnings on higher prices for cheese and eggs blunted lower labor costs.