UPDATE 1-Jack in the Box to close 40 restaurants

Wed Sep 29, 2010 7:12am EDT

* Restaurants to be closed in southeast and Texas

* Sees related charges of $8.5-$9.5 mln in Q4

Sept 29 (Reuters) - Fast-food chain operator Jack in the Box (JACK.O) said it plans to close 40 company-owned underperforming restaurants across seven states.

The company plans to close the restaurants, located primarily in the southeast and Texas, before the end of its current fiscal year on Oct. 3.

Jack in the Box, which operates more than 2,200 system-wide restaurants in 18 states, expects pre-tax charges of about $8.5-$9.5 million and $21-$25 million in lease-related costs for the fourth quarter.

"These restaurant closures are expected to have a positive impact on our future earnings, cash flow and return on invested capital," Chief Executive Linda Lang said in a statement.

The company has been focussing on value offerings and promotions to boost sales, which were hurt by weak spending by its key customer demographics -- young men and minority groups -- due to high unemployment rates in the markets it operate.

Shares of the company, which have gained about 5 percent of its value since it reported its third-quarter results on Aug. 4, closed at $21.64 Tuesday on Nasdaq. (Reporting by Renju Jose in Bangalore; Editing by Maju Samuel)

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