Restaurants stew over tax- refund delay

Jack in the Box Inc. saw sales abruptly turn negative this month, and the slowdown may be partly because of delayed federal income tax refunds, Chief Executive Officer Lenny Comma said Wednesday.

Cracker Barrel Old Country Store Inc. and Red Robin Gourmet Burgers Inc. also have cited anxiety over the tax refunds for weak demand.

The worries stem from legislation passed in 2015 that was aimed at preventing fraud but which also may postpone funds remitted to 25 million to 30 million U. S. households this year. All told, the income tax delay may crimp consumer spending by as much as $ 21 billion in February, Goldman Sachs said earlier this month.

“They all seem to be anxious about different things, whether it is increasing health care cost, the potential for increasing health care cost, the timing of tax refunds, the size of the tax refunds,” Cracker Barrel Chief Executive Officer Sandra Cochran said on a conference call Tuesday after the chain lowered its sales guidance for the year.

At Jack in the Box, same- store sales may fall as much as 2 percent in the current quarter, while sales at its Qdoba chain may drop as much as 3 percent. The company’s stock fell 6.90 points, or 6.66 percent, to close Thursday at $ 96.70.

Red Robin also has struggled to attract customers lately. Same- store sales plummeted 4.3 percent in the most recent quarter.

“February has certainly been challenging for the industry,” Chief Financial Officer Guy Constant said earlier this week. “The lateness of the income tax refund has certainly had a contributing impact to that.” — Bloomberg News