Jack in the Box (JACK) Tops Q2 EPS by 7c, Comps Fall 0.8%, Offers Guidance

Jack in the Box (NASDAQ: JACK) reported Q2 EPS of $0.98, $0.07 better than the analyst estimate of $0.91. Revenue for the quarter came in at $369.5 million versus the consensus estimate of $369.33 million.

Jack in the Box system same-store sales decreased 0.8 percent for the quarter and lagged the QSR sandwich segment by 1.5 percentage points for the comparable period, according to The NPD Group’s SalesTrack® Weekly for the 12-week time period ended April 16, 2017. Included in this segment are 16 of the top QSR sandwich and burger chains in the country. Company same-store sales decreased 2.4 percent in the second quarter driven by a 7.1 percent decrease in transactions, partially offset by average check growth of 4.7 percent.

Qdoba same-store sales decreased 3.2 percent system-wide and 5.9 percent for company restaurants in the second quarter. Company same-store sales reflected an 8.2 percent decrease in transactions, partially offset by growth in average check and catering sales.

GUIDANCE:

Jack in the Box sees FY2017 EPS of $4.10-$4.30, versus the consensus of $4.35.

• Same-store sales increase of approximately 1.0 percent at Jack in the Box system restaurants.
• Same-store sales decrease of approximately 1.0 to 2.0 percent at Qdoba company restaurants.
• Commodity costs of approximately flat for both Jack in the Box and Qdoba.
• Consolidated restaurant operating margin of approximately 19.0 percent, depending on the timing of refranchising transactions and the margins associated with the restaurants sold.
• SG&A as a percentage of revenues of approximately 11.0 percent as compared to 12.7 percent in fiscal 2016.
• Impairment and other charges as a percentage of revenues of approximately 70 basis points, excluding restructuring charges.
• Approximately 20 to 25 new Jack in the Box restaurants opening system-wide, the majority of which will be franchise locations.
• Approximately 50 to 60 new Qdoba restaurants, of which approximately 30 are expected to be company locations.
• Capital expenditures of approximately $100 million.
• Tax rate of approximately 38.0 to 39.0 percent.
• Operating earnings per share, which the company defines as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising, ranging from $4.10 to $4.30.

Third quarter fiscal year 2017 guidance

• Same-store sales of up 1.0 to down 1.0 percent at Jack in the Box system restaurants versus a 1.1 percent increase in same-store sales in the year-ago quarter.
• Same-store sales of up 1.0 to down 1.0 percent at Qdoba company restaurants versus a 1.0 percent increase in the year-ago quarter.

For earnings history and earnings-related data on Jack in the Box (JACK) click here.

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