Earnings Highlights and Review: Jack in the Box’s Operating Earnings Grew 7%; Authorized Additional Buyback Program

Research Desk Line-up: Fiesta Restaurant Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 5, 2017 / Pro-Trader Daily publishes post-earnings coverage on Jack in the Box Inc. (NASDAQ: JACK) following the Company’s disclosure of its second quarter fiscal 2017 financial results on May 16, 2017. The burger chain’s revenue and earnings surpassed estimates and the Company also announced dividend and outlook for the upcoming quarter and fiscal year. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Get more of our free earnings reports coverage from other constituents of the Restaurants industry. Pro-TD has currently selected Fiesta Restaurant Group, Inc. (NASDAQ: FRGI) for due-diligence and potential coverage as the Company reported on May 08, 2017, its financial results for Q1 2017 which ended on April 02, 2017. Register for a free membership today, and be among the early birds that get access to our report on Fiesta Restaurant when we publish it.

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Earnings Reviewed

For the second quarter ended April 16, 2017, Jack in the Box posted revenue of $369.39 million compared to revenue of $361.15 million in Q2 FY16. Revenue numbers for the reported quarter surpassed analysts’ consensus estimates of $368.8 million.

For Q2 FY17, Jack in the Box reported earnings from continuing operations of $33.8 million, or $1.09 per diluted share, compared with $29.0 million, or $0.85 per diluted share, for Q2 FY16. The Company’s operating earnings per share were $0.98 in the reported quarter compared with $0.85 in the prior year’s same quarter. Jack in the Box’s earnings numbers exceeded Wall Street’s expectations of $0.91 per share

Margins

During Q2 FY17, Jack in the Box system same-store sales decreased 0.8% and lagged behind the QSR sandwich segment by 1.5% for the comparable period, according to The NPD Group’s SalesTrack® Weekly for the 12-week time period ended April 16, 2017. The Company’s same-store sales decreased 2.4% for the reported quarter driven by a 7.1% decrease in transactions, partially offset by average check growth of 4.7%.

For Q2 FY17, Jack in the Box’ Qdoba same-store sales decreased 3.2% system-wide and 5.9% for Company restaurants. Company same-store sales reflected an 8.2% drop in transactions, partially offset by growth in average check and catering sales.

Jack in the Box’s consolidated restaurant operating margin, decreased by 240 basis points to 17.5% in Q2 FY17 compared with 19.9% of sales in Q2 FY16. Restaurant operating margin for Jack in the Box company restaurants decreased 100 basis points to 19.7% of sales. The decrease was due primarily to higher labor costs related to wage inflation, higher repairs and maintenance costs, and sales deleverage, which were partially offset by a decrease in food and packaging costs.

Restaurant operating margin for Qdoba company restaurants decreased 480 basis points to 13.5% of sales. The decrease was due primarily to sales deleverage, the impact of new restaurant openings over the last 12 months, an increase in food and packaging costs and the impact of wage inflation.

For Q2 FY17, Jack in the Box’s franchise margin as a percentage of total franchise revenues improved to 54.4% compared to 53.8% in Q2 FY16. The improvement was due primarily to higher franchise fees related to the sale of 60 Company-operated Jack in the Box restaurants to franchisees in the reported quarter, lower depreciation, and a decrease in franchise support and other costs.

Capital Allocation

During Q2 FY17, Jack in the Box repurchased approximately 2,229,000 shares of its common stock at an average price of $98.27 per share for an aggregate cost of $219.0 million.

On May 11, 2017, Jack in the Box’s Board of Directors authorized an additional $100.0 million stock buyback program. This leaves approximately $181.0 million remaining under the stock buyback programs authorized by the company’s Board of Directors that expires in November 2018.

In the earnings release, Jack in the Box also announced that on May 11, 2017, its Board of Directors declared a quarterly cash dividend of $0.40 per share on the Company’s common stock. The dividend is payable on June 12, 2017, to shareholders of record at the close of business on May 30, 2017.

Guidance

For Q3 FY17, Jack in the Box is forecasting same-store sales of up 1.0% to down 1.0% at its system restaurants versus a 1.1% increase in same-store sales in the year-ago same quarter. The Company is estimating same-store sales of up 1.0% to down 1.0% at Qdoba Company restaurants versus a 1.0% gain in Q3 FY16.

For FY17, Jack in the Box is estimating same-store sales increase of approximately 1.0% at its system restaurants and same-store sales decrease of approximately 1.0$ to 2.0% at Qdoba Company restaurants.

Jack in the Box is forecasting consolidated restaurant operating margin of approximately 19.0%, depending on the timing of refranchising transactions and the margins associated with the restaurants sold.

The Company is expected to open approximately 20 to 25 new Jack in the Box restaurants opening system-wide, the majority of which will be franchise locations and approximately 50 to 60 new Qdoba restaurants, of which approximately 30 are expected to be Company locations.

For FY17, Jack in the Box is forecasting operating earnings per share, on a GAAP basis excluding restructuring charges and gains or losses from refranchising, ranging from $4.10 to $4.30.

Stock Performance

On Friday, June 02, 2017, the stock closed the trading session at $108.46, rising 1.50% from its previous closing price of $106.86. A total volume of 1.22 million shares have exchanged hands, which was higher than the 3-month average volume of 783.81 thousand shares. Jack in the Box’s stock price surged 13.55% in the last three months, 4.27% in the past six months, and 25.31% in the previous twelve months. The stock is trading at a PE ratio of 26.19 and has a dividend yield of 1.48%. At Friday’s closing price, the stock’s net capitalization stands at $3.14 billion.

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