News

Jack in the Box reports Q4 profit, beats expectations

November 21, 2011

Jack in the Box Inc. reported net earnings of $22.7 million, or $0.49 per diluted share, for the fourth quarter ended Oct. 2, 2011, compared with net earnings of $4.0 million, or $0.07 per diluted share, for Q4 of fiscal 2010.

Same-store sales at Jack in the box company restaurants increased 3.1 percent.

Qdoba. which is owned by Jack in the Box, reported that its same-store sales in Q4 were up 3.7 percent system-wide, representing the third consecutive quarter that two-year cumulative same-store sales have been greater than 9 percent.

Fiscal 2011 net earnings totaled $80.6 million, or $1.61 per diluted share, compared with net earnings of $70.2 million, or $1.26 per diluted share, in fiscal 2010.

Operating earnings per share were approximately $0.19 per diluted share in the fourth quarter of 2011. For fiscal year 2011, operating earnings per share were approximately $0.83 compared with approximately $0.61 last year.

"Jack in the Box company same-store sales increased 5.8 percent in the fourth quarter, ahead of our expectations, as sales and traffic accelerated in the last two months of the quarter," said Linda A. Lang, chairman, CEO and president. "On a two-year cumulative basis, this represented our fifth consecutive quarter of sequentially improving company same-store sales trends. We believe these results have been largely driven by the investments we have made to enhance the entire guest experience at the Jack in the Box brand."

The fourth quarter and fiscal year ended Oct. 2, 2011, included 12 weeks and 52 weeks, respectively, as compared to 13 weeks and 53 weeks in the fourth quarter and fiscal year ended Oct.3, 2010, respectively. The company estimates that the extra week benefited diluted earnings per share by approximately $0.03 in both the fourth quarter and fiscal 2010.

Restaurant openings

The company has sold 332 restaurants in fiscal 2011, bringing the Jack in the Box system to 72-percent franchised.

"We've achieved our original goal of increasing the percentage of franchise ownership to 70 to 80 percent two years ahead of plan," Lang said. "Over the last six years, we have refranchised more than 1,000 restaurants and expect to refranchise 150 to 200 restaurants over the next couple of years, which will bring our Jack in the Box franchise ownership to approximately 80 percent of the system."

Ten new Jack in the Box restaurants opened in Q4, including six franchised locations, compared with 14 new restaurants opened system-wide during the same quarter last year, of which two were franchised. For the full year, 31 new Jack in the Box restaurants opened, including 16 franchised locations, compared with 46 new restaurants in fiscal 2010, 16 of which were franchised.

In the fourth quarter, 20 Qdoba restaurants opened, including 12 franchised locations, versus 13 new restaurants in the year-ago quarter, of which six were franchised. For the full year, 67 Qdoba restaurants opened, including 42 franchised locations, compared with 36 new restaurants in fiscal 2010, 21 of which were franchised.

At Oct. 2, 2011, the company's system total comprised 2,221 Jack in the Box restaurants, including 1,592 franchised locations, and 583 Qdoba restaurants, including 338 franchised locations.

Guidance

First quarter fiscal year 2012 guidance

Same-store sales are expected to increase approximately 4 to 5 percent at Jack in the Box company restaurants versus a 1.5 percent increase in the year-ago quarter.
Same-store sales are expected to increase approximately 2 to 3 percent at Qdoba system restaurants versus a 6.4 percent increase in the year-ago quarter.

Fiscal year 2012 guidance

Same-store sales are expected to increase approximately 2 to 4 percent at Jack in the Box company restaurants.
Same-store sales are expected to increase approximately 3 to 5 percent at Qdoba system restaurants.
Overall commodity costs are expected to increase by approximately 5 percent for the full year, with higher inflation in the first half of the fiscal year.
Restaurant operating margin for the full year is expected to be in the mid-13 percent range, depending on same-store sales and commodity inflation. 25 to 30 new Jack in the Box restaurants are expected to open, including approximately 15 company locations.
70 to 90 new Qdoba restaurants are expected to open, of which approximately half are expected to be company locations.