Yahoo Finance Jack in the Box (JACK) Q2 Earnings Top Estimates, Revenues Lag
Jack in the Box Inc. JACK reported mixed second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line declined from the prior-year quarter’s levels.
Earnings & Revenues Details
During the fiscal second quarter, operating earnings per share (EPS) came in at $1.46 per share, beating the Zacks Consensus Estimate of $1.43. The metric dropped 0.7% from $1.47 reported in the prior-year quarter.
Quarterly revenues of $365.3 million missed the consensus mark of $370 million by 1.2%. The top line declined 7.7% on a year-over-year basis. The downside was caused by Del Taco’s refranchising efforts.
Franchise rental revenues increased 2.8% year over year to $85.8 million. Franchise royalties and other revenues increased 2% year over year to $55.1 million. This figure compares with our projection of $52.7 million.
Franchise contributions to advertising and other services revenues rose 3.1% year over year to $57.3 million. This figure compares to our projection of $54.6 million.
Company restaurant sales during the quarter came in at $167.1 million (compared with $202.6 million reported in the prior-year quarter). This figure compares to our projection of $176.2 million.
Comps Discussion
In the quarter under review, comps at Jack in the Box’s stores fell 0.6% year over year against 10.6% growth reported in the prior-year quarter.
Same-store sales at franchised stores declined 2.6% year over year against growth of 9.4% reported in the prior-year quarter.
Systemwide same-store sales fell 2.5% year over year against 9.5% growth reported in the year-ago quarter. Reduced transactions, an unfavorable mix shift and a delay in the Smashed Jack launch caused the downside.
Del Taco Performance
During second-quarter fiscal 2024, same-store sales moved down 1.4% year over year, comprising franchise same-store sales fall of 1.1% and company-operated same-store sales decline of 1.8%.
Operating Highlights
During the fiscal second quarter, the total restaurant-level adjusted margin came in at 20.8% compared with 19.2% reported in the prior-year quarter. Additional company-owned restaurants and commodity deflation drove the upside.
Food and packaging costs (as a percentage of company restaurant sales) fell 180 basis points (bps) year over year to 27.5%.
The total franchise level margin was 39.2% in the fiscal second quarter compared with 40.9% reported in the prior-year quarter.
During the quarter, selling, general and administrative expenses accounted for 10.3% of total revenues. Our estimate for the metric was 10.2%.
Balance Sheet
As of Apr 14, 2024, cash totaled $20.2 million compared with $157.7 million as of Oct 1, 2023. Inventories during the quarter came in at $4.1 million compared with $4.4 million reported in the previous quarter. Long-term debt (net of current maturities) totaled $1.71 billion as of Apr 14, 2024, compared with $1.72 billion at the end of Oct 1, 2023.
In the fiscal second quarter, the company repurchased 0.2 million shares for an aggregate cost of $15 million. As of Apr 14, 2024, the management stated the availability of $210 million under its share repurchase program.
The company declared a cash dividend of 44 cents per share. The dividend will be paid out on Jun 25, 2024, to shareholders on record as of Jun 6, 2024.
Fiscal 2024 Outlook
For the fiscal 2024, the company anticipates Adjusted EBITDA to be in the range of $325-$330 million. Depreciation and Amortization expenses are anticipated between $60 million and $62 million.
Jack in the Box Restaurant Level Margin is expected to be in the range of 22-23%. The company expects Same Store sales for Jack in the Box and Del Taco to be in the flat-to-low single digits.
Company-wide operating EPS for fiscal 2024 are expected to be in the range of $6.25-$6.40.
Zacks Rank
Jack in the Box currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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