Jack in the Box CEO: Starting to notice softer sales from consumer uncertainty

 
Feb. 22, 2013

Jack in the Box Inc., parent company of Jack in the Box and Qdoba brands, reported earnings from its first quarter 2013, ended Jan. 20.

Company-owned Jack in the Box restaurants generated a same-store sales increase of 2.1 percent during the quarter, compared to 5.3 percent in Q1 2012. Franchised restaurants were up 1.8 percent for a systemwide average of 1.9 percent. Systemwide same-store sales were up 3.6 percent during the same period last year.

Despite having lower comps, Linda A. Lang, chairman and CEO, said the chain's growth during the quarter exceeded that of the QSR sandwich segment during Q1. This is according to the NPD Group's SalesTrack Weekly for the 16-week time period ended Jan. 20, 2013. Included in this segment are the top 15 sandwich and QSR burger chain competitors. Lang also predicts momentum to slow a bit for the next reported quarter.

"Numerous companies in both the restaurant and retail space have reported some weakening in sales in the last part of January and first half of February which has been attributed to higher payroll taxes, delayed tax refunds and the rapid increase in gas prices over the last month. Our sales guidance for the second quarter reflects the softness we've seen thus far in the quarter and the uncertainty surrounding consumer spending," Lang said.

Qdoba's performance

Qdoba's company restaurants experienced a 1.5 percent increase in same-store sales, compared to 3.5 percent for Q1 2012. Franchised same-store sales increased 0.5 percent for a systemwide average of 1 percent, compared to 3.8 percent last year.

"Qdoba same-store sales in the first quarter increased 1.5 percent for company restaurants, driven by transaction and catering growth. One of our key priorities for 2013 is to drive traffic at Qdoba, and we believe our promotional efforts aimed at differentiating the brand resulted in the improvement in traffic and sales trends," Lang said.

By the numbers

During Q1 2013, nine new Jack in the Box restaurants opened, including six franchised locations, compared with 16 new restaurants opened systemwide during the same quarter last year, of which 11 were franchised.

In the first quarter, 17 Qdoba restaurants opened, including 14 franchised locations, versus 15 new restaurants in the year-ago quarter, of which nine were franchised. The company also acquired six Qdoba restaurants from franchisees in the quarter.

The company expects same-store sales to increase approximately 1.5 to 2.5 percent at Jack in the Box company restaurants for Fiscal 2013, and 1 to 2 percent at Qdoba company restaurants.

Additionally, overall commodity costs are expected to increase by approximately 2 to 3 percent for the full year.

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