News
Higher costs lead to Jack in the Box Q1 earnings drop
February 17, 2009
SAN DIEGO — Despite a slight rise in same-store sales at company-owned restaurants, Jack in the Box Inc. saw its net income fall about 23 percent for the first quarter ended Jan. 18, the company has announced. The company attributes the decline in earnings in part to an 8 percent increase in food and packaging costs and a 20 percent increase in beef costs.
Same-store sales at Jack in the Box company restaurants increased 1.7 percent in the first quarter, on top of a year-ago increase of 1.5 percent. Systemwide same-store sales at the company's fast casual brand Qdoba Mexican Grill decreased 1.1 percent in the first quarter versus a year-ago increase of 4.5 percent.
Company revenues for the quarter were $776.7 million, down 0.04 percent from $777 million in the same period last year.
Net income was $28 million, compared to $36.3 million for the first quarter last year.
Refranchising, reimaging initiatives
As previously announced, in September 2008 the company's board of directors approved plans to sell its Quick Stuff convenience stores. Jack in the Box also is moving forward with its refranchising efforts having sold 29 company-operated Jack in the Box restaurants to franchisees in the first quarter. Jack in the Box restaurants are now 39 percent franchised versus 34 percent a year ago.
Linda A. Lang, Jack in the Box chairman and chief executive officer, said that the company is on track to meet its goal of increasing its percentage of franchise ownership in the Jack in the Box system to 70 to 80 percent by the end of fiscal year 2013.
The company also is continuing its strategic initiative to reinvent the Jack in the Box brand, including its comprehensive restaurant re-imaging program. During the first quarter, eight company restaurants and 30 franchised locations were fully re-imaged, bringing to 924 — or 42.6 percent —the total number of restaurants in the system, including new construction, that feature all interior and exterior elements of the program, according to a news release.
Upcoming product launches include Mini Sirloin Burgers, featuring a trio of 100 percent sirloin patties topped with American cheese, grilled onions and ketchup, served on bakery-style buns.
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