News

Jack in the Box, Qdoba post Q3 bounces

August 4, 2016

Jack in the Box got a lift in its third-quarter earnings, according to the company which reported Wednesday that earnings hit $30.8 million or 93 cents per diluted share for the period ending July 3. That number is up from the same period last year when earnings were 28.4 million or 75 cents a share.

Operating earnings per share, a non-GAAP measure, were $1.07 in the fiscal quarter that just ended, compared with 76 cents in the prior-year quarter.

"Operating earnings per share for the third quarter exceeded our expectations, and resulted primarily from healthy margins combined with proceeds from a legal settlement, mark(et)-to-market adjustments and a lower tax rate," Chairman and CEO Lenny Comma, said in a company press release. "We were particularly pleased that Jack in the Box system same-store sales closed the gap as compared to the industry, with results steadily improving throughout the quarter. We also began implementing our G&A cost reduction plans, and are happy with the progress that has been made thus far.”

This fiscal year, the company worked to cut general and administrative costs after an organizational structure review identified savings from workforce reductions, relocation and consolidation of the Qdoba corporate support center, refranchising initiatives, and information technology synergies across both brands, according to the earning's report.

During the third quarter, those restructuring activities resulted in $7.7 million in charges, or about 15 cents a diluted share. Those charges mostly consist of employee severance pay and facility closing costs and total $10.5 million. 

Although Jack in the Box system same-store sales lagged the overall QSR sandwich segment, its sales increased 1.1 percent for the quarter. 
Qdoba Mexican Grill, owned by Jack in the Box,  saw same-store sales increases of 0.6 percent system-wide, reflecting a 0.4-percent increase in transactions and growing catering sales.

Both Jack in the Box and Qdoba are expected to see 1-to-2 percent comparable restaurant sales growth in the current quarter, according to the report, and the company will pay a quarterly  cash dividend of 30 cents per share on common stock for all shareholders of record on Aug. 16, to be paid on Aug. 29. 

The chain will open 20 Jack in the Box restaurants and up to 60 Qdoba units before the end of the fiscal year.