News

Jack in the Box sees Q3 financial value in 'bundled value' promos

August 8, 2019

Jack in the Box released Q3 financial results this week, showing a 2.7% boost in same-store sales that leadership attributes in large part to bundled value promotions that helped increase average ticket size at the QSR, according to the chain's quarterly report. 

Financial results for the 12 weeks that ended on July 7 this year showed July earnings from continuing operations were $13.5 million, or $0.51 per diluted share, for Q3 2019, down from $48.1 million, or $1.70 per diluted share, in Q3 2018. The company said it ended its existing interest rate swaps as part of its refinancing of its senior credit facility which incurred a pre-tax charge of $23.6 million. But it also announced that it issued an $200 million share repurchase authorization, for a total of $301 million and recorded operating EPS of $1.07 for Q3 this year, up from $1 for the period last year. 

Other key Q3 results, include: 
•    Q3 continuing operations earnings were down from $48.1 million in 2018 to $13.5 million this year. 
•    Per diluted share, earnings fell from $1.70 last year's quarter to $0.51 this year.
•    Q3 operating EPS rose to $1.07, compared to $1 in the prior year's quarter. 

"Our greater emphasis on bundled value in the third quarter resulted in a substantial improvement in both traffic and sales trends while also driving check and maintaining strong restaurant margins," Jack in the Box Chairman and CEO Lenny Comma, said in connection with the results. "Our guests have responded favorably to the breadth of our promotions, which leverage our strategy around compelling value bundles, including both new product innovation as well as guest favorites, without devaluing our core menu items. This momentum has accelerated thus far into our fourth quarter."

The company updated its guidance for the year to show a 1% increase in system same-store sales, as well as tax rates of 20% for the third quarter and 26%-27% for the fourth quarter and approximately $15 million to $20 million in tenant improvement allowances.