Operations

Jack in the Box springs up in Q2 with 20.6% SSS boost

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May 13, 2021

Jack in the Box Inc. not only beat analysts' estimates with its Q2 earnings and revenue, but will also provide a 10% boost in its quarterly cash dividend.

In an earnings report this morning for the quarter that ended April 11, the company said total revenues grew 19% to $257.2 million, compared to $216.2 million in last year's quarter. That number was driven by 20.6% growth in system same-store sales. Company same-store sales increased 14.5% for the quarter, which the company said reflects average check growth of 19.9%, despite a 5.4% decrease in transactions.

Other notable Q2 results include:

• 21.% growth in franchise same-store sales.
• Net earning more than tripled to $35.9 million, or $1.58 per diluted share, compared with $11.5 million, or 50 cents per diluted share last year's quarter.
• Operating EPS was $1.48 compared to 50 cents in the prior year's quarter.
• Adjusted EBITDA was $75.8 million compared with $46.3 million for the prior year quarter.
• Restaurant-Level margin grew to 25.9% of company restaurant sales from 20.6% a year ago.

"Consumers continue to embrace Jack in the Box's iconic all-day menu and continuous menu innovations, driving growth across every day-part," CEO Darin Harris said in the report. "A shift toward our core premium entrees, combined with an increase in items per order reflecting larger parties, fueled a nearly-20 percent increase in average check. Our performance was strong across all regions throughout the quarter, including in Texas where pandemic dine-in restrictions were lifted much earlier than in our other large markets. Stimulus payments also contributed to our strong performance during the last four weeks of the quarter."

"We are off to a good start through the first four weeks of the third quarter, giving us confidence that our key strategies continue to resonate with guests and position us to maintain momentum while we work closely with our franchisees to grow."

The company fiscal year guidance for the period that ends Oct. 3, includes:

• High single-digit system same-store sales growth.
• Commodity cost inflation of approximately 3%.
• Labor cost inflation of 5% to 6%.
• Adjusted EBITDA of between approximately $320 million and $330 million.