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Jack in the Box warns on Q2 same-store sales

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April 16, 2020

Jack in the Box Inc. withdrew its annual earnings forecast and warned that fiscal second-quarter same-store sales are projected to drop 4.2% as the COVID-19 outbreak hurt dine-in service, in a company release.

The San Diego-based hamburger chain, which has 2,250 restaurants in 21 states, said that its systemwide same-store sales fell 17% for the five weeks ended April 12, a period when the coronavirus rapidly spread across the U.S., forcing many restaurants to close dining rooms under mandated social distancing requirements. 

The numbers — though still unaudited — provide a stark illustration of the impact the pandemic's restrictions have made on the QSR industry. This, despite the fact, that for Jack in the Box, more than 99% of systemwide restaurants have remained open daily throughout the quarter, though all locations are operating in an off-premise capacity.

"We thank our employees, franchisees and partners for their tireless efforts to keep our drive-thrus open so that we may continue to serve our communities," Chairman and CEO Lenny Comma, said in the release. "We entered into this crisis in a position of strength, and we intend to emerge out of it even stronger," said Lenny Comma, chairman and chief executive officer.

The company said it has temporarily paused its share repurchase program and did not buy back any shares in the second quarter. It has also drawn down $108 million on its credit facility. The company expects to report over $165 million in cash on the balance sheet as of the end of the second quarter.

Jack in the Box has withdrawn its earnings guidance for the fiscal year ending September 27, 2020 and suspended all forward-looking guidance for 2020. The company said it will provide an update when it can reasonably estimate the impacts of the COVID-19 pandemic on business results. It's fiscal second-quarter earnings call is set for May 13, following market close.