News

Qdoba-less Jack in the Box wraps up Q2 with increased company sales

May 17, 2018

With the sale of the Qdoba brand now behind it, Jack in the Box Inc. finished off the second quarter on April 15 with earnings from continuing operations and same-store sales down, but company same-store sales up slightly thanks to growth in average check totals, a news release said. The company also announced an additional $200 million share repurchase authorization. 

Key Q2 2018 financial highlights include: 

• Same-store sales decreased 0.1 percent. 
• Qdoba Restaurant Corporation sale completed March 21. 
• Earnings for continuing operation down from 31.4 million ($1.01) per diluted share in 2017 to $25 million or $0.85 this year per diluted share. 
• Operating Earnings Per Share down from $0.86 last year's quarter to $0.80 in Q2 2018. 
• Company same-store sales increased 0.9 percent in Q2 2018, driven by higher checks, but fewer transactions. 
• Franchise EBITDA, as a percentage of total franchise revenues, fell to 59.8 percent from 61.2 percent the prior-year quarter.
• Adjusted EBITDA, was $60.3 million, down from $69.5 million for the prior-year quarter.

"Our second quarter operating results were in line with our expectations," Chairman and CEO Lenny Comma, said in the release. "We were pleased that a greater emphasis on value resulted in a sequential improvement in traffic during the quarter. And by balancing our value promotions with innovative premium products, we were able to protect restaurant margins.

"With the refranchising of 63 Jack in the Box restaurants in the second quarter and 29 thus far in the third quarter, our franchise mix now stands at 93 percent. We currently have signed non-binding letters of intent with franchisees to sell 17 additional restaurants, which would bring the Jack in the Box franchise mix to approximately 94 percent. In addition, we completed the sale of Qdoba during the quarter, which marks an important milestone in the actions we're taking to enhance shareholder value."

Comma said the resumption of share repurchases included the purchase of $100 million of stock, with the board authorizing an additional $200 million stock buyback program. The company also completed an amendment and extension of its existing credit facility to increase its borrowing capacity to 4.5 times EBITDA.

"We remain comfortable with ultimately increasing our leverage up to 5.0 times EBITDA," Comma said.