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Jack in the Box (JACK) Q3 Earnings Top Estimates, Revenues Lag
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Jack in the Box Inc. (JACK - Free Report) reported mixed second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line also declined year over year.
Earnings & Revenue Details
In the fiscal third quarter, operating earnings per share (EPS) came in at $1.65, beating the Zacks Consensus Estimate of $1.50. The metric rose 13.8% from $1.45 per share reported in the prior-year quarter.
Quarterly revenues of $369.2 million missed the consensus mark of $370 million. The top line declined 7% on a year-over-year basis.
Franchise rental revenues increased 3.3% year over year to $58.3 million. Franchise royalties and other revenues decreased 0.6% year over year to $55.3 million.
Franchise contributions to advertising and other services revenues rose 1.9% year over year to $58.3 million. Company restaurant sales in the quarter came in at $166.5 million (compared with $198.5 million reported in the prior-year quarter).
Comps Discussion
In the quarter under review, company-owned same-store sales inched up 0.1% year over year compared with 6.9% growth reported in the prior-year quarter.
Same-store sales at franchised stores declined 2.4% year over year against the growth of 8% reported in the prior-year quarter.
Systemwide same-store sales fell 2.2% year over year against 7.9% growth reported in the year-ago quarter. Reduced transactions and an unfavorable mix shift caused the downside.
Del Taco Performance
In third-quarter fiscal 2024, company-owned same-store sales moved down 3.5% year over year, comprising the decline in franchise same-store and system-operated same-store sales of 4.1% and 3.9%, respectively.
Operating Highlights
In the fiscal third quarter, the total restaurant-level adjusted margin came in at 21% compared with 21.8% reported in the prior-year quarter. The metric’s decline was primarily due to increased costs for labor as well as other restaurant operations, marginally overshadowed by lower food and packaging costs.
Food and packaging costs (as a percentage of company restaurant sales) fell 170 basis points (bps) year over year to 27.8%.
The total franchise level margin was 41.1% in the fiscal third quarter, flat year over year.
In the quarter under review, selling, general and administrative expenses accounted for 8% of total revenues, compared with 10% in the prior year quarter.
Balance Sheet
As of Jul 7, 2024, cash totaled $21.6 million compared with $157.7 million as of Oct 1, 2023. Inventories during the quarter came in at $4.1 million, flat sequentially. Long-term debt (net of current maturities) totaled $1.71 billion as of Jul 7, compared with $1.72 billion at the end of Oct 1, 2023.
In the fiscal third quarter, the company repurchased 0.3 million shares for an aggregate cost of $15.1 million. As of Jul 7, the management stated the availability of $195 million under its share repurchase program.
The company declared a cash dividend of 44 cents per share. The dividend will be paid out on Sep 19, 2024, to its shareholders on record as of Aug 30.
Fiscal 2024 Outlook
For fiscal 2024, the company anticipates Adjusted EBITDA to be in the range of $320-$325 million, down from the prior estimate of $325-$330 million. Depreciation and Amortization expenses are anticipated between $60 million and $62 million, respectively.
Jack in the Box Restaurant Level Margin is expected to be 22% compared with the prior estimate of 22-23%. The company expects same-store sales for Jack in the Box and Del Taco to be down 1% and 1.5%, respectively.
Company-wide operating EPS for fiscal 2024 is expected to be in the range of $6.10-$6.25, down from the prior estimate of $6.25-$6.40.
The Wendy’s Company (WEN - Free Report) reported dismal second-quarter fiscal 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. On a year-over-year basis, the top line rose while the bottom line declined. Solid same-restaurant sales and strength in the U.S. breakfast sales and digital sales momentum aided the company’s performance.
The company continues to focus on industry-leading quality, innovation and value. WEN aims to maintain a customer-first approach while driving its restaurant economic model throughout the year and beyond.
Shake Shack Inc. (SHAK - Free Report) posted decent second-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The bottom and the top line increased on a year-over-year basis. In the quarter, the company benefited from product innovations, strategic menu pricing, technology implementations and promotions.
Looking ahead, SHAK is committed to achieving efficiency across regions and formats by utilizing drive-throughs and third-party delivery. The company plans to reduce build costs by 10% in 2024 and further lower costs in 2025, enabling the exploration of new real estate options while maintaining returns. It intends to achieve strong unit-level economics and boost ROI, fostering long-term value creation for its shareholders.
The Cheesecake Factory Incorporated (CAKE - Free Report) reported second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The bottom and the top line increased from the prior-year quarter’s figure.
In the quarter, CAKE stated benefits from strong demand and sales performance of new restaurant openings. Also, improvements in food efficiencies, labor productivity, overtime and wage management enhanced restaurant-level profitability. The company emphasizes strengthening its operational service to drive long-term growth.
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Jack in the Box (JACK) Q3 Earnings Top Estimates, Revenues Lag
Jack in the Box Inc. (JACK - Free Report) reported mixed second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line also declined year over year.
Earnings & Revenue Details
In the fiscal third quarter, operating earnings per share (EPS) came in at $1.65, beating the Zacks Consensus Estimate of $1.50. The metric rose 13.8% from $1.45 per share reported in the prior-year quarter.
Quarterly revenues of $369.2 million missed the consensus mark of $370 million. The top line declined 7% on a year-over-year basis.
Franchise rental revenues increased 3.3% year over year to $58.3 million. Franchise royalties and other revenues decreased 0.6% year over year to $55.3 million.
Franchise contributions to advertising and other services revenues rose 1.9% year over year to $58.3 million. Company restaurant sales in the quarter came in at $166.5 million (compared with $198.5 million reported in the prior-year quarter).
Comps Discussion
In the quarter under review, company-owned same-store sales inched up 0.1% year over year compared with 6.9% growth reported in the prior-year quarter.
Same-store sales at franchised stores declined 2.4% year over year against the growth of 8% reported in the prior-year quarter.
Systemwide same-store sales fell 2.2% year over year against 7.9% growth reported in the year-ago quarter. Reduced transactions and an unfavorable mix shift caused the downside.
Del Taco Performance
In third-quarter fiscal 2024, company-owned same-store sales moved down 3.5% year over year, comprising the decline in franchise same-store and system-operated same-store sales of 4.1% and 3.9%, respectively.
Operating Highlights
In the fiscal third quarter, the total restaurant-level adjusted margin came in at 21% compared with 21.8% reported in the prior-year quarter. The metric’s decline was primarily due to increased costs for labor as well as other restaurant operations, marginally overshadowed by lower food and packaging costs.
Food and packaging costs (as a percentage of company restaurant sales) fell 170 basis points (bps) year over year to 27.8%.
The total franchise level margin was 41.1% in the fiscal third quarter, flat year over year.
In the quarter under review, selling, general and administrative expenses accounted for 8% of total revenues, compared with 10% in the prior year quarter.
Balance Sheet
As of Jul 7, 2024, cash totaled $21.6 million compared with $157.7 million as of Oct 1, 2023. Inventories during the quarter came in at $4.1 million, flat sequentially. Long-term debt (net of current maturities) totaled $1.71 billion as of Jul 7, compared with $1.72 billion at the end of Oct 1, 2023.
In the fiscal third quarter, the company repurchased 0.3 million shares for an aggregate cost of $15.1 million. As of Jul 7, the management stated the availability of $195 million under its share repurchase program.
The company declared a cash dividend of 44 cents per share. The dividend will be paid out on Sep 19, 2024, to its shareholders on record as of Aug 30.
Fiscal 2024 Outlook
For fiscal 2024, the company anticipates Adjusted EBITDA to be in the range of $320-$325 million, down from the prior estimate of $325-$330 million. Depreciation and Amortization expenses are anticipated between $60 million and $62 million, respectively.
Jack in the Box Restaurant Level Margin is expected to be 22% compared with the prior estimate of 22-23%. The company expects same-store sales for Jack in the Box and Del Taco to be down 1% and 1.5%, respectively.
Company-wide operating EPS for fiscal 2024 is expected to be in the range of $6.10-$6.25, down from the prior estimate of $6.25-$6.40.
Zacks Rank
JACK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Retail-Wholesale Releases
The Wendy’s Company (WEN - Free Report) reported dismal second-quarter fiscal 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. On a year-over-year basis, the top line rose while the bottom line declined. Solid same-restaurant sales and strength in the U.S. breakfast sales and digital sales momentum aided the company’s performance.
The company continues to focus on industry-leading quality, innovation and value. WEN aims to maintain a customer-first approach while driving its restaurant economic model throughout the year and beyond.
Shake Shack Inc. (SHAK - Free Report) posted decent second-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The bottom and the top line increased on a year-over-year basis. In the quarter, the company benefited from product innovations, strategic menu pricing, technology implementations and promotions.
Looking ahead, SHAK is committed to achieving efficiency across regions and formats by utilizing drive-throughs and third-party delivery. The company plans to reduce build costs by 10% in 2024 and further lower costs in 2025, enabling the exploration of new real estate options while maintaining returns. It intends to achieve strong unit-level economics and boost ROI, fostering long-term value creation for its shareholders.
The Cheesecake Factory Incorporated (CAKE - Free Report) reported second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The bottom and the top line increased from the prior-year quarter’s figure.
In the quarter, CAKE stated benefits from strong demand and sales performance of new restaurant openings. Also, improvements in food efficiencies, labor productivity, overtime and wage management enhanced restaurant-level profitability. The company emphasizes strengthening its operational service to drive long-term growth.