We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Jack In The Box (JACK) Down 6.3% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Jack In The Box (JACK - Free Report) . Shares have lost about 6.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Jack In The Box due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Jack in the Box Q4 Earnings Lag Estimates, Revenues Top
Jack in the Box reported mixed fourth-quarter fiscal 2022 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top line rose year over year, while the bottom line declined on a year-over-year basis.
Earnings & Revenues Details
During the fiscal fourth quarter, adjusted earnings from continuing operations came in at $1.33 per share. The figure missed the Zacks Consensus Estimate of $1.35. The metric dropped 23.1% from $1.73 reported in the prior-year quarter.
Quarterly revenues of $402.8 million beat the Zacks Consensus Estimate of $392 million by 2.6%. The top line rallied 44.6% on a year-over-year basis. Franchise rental revenues fell 4.4% year over year to $80.7 million. Franchise royalties and other revenues increased 15.5% year over year to $56.9 million. Franchise contributions to advertising and other services revenues rose 3.2% year over year to $50.7 million. Company restaurant sales increased to $214.5 million from $95.6 million reported in the prior-year quarter.
Comps Discussion
In the quarter under review, comps at Jack in the Box’s stores increased 11.4% year over year compared against a decline of 4.4% reported in the prior-year quarter. The upside in comps was primarily due to an increase in average checks partially offset by a decline in traffic (for franchise).
Same-store sales at franchised stores increased 3.2% year over year compared with 0.6% growth reported in the prior-year quarter. System-wide same-store sales increased 4% year over year compared with a 0.1% increase reported in the year-ago quarter.
Del Taco Performance
During fourth-quarter fiscal 2022, same-store sales rose 5.2%, comprising franchise same-store sales growth of 6.4% and company-operated same-store sales growth of 4.1%. During the quarter, the company closed three restaurants.
Operating Highlights
During the fiscal fourth quarter, restaurant-level adjusted margin came in at 16.2% compared with 20.1% reported in the prior-year quarter. The downside was driven by higher food and packaging costs, wage inflation of 11.3% and higher utilities and maintenance and repair costs. However, this was partially offset by menu price increases.
Food and packaging costs (as a percentage of company restaurant sales) fell 10 bps year over year to 30.9%. Commodity costs during the quarter increased 14.9% year over year. The upside can be attributed to a rise in the price of proteins, sauces and oil.
The franchise level margin was 42.4% in the fiscal fourth quarter compared with 41.4% reported in the prior-year quarter. During the quarter, selling, general and administrative expenses accounted for 9.3% of total revenues compared with 7.6% reported in the prior-year quarter.
Balance Sheet
As of Oct 2, 2022, cash totaled $108.9 million compared with $55.3 million as of Oct 3, 2021. Inventories during the quarter came in at $5.3 million compared with $2.3 million as of Oct 3, 2021. Long-term debt (net of current maturities) totaled $1,799.5 million as of Oct 2, 2022, compared with $1,273.4 million at the end of Oct 3, 2021.
During the fiscal fourth quarter, the company repurchased nearly 0.3 million shares for an aggregate cost of $25 million. As of Oct 2, the company stated the availability of $175 million under its repurchase program. The company declared a cash dividend of 44 cents per share. The dividend will be paid out on Dec 22, 2022, to shareholders on record as of Dec 7, 2022.
2022 Highlights
Total revenues in fiscal 2022 amounted to $1,468.1 million compared with $1,143.7 million in fiscal 2021.
Adjusted EBITDA in fiscal 2022 came in at $306.6 million compared with $331.4 million in fiscal 2021. Diluted net earnings per share (EPS) for fiscal 2022 came in at $5.45, compared with $7.37 reported in the prior year.
Fiscal 2023 Outlook
For fiscal 2023, the company anticipates Jack in the Box Restaurant Level Margin to be 18-20%. Del Taco Restaurant Level Margin is expected to be in the range of 14-16%. The company expects Same Store sales for Jack in the Box and Del Taco to be in the low single digits. Company-wide CapEx and Other Investments in fiscal 2023 are expected in the range of $75-90 million. SG&A expenses are estimated at approximately $160-170 million. Company-wide operating earnings per share EPS for fiscal 2023 are expected in the range of $5.25 to $5.65.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -15.29% due to these changes.
VGM Scores
At this time, Jack In The Box has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Jack In The Box has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Jack In The Box is part of the Zacks Retail - Restaurants industry. Over the past month, Wendy's (WEN - Free Report) , a stock from the same industry, has gained 4.4%. The company reported its results for the quarter ended September 2022 more than a month ago.
Wendy's reported revenues of $532.57 million in the last reported quarter, representing a year-over-year change of +13.3%. EPS of $0.24 for the same period compares with $0.19 a year ago.
Wendy's is expected to post earnings of $0.20 per share for the current quarter, representing a year-over-year change of +25%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.8%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Wendy's. Also, the stock has a VGM Score of D.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Jack In The Box (JACK) Down 6.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Jack In The Box (JACK - Free Report) . Shares have lost about 6.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Jack In The Box due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Jack in the Box Q4 Earnings Lag Estimates, Revenues Top
Jack in the Box reported mixed fourth-quarter fiscal 2022 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top line rose year over year, while the bottom line declined on a year-over-year basis.
Earnings & Revenues Details
During the fiscal fourth quarter, adjusted earnings from continuing operations came in at $1.33 per share. The figure missed the Zacks Consensus Estimate of $1.35. The metric dropped 23.1% from $1.73 reported in the prior-year quarter.
Quarterly revenues of $402.8 million beat the Zacks Consensus Estimate of $392 million by 2.6%. The top line rallied 44.6% on a year-over-year basis. Franchise rental revenues fell 4.4% year over year to $80.7 million. Franchise royalties and other revenues increased 15.5% year over year to $56.9 million. Franchise contributions to advertising and other services revenues rose 3.2% year over year to $50.7 million. Company restaurant sales increased to $214.5 million from $95.6 million reported in the prior-year quarter.
Comps Discussion
In the quarter under review, comps at Jack in the Box’s stores increased 11.4% year over year compared against a decline of 4.4% reported in the prior-year quarter. The upside in comps was primarily due to an increase in average checks partially offset by a decline in traffic (for franchise).
Same-store sales at franchised stores increased 3.2% year over year compared with 0.6% growth reported in the prior-year quarter. System-wide same-store sales increased 4% year over year compared with a 0.1% increase reported in the year-ago quarter.
Del Taco Performance
During fourth-quarter fiscal 2022, same-store sales rose 5.2%, comprising franchise same-store sales growth of 6.4% and company-operated same-store sales growth of 4.1%. During the quarter, the company closed three restaurants.
Operating Highlights
During the fiscal fourth quarter, restaurant-level adjusted margin came in at 16.2% compared with 20.1% reported in the prior-year quarter. The downside was driven by higher food and packaging costs, wage inflation of 11.3% and higher utilities and maintenance and repair costs. However, this was partially offset by menu price increases.
Food and packaging costs (as a percentage of company restaurant sales) fell 10 bps year over year to 30.9%. Commodity costs during the quarter increased 14.9% year over year. The upside can be attributed to a rise in the price of proteins, sauces and oil.
The franchise level margin was 42.4% in the fiscal fourth quarter compared with 41.4% reported in the prior-year quarter. During the quarter, selling, general and administrative expenses accounted for 9.3% of total revenues compared with 7.6% reported in the prior-year quarter.
Balance Sheet
As of Oct 2, 2022, cash totaled $108.9 million compared with $55.3 million as of Oct 3, 2021. Inventories during the quarter came in at $5.3 million compared with $2.3 million as of Oct 3, 2021. Long-term debt (net of current maturities) totaled $1,799.5 million as of Oct 2, 2022, compared with $1,273.4 million at the end of Oct 3, 2021.
During the fiscal fourth quarter, the company repurchased nearly 0.3 million shares for an aggregate cost of $25 million. As of Oct 2, the company stated the availability of $175 million under its repurchase program. The company declared a cash dividend of 44 cents per share. The dividend will be paid out on Dec 22, 2022, to shareholders on record as of Dec 7, 2022.
2022 Highlights
Total revenues in fiscal 2022 amounted to $1,468.1 million compared with $1,143.7 million in fiscal 2021.
Adjusted EBITDA in fiscal 2022 came in at $306.6 million compared with $331.4 million in fiscal 2021. Diluted net earnings per share (EPS) for fiscal 2022 came in at $5.45, compared with $7.37 reported in the prior year.
Fiscal 2023 Outlook
For fiscal 2023, the company anticipates Jack in the Box Restaurant Level Margin to be 18-20%. Del Taco Restaurant Level Margin is expected to be in the range of 14-16%. The company expects Same Store sales for Jack in the Box and Del Taco to be in the low single digits. Company-wide CapEx and Other Investments in fiscal 2023 are expected in the range of $75-90 million. SG&A expenses are estimated at approximately $160-170 million. Company-wide operating earnings per share EPS for fiscal 2023 are expected in the range of $5.25 to $5.65.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -15.29% due to these changes.
VGM Scores
At this time, Jack In The Box has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Jack In The Box has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Jack In The Box is part of the Zacks Retail - Restaurants industry. Over the past month, Wendy's (WEN - Free Report) , a stock from the same industry, has gained 4.4%. The company reported its results for the quarter ended September 2022 more than a month ago.
Wendy's reported revenues of $532.57 million in the last reported quarter, representing a year-over-year change of +13.3%. EPS of $0.24 for the same period compares with $0.19 a year ago.
Wendy's is expected to post earnings of $0.20 per share for the current quarter, representing a year-over-year change of +25%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.8%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Wendy's. Also, the stock has a VGM Score of D.