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Jack in the Box (JACK) Q4 Earnings Miss, Sales Beat Estimates
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Jack in the Box Inc. (JACK - Free Report) reported mixed fourth-quarter fiscal 2018 results, wherein the bottom line lagged the Zacks Consensus Estimate but the top line surpassed the same. Following the quarterly results, shares of the company increased 1.8% in after-hours trading. However, in a year’s time, the stock has lost 2.8% against the industry’s 12.7% growth.
Adjusted earnings from continuing operations came in at 77 cents per share, which missed the consensus mark of 83 cents. However, the reported figure increased 5.5% on a year-over-year basis. Total sales of $177.5 million exceeded the consensus mark of $174 million but decreased 23.5% year over year.
Comps Discussion
Comps at Jack in the Box’s stores inched up 0.8% compared to the prior-year quarter’s decline of 2%. The uptick was driven by average check growth of 2.8%, partially offset by a 2% decline in transactions. In third-quarter fiscal 2018, the company had reported comps growth of 0.6%.
Same-store sales at franchised stores rose 0.4% compared to a 0.7% decline in the prior-year quarter. The metric rose 0.5% in the previous quarter. System-wide same-store sales were up 0.5% compared to a decline of 1% in the prior year quarter. In third-quarter fiscal 2018, system-wide same-store sales increased 0.5%.
Jack In The Box Inc. Price, Consensus and EPS Surprise
Jack in the Box’s consolidated restaurant operating margin was 22.5%, up 330 basis points (bps) year over year.
Restaurant-level EBITDA increased 300 bps from the year-ago quarter to 26.1%. The upside was owing to benefits from refranchising, partially offset by wage inflation as well as higher repairs, maintenance costs and cost of food packaging.
In the fiscal fourth quarter, franchise operating margin was 50%, down 210 bps year over year. Franchise EBITDA was 58.6%, reflecting a year-over-year decline of 170 bps. The downside can be attributed to rise in costs in the current quarter.
Balance Sheet
As of Sep 30, 2018, cash totaled $2.7 million compared with $4.5 million as of Oct 1, 2017 (end of fourth-quarter and fiscal 2017). Inventories in the quarter under review amounted to $1.9 million, down from $3.4 million at the end of fiscal 2017.
Long-term debt summed $1,037.9 million as of Jul 2, 2018 compared with $1,080 million at the end of fiscal 2017. Cash flows from operating activities declined to $104.1 million in the fourth quarter from $133.7 million at the prior-year quarter end.
The company repurchased 1.6 million for $140 million in fourth-quarter fiscal 2018. Additionally, it has $41 million left under the current authorization.
2019 Outlook
Comps at Jack in the Box system restaurants are envisioned to be in the range of flat to up 2%. Meanwhile, the company continues to expect Restaurant-Level EBITDA within the 26-27% band.
For fiscal 2019, adjusted EBITDA is anticipated between approximately $260 million and $270 million. Capital expenditures are estimated roughly in the range of $30-$35 million.
Dunkin' Brands Group has an impressive long-term earnings growth rate of 12.4%.
Dave & Buster's Entertainment delivered positive earnings surprise in each of the trailing four quarters, with the average being 13.7%.
Darden Restaurants reported better-than-expected earnings over the preceding four quarters, with the average being 5.1%.
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Image: Bigstock
Jack in the Box (JACK) Q4 Earnings Miss, Sales Beat Estimates
Jack in the Box Inc. (JACK - Free Report) reported mixed fourth-quarter fiscal 2018 results, wherein the bottom line lagged the Zacks Consensus Estimate but the top line surpassed the same. Following the quarterly results, shares of the company increased 1.8% in after-hours trading. However, in a year’s time, the stock has lost 2.8% against the industry’s 12.7% growth.
Adjusted earnings from continuing operations came in at 77 cents per share, which missed the consensus mark of 83 cents. However, the reported figure increased 5.5% on a year-over-year basis. Total sales of $177.5 million exceeded the consensus mark of $174 million but decreased 23.5% year over year.
Comps Discussion
Comps at Jack in the Box’s stores inched up 0.8% compared to the prior-year quarter’s decline of 2%. The uptick was driven by average check growth of 2.8%, partially offset by a 2% decline in transactions. In third-quarter fiscal 2018, the company had reported comps growth of 0.6%.
Same-store sales at franchised stores rose 0.4% compared to a 0.7% decline in the prior-year quarter. The metric rose 0.5% in the previous quarter. System-wide same-store sales were up 0.5% compared to a decline of 1% in the prior year quarter. In third-quarter fiscal 2018, system-wide same-store sales increased 0.5%.
Jack In The Box Inc. Price, Consensus and EPS Surprise
Jack In The Box Inc. Price, Consensus and EPS Surprise | Jack In The Box Inc. Quote
Operating Highlights
Jack in the Box’s consolidated restaurant operating margin was 22.5%, up 330 basis points (bps) year over year.
Restaurant-level EBITDA increased 300 bps from the year-ago quarter to 26.1%. The upside was owing to benefits from refranchising, partially offset by wage inflation as well as higher repairs, maintenance costs and cost of food packaging.
In the fiscal fourth quarter, franchise operating margin was 50%, down 210 bps year over year. Franchise EBITDA was 58.6%, reflecting a year-over-year decline of 170 bps. The downside can be attributed to rise in costs in the current quarter.
Balance Sheet
As of Sep 30, 2018, cash totaled $2.7 million compared with $4.5 million as of Oct 1, 2017 (end of fourth-quarter and fiscal 2017). Inventories in the quarter under review amounted to $1.9 million, down from $3.4 million at the end of fiscal 2017.
Long-term debt summed $1,037.9 million as of Jul 2, 2018 compared with $1,080 million at the end of fiscal 2017. Cash flows from operating activities declined to $104.1 million in the fourth quarter from $133.7 million at the prior-year quarter end.
The company repurchased 1.6 million for $140 million in fourth-quarter fiscal 2018. Additionally, it has $41 million left under the current authorization.
2019 Outlook
Comps at Jack in the Box system restaurants are envisioned to be in the range of flat to up 2%. Meanwhile, the company continues to expect Restaurant-Level EBITDA within the 26-27% band.
For fiscal 2019, adjusted EBITDA is anticipated between approximately $260 million and $270 million. Capital expenditures are estimated roughly in the range of $30-$35 million.
Zacks Rank & Key Picks
Jack in the Box carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include Dunkin' Brands Group, Inc. , Dave & Buster's Entertainment, Inc. (PLAY - Free Report) and Darden Restaurants, Inc. (DRI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dunkin' Brands Group has an impressive long-term earnings growth rate of 12.4%.
Dave & Buster's Entertainment delivered positive earnings surprise in each of the trailing four quarters, with the average being 13.7%.
Darden Restaurants reported better-than-expected earnings over the preceding four quarters, with the average being 5.1%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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