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Jack in the Box (JACK) Q3 Earnings Top Estimates, Rise Y/Y
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Jack in the Box Inc. (JACK - Free Report) reported decent third-quarter fiscal 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top declined year over year, while the bottom line increased from the prior-year quarter’s figure.
Following the results, shares of the company fell 6.8% during trading hours on Aug 9. Negative investor sentiments were witnessed as the company cited concerns about the heightened inflationary environment and its potential impact on restaurant margins. For fiscal 2023, the company expects annual commodity cost inflation to be up 8-10% year over year. Also, it expects wage inflation to be up 3-6% compared with fiscal 2022 levels.
Earnings & Revenues Details
During the fiscal third quarter, adjusted earnings from continuing operations came in at $1.45 per share. The figure beat the Zacks Consensus Estimate of $1.33. The metric increased 5.1% from $1.38 reported in the prior-year quarter.
Quarterly revenues of $396.9 million beat the Zacks Consensus Estimate of $394 million by 0.9%. However, the top line dropped 0.3% on a year-over-year basis.
Franchise rental revenues increased 7.7% year over year to $86.2 million. Our estimate for the metric was $61.5 million.
Franchise royalties and other revenues increased 5.6% year over year to $55 million. This figure compares to our projection of $54.1 million.
Franchise contributions to advertising and other services revenues rose 12.3% year over year to $57.2 million. This figure compares to our projection of $51.9 million.
Company restaurant sales during the quarter came in at $198.5 million (compared with $215.2 million reported in the prior-year quarter). This figure compares to our projection of $223.6 million.
Comps Discussion
In the quarter under review, comps at Jack in the Box’s stores increased 6.9% year over year compared with a 3.5% growth reported in the prior-year quarter. The upside was primarily driven by growth in average checks and traffic. Our estimate for the metric was 5.7%.
Same-store sales at franchised stores increased 8% year over year against a decline of 1% reported in the prior-year quarter.
Systemwide same-store sales increased 7.9% year over year against a decline of 0.6% reported in the year-ago quarter. Our estimate for the metric was 5.1%.
Del Taco Performance
During third-quarter fiscal 2023, same-store sales rose 1.7%, comprising franchise same-store sales growth of 1.8% and company-operated same-store sales growth of 1.7%. During the quarter, the company reported two franchise openings.
Operating Highlights
During the fiscal third quarter, restaurant-level adjusted margin came in at 21.8% compared with 15.8% in the prior-year quarter. The upside was driven by substantial sales leverage and solid sales in Oklahoma and Kansas City.
Food and packaging costs (as a percentage of company restaurant sales) fell 110 basis points (bps) year over year to 29.5%.
The franchise level margin was 41.1% in the fiscal third quarter compared with 41.4% reported in the prior-year quarter.
During the quarter, selling, general and administrative expenses accounted for 10% of total revenues (compared with 10.1% in the prior-year quarter). Our estimate for the metric was 10.4%.
Balance Sheet
As of Jul 9, 2023, cash totaled $154.1 million compared with $94.9 million as of Apr 16, 2023. Inventories during the quarter came in at $4.6 million compared with $5.3 million reported in the previous quarter. Long-term debt (net of current maturities) totaled $1,731.4 million as of Jul 9, 2023, compared with $1,737 million at the end of Apr 16, 2023.
During the fiscal third quarter, the company repurchased nearly 0.3 million shares for an aggregate cost of $26.9 million. As of Aug 9, 2023, the company stated the availability of $115 million under its repurchase program.
The company declared a cash dividend of 44 cents per share. The dividend will be paid out on Sep 18, 2023, to shareholders on record as of Sep 6, 2023.
Outlook
The company reaffirms its fiscal 2023 guidance. However, the company has made an exception with respect to refranchising Del Taco restaurants and share repurchases. The company now expects to refranchise 90-120 Del Taco restaurants in fiscal 2023, up from previous guidance of 65-85 restaurants.
In fiscal 2023, the company expects to repurchase $80 worth shares up from the previous expectation of $70 million.
Restaurant Brands International, Inc. (QSR - Free Report) reported impressive second-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily driven by strong global comparable sales, unit growth and a healthy balance of traffic and check.
During the quarter, QSR reported adjusted EPS of 85 cents, surpassing the Zacks Consensus Estimate of 76 cents. The bottom line increased 3.7% from an adjusted EPS of 82 cents reported in the prior-year quarter. Quarterly net revenues of $1,775 million surpassed the consensus mark of $1,746 million. The top line increased 8.3% on a year-over-year basis. The upside was driven by a rise in system-wide sales at Tim Hortons, Burger King, Popeyes and Firehouse Subs. However, this was partially offset by unfavorable FX movements.
The Cheesecake Factory Incorporated (CAKE - Free Report) reported second-quarter fiscal 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. The bottom and the top lines increased year over year. An increase in comparable restaurant sales backed by improving consumer demand and new restaurant openings drove the company’s performance.
During the quarter, CAKE reported adjusted EPS of 88 cents, beating the Zacks Consensus Estimate of 81 cents by 8.6%. The reported figure represented a 69.2% year-over-year increase. Total revenues of $866.2 million missed the consensus estimate of $881 million by 1.7%. However, the top line increased 4% on a year-over-year basis.
Chipotle Mexican Grill, Inc. (CMG - Free Report) released mixed second-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
During the quarter, Chipotle reported adjusted EPS of $12.65, beating the Zacks Consensus Estimate of $12.25. The bottom line increased 36% from the $9.30 reported in the year-ago quarter. Quarterly revenues of $2,514.8 million missed the consensus mark of $2,524 million. The top line increased 13.6% on a year-over-year basis. The upside can primarily be attributed to strong comparable restaurant sales growth and new restaurant openings.
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Jack in the Box (JACK) Q3 Earnings Top Estimates, Rise Y/Y
Jack in the Box Inc. (JACK - Free Report) reported decent third-quarter fiscal 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top declined year over year, while the bottom line increased from the prior-year quarter’s figure.
Following the results, shares of the company fell 6.8% during trading hours on Aug 9. Negative investor sentiments were witnessed as the company cited concerns about the heightened inflationary environment and its potential impact on restaurant margins. For fiscal 2023, the company expects annual commodity cost inflation to be up 8-10% year over year. Also, it expects wage inflation to be up 3-6% compared with fiscal 2022 levels.
Earnings & Revenues Details
During the fiscal third quarter, adjusted earnings from continuing operations came in at $1.45 per share. The figure beat the Zacks Consensus Estimate of $1.33. The metric increased 5.1% from $1.38 reported in the prior-year quarter.
Quarterly revenues of $396.9 million beat the Zacks Consensus Estimate of $394 million by 0.9%. However, the top line dropped 0.3% on a year-over-year basis.
Franchise rental revenues increased 7.7% year over year to $86.2 million. Our estimate for the metric was $61.5 million.
Franchise royalties and other revenues increased 5.6% year over year to $55 million. This figure compares to our projection of $54.1 million.
Franchise contributions to advertising and other services revenues rose 12.3% year over year to $57.2 million. This figure compares to our projection of $51.9 million.
Company restaurant sales during the quarter came in at $198.5 million (compared with $215.2 million reported in the prior-year quarter). This figure compares to our projection of $223.6 million.
Comps Discussion
In the quarter under review, comps at Jack in the Box’s stores increased 6.9% year over year compared with a 3.5% growth reported in the prior-year quarter. The upside was primarily driven by growth in average checks and traffic. Our estimate for the metric was 5.7%.
Same-store sales at franchised stores increased 8% year over year against a decline of 1% reported in the prior-year quarter.
Systemwide same-store sales increased 7.9% year over year against a decline of 0.6% reported in the year-ago quarter. Our estimate for the metric was 5.1%.
Del Taco Performance
During third-quarter fiscal 2023, same-store sales rose 1.7%, comprising franchise same-store sales growth of 1.8% and company-operated same-store sales growth of 1.7%. During the quarter, the company reported two franchise openings.
Operating Highlights
During the fiscal third quarter, restaurant-level adjusted margin came in at 21.8% compared with 15.8% in the prior-year quarter. The upside was driven by substantial sales leverage and solid sales in Oklahoma and Kansas City.
Food and packaging costs (as a percentage of company restaurant sales) fell 110 basis points (bps) year over year to 29.5%.
The franchise level margin was 41.1% in the fiscal third quarter compared with 41.4% reported in the prior-year quarter.
During the quarter, selling, general and administrative expenses accounted for 10% of total revenues (compared with 10.1% in the prior-year quarter). Our estimate for the metric was 10.4%.
Balance Sheet
As of Jul 9, 2023, cash totaled $154.1 million compared with $94.9 million as of Apr 16, 2023. Inventories during the quarter came in at $4.6 million compared with $5.3 million reported in the previous quarter. Long-term debt (net of current maturities) totaled $1,731.4 million as of Jul 9, 2023, compared with $1,737 million at the end of Apr 16, 2023.
During the fiscal third quarter, the company repurchased nearly 0.3 million shares for an aggregate cost of $26.9 million. As of Aug 9, 2023, the company stated the availability of $115 million under its repurchase program.
The company declared a cash dividend of 44 cents per share. The dividend will be paid out on Sep 18, 2023, to shareholders on record as of Sep 6, 2023.
Outlook
The company reaffirms its fiscal 2023 guidance. However, the company has made an exception with respect to refranchising Del Taco restaurants and share repurchases. The company now expects to refranchise 90-120 Del Taco restaurants in fiscal 2023, up from previous guidance of 65-85 restaurants.
In fiscal 2023, the company expects to repurchase $80 worth shares up from the previous expectation of $70 million.
Zacks Rank & Peer Releases
Jack in the Box currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Restaurant Brands International, Inc. (QSR - Free Report) reported impressive second-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily driven by strong global comparable sales, unit growth and a healthy balance of traffic and check.
During the quarter, QSR reported adjusted EPS of 85 cents, surpassing the Zacks Consensus Estimate of 76 cents. The bottom line increased 3.7% from an adjusted EPS of 82 cents reported in the prior-year quarter. Quarterly net revenues of $1,775 million surpassed the consensus mark of $1,746 million. The top line increased 8.3% on a year-over-year basis. The upside was driven by a rise in system-wide sales at Tim Hortons, Burger King, Popeyes and Firehouse Subs. However, this was partially offset by unfavorable FX movements.
The Cheesecake Factory Incorporated (CAKE - Free Report) reported second-quarter fiscal 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. The bottom and the top lines increased year over year. An increase in comparable restaurant sales backed by improving consumer demand and new restaurant openings drove the company’s performance.
During the quarter, CAKE reported adjusted EPS of 88 cents, beating the Zacks Consensus Estimate of 81 cents by 8.6%. The reported figure represented a 69.2% year-over-year increase. Total revenues of $866.2 million missed the consensus estimate of $881 million by 1.7%. However, the top line increased 4% on a year-over-year basis.
Chipotle Mexican Grill, Inc. (CMG - Free Report) released mixed second-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
During the quarter, Chipotle reported adjusted EPS of $12.65, beating the Zacks Consensus Estimate of $12.25. The bottom line increased 36% from the $9.30 reported in the year-ago quarter. Quarterly revenues of $2,514.8 million missed the consensus mark of $2,524 million. The top line increased 13.6% on a year-over-year basis. The upside can primarily be attributed to strong comparable restaurant sales growth and new restaurant openings.