Jack in the Box profit falls 63% in 1Q
Jack in the Box Inc. posted Wednesday a 63-percent decline in first quarter profit, as commodity and restaurant reimaging costs offset growth in same-store sales.
The San Diego-based operator of the Jack in the Box and Qdoba Mexican Grill chains said an 8-percent increase in commodity costs, as well as costs associated with the ongoing reimaging of Jack in the Box restaurants, drove its net income decline for the quarter ended Jan. 22.
First-quarter net income totaled $12 million, or 27 cents per share, compared with earnings of $32.4 million, or 61 cents per share, in the same quarter a year ago.
Corporate revenue fell nearly 2 percent to $652.7 million, from $664.7 million a year ago.
Systemwide same-store sales rose 3.6 percent for the Jack in the Box chain, reflecting an increase of 5.3 percent at company-owned locations and 2.8 percent at franchise restaurants.
Linda Lang, the company’s chair, chief executive and president, said same-store sales increases were driven by a combination of traffic and average check growth.
She credited investments the company has made in improving the guest experience, such as the ongoing remodel program, which is almost complete. The chain has also revamped core menu items over the past year.
“On a two-year cumulative basis, this represented a 500 basis point [or 5-percent] acceleration from the fourth quarter of 2011, and our sixth consecutive quarter of sequentially improving company same-store sales trends,” Lang said in a statement.
At Qdoba, first-quarter systemwide same-store sales rose 3.8 percent, reflecting an increase of 3.5 percent at company units and 4 percent at franchise units.
For the second quarter, the company is projecting a same-store sales increase of between 4 percent and 5 percent at both Jack in the Box and Qdoba.
For the year, the company expects same-store sales to increase between 3 percent and 4 percent for Jack in the Box and between 4 percent and 5 percent at Qdoba.
Overall commodity costs are expected to increase by about 5 percent, the company said, with higher inflation in the first half of the year. Between 30 and 35 new Jack in the Box restaurants are expected to open, including about 15 company locations.
Jack in the Box Inc. operates 2,236 Jack in the Box restaurants and franchises another 1,602 locations. It also operates 597 Qdoba units and franchises and additional 335 locations.