Jack in the Box Inc. Reports Fourth Quarter FY 2016 Earnings; Issues Guidance for FY 2017; Raises Quarterly Cash Dividend by 33%

SAN DIEGO - November 21, 2016 - (BUSINESS WIRE) - Jack in the Box Inc. (NASDAQ: JACK) today reported earnings from continuing operations of $32.6 million, or $0.98 per diluted share, for the fourth quarter ended October 2, 2016, compared with $23.8 million, or $0.65 per diluted share, for the fourth quarter of fiscal 2015. Fiscal 2016 earnings from continuing operations totaled $126.3 million, or $3.70 per diluted share, compared with $112.6 million, or $2.95 per diluted share in fiscal 2015.

Operating earnings per share, a non-GAAP measure which the company defines as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising, were $1.03 in the fourth quarter of fiscal 2016 compared with $0.62 in the prior year quarter. For fiscal year 2016, operating earnings per share were $3.86 compared with $3.00 last year.

The fourth quarter and fiscal year ended October 2, 2016, included 13 weeks and 53 weeks, respectively, as compared to 12 weeks and 52 weeks in the fourth quarter and fiscal year ended September 27, 2015, respectively. The company estimates that the extra week benefited diluted earnings per share by approximately 9 cents in both the fourth quarter and fiscal 2016.

A reconciliation of non-GAAP measurements to GAAP results is provided below, with additional information included in the attachment to this release. Figures may not add due to rounding.

    13 Weeks Ended   12 Weeks Ended   53 Weeks Ended   52 Weeks Ended
    Oct. 2,
2016
 

Sept. 27,
2015

  Oct. 2,
2016
 

Sept. 27,
2015

Diluted earnings per share from
continuing operations – GAAP
  $ 0.98     $ 0.65     $ 3.70     $ 2.95
Restructuring charges   0.05     0.00     0.19     0.00
(Gains) losses from refranchising   0.00     (0.02 )   (0.02 )   0.05
Operating earnings per share – Non-GAAP   $ 1.03     $ 0.62     $ 3.86     $ 3.00
                     

During fiscal 2016, the company announced plans to reduce general and administrative costs. A comprehensive review of its organizational structure identified cost savings from workforce reductions, relocation and consolidation of the Qdoba®corporate support center, refranchising initiatives, and information technology synergies across both brands. As a result, restructuring charges of $2.3 million, or approximately $0.05 per diluted share, were recorded during the fourth quarter. Restructuring charges for fiscal year 2016 totaled $10.1 million, or approximately $0.19 per diluted share. Charges consist primarily of employee severance pay and facility closing costs. These charges are included in “impairment and other charges, net” in the accompanying consolidated statements of earnings.

Lenny Comma, chairman and chief executive officer, said, “Operating earnings per share for the fourth quarter exceeded our expectations, due primarily to a reduction in G&A costs resulting from our restructuring initiatives, as well as lower impairment charges and a lower tax rate. We were pleased that Jack in the Box® system same-store sales outperformed sluggish industry trends, and although sales and traffic growth at Qdoba were solid, margins were hampered by the impact of new restaurant openings.

“Operating earnings per share for the year (excluding the benefit of the 53rd week) grew more than 25 percent, the fifth consecutive year of growth in excess of 20 percent.

“We are happy with the progress we made on our key strategic initiatives during the year, as we made significant headway on reducing our G&A, increased our borrowing capacity to support our capital structure goals, and began implementing plans to increase the franchise mix at Jack in the Box to over 90 percent of the system.”

Increase in same-store sales:

      13 Weeks Ended   12 Weeks Ended   53 Weeks Ended   52 Weeks Ended
      Oct. 2,
2016
 

Sept. 27,
2015

  Oct. 2,
2016
 

Sept. 27,
2015

Jack in the Box:                
  Company   0.5%   4.1%   0.0%   5.1%
  Franchise   2.4%   6.9%   1.6%   7.0%
  System   2.0%   6.2%   1.2%   6.5%
Qdoba:                
  Company   1.2%   6.1%   1.7%   8.3%
  Franchise   0.4%   7.2%   1.1%   10.4%
  System   0.8%   6.6%   1.4%   9.3%
                   

Jack in the Box system same-store sales increased 2.0 percent for the quarter and exceeded the QSR sandwich segment by 1.3 percentage points for the comparable period, according to The NPD Group’s SalesTrack® Weekly for the 13-week time period ended October 2, 2016. Included in this segment are 16 of the top QSR sandwich and burger chains in the country. Company same-store sales increased 0.5 percent in the fourth quarter, with average check up 3.5 percent.

Qdoba same-store sales increased 0.8 percent system-wide and 1.2 percent for company restaurants in the fourth quarter. Company same-store sales reflected a 0.7 percent increase in transactions as well as growth in catering sales.

Consolidated restaurant operating margin decreased by 30 basis points to 19.7 percent of sales in the fourth quarter of 2016, compared with 20.0 percent of sales in the year-ago quarter. Restaurant operating margin for Jack in the Box company restaurants increased 70 basis points to 21.0 percent of sales. The increase was due primarily to favorable food and packaging costs, which were partially offset by higher costs related to equipment upgrades, maintenance and repair expenses, and minimum wage increases in California that went into effect in January 2016. The decrease in food and packaging costs as a percentage of sales resulted from the benefit of commodity deflation of approximately 4.0 percent in the quarter, favorable product mix changes and menu price increases. Restaurant operating margin for Qdoba company restaurants decreased 220 basis points to 17.3 percent of sales. The decrease was due primarily to costs associated with a greater number of new restaurant openings, increased promotional activity, and higher costs related to technology upgrades which more than offset the sales growth and benefits from commodity deflation of approximately 3.4 percent in the quarter.

Franchise margin as a percentage of total franchise revenues improved to 53.7 percent in the fourth quarter from 51.4 percent in the prior year quarter. The improvement was due primarily to higher royalty revenue for both brands and higher rental income from Jack in the Box franchised restaurants resulting from increases in franchise average unit volumes.

SG&A expense for the fourth quarter decreased by $6.3 million and was 12.1 percent of revenues as compared to 15.4 percent in the prior year quarter. Key items contributing to the decrease were lower advertising costs at Qdoba due to the timing of promotional activities and a $1.2 million decrease in pension and postretirement benefits related to the sunsetting of the company's qualified pension plan on December 31, 2015. In addition, mark-to-market adjustments on investments supporting the company’s non-qualified retirement plans positively impacted SG&A by $0.2 million in the fourth quarter of 2016 as compared to a negative impact of $1.1 million in the fourth quarter of 2015, resulting in a year-over-year decrease in SG&A of $1.3 million. These decreases were partially offset by the impact of the 53rd week.

Interest expense, net, increased by $3.5 million in the fourth quarter due to increased leverage and a higher effective interest rate for 2016.

Capital Allocation

The company repurchased approximately 425,000 shares of its common stock in the fourth quarter of 2016 at an average price of $98.42 per share for an aggregate cost of $41.9 million. During fiscal year 2016, the company repurchased approximately 3,876,000 shares at an average price of $75.29 per share, for an aggregate cost of $291.9 million. As of the end of fiscal year 2016, the company had $408.2 million remaining under stock-buyback programs authorized by its Board of Directors, of which $108.2 million expires in November 2017 and $300.0 million expires in November 2018.

As previously disclosed, the company made an accelerated pension contribution of $80 million during the fourth quarter of 2016. This tax-deductible contribution will decrease the company's future G&A costs, as well as reduce, if not fully eliminate, pension contributions over the next several years.

In addition, the company acquired 14 franchised Qdoba restaurants in one market during the fourth quarter of 2016 for approximately $20 million.

The company also announced today that on November 17, 2016, its Board of Directors declared a quarterly cash dividend of $0.40 per share on the company’s common stock, representing a 33 percent increase from the previous quarterly dividend of $0.30 per share. The dividend is payable on December 16, 2016, to shareholders of record at the close of business on December 5, 2016.

Guidance

The following guidance and underlying assumptions reflect the company’s current expectations for the first quarter and fiscal year ending October 1, 2017. Fiscal 2017 is a 52-week year, with 16 weeks in the first quarter, 12 weeks in each of the second, third and fourth quarters. Fiscal 2016 was a 53-week year, with the additional week occurring in the fourth quarter.

First quarter fiscal year 2017 guidance

  • Same-store sales increase of approximately 2.0 to 4.0 percent at Jack in the Box system restaurants versus a 1.4 percent increase in the year-ago quarter.
  • Same-store sales of approximately flat to up 1.0 percent at Qdoba company restaurants versus a 1.5 percent increase in the year-ago quarter.

Fiscal year 2017 guidance

  • Same-store sales increase of approximately 2.0 to 3.0 percent at Jack in the Box system restaurants.
  • Same-store sales increase of approximately 2.0 to 3.0 percent at Qdoba company restaurants.
  • Commodity deflation of approximately flat to down 1 percent for both Jack in the Box and Qdoba.
  • Consolidated restaurant operating margin of approximately 20.0 to 21.0 percent.
  • SG&A as a percentage of revenues of approximately 11.0 to 11.5 percent as compared to 12.7 percent in fiscal 2016.
  • Impairment and other charges as a percentage of revenues of approximately 70 basis points, excluding restructuring charges.
  • Approximately 20 to 25 new Jack in the Box restaurants opening system-wide, the majority of which will be franchise locations.
  • Approximately 60 to 70 new Qdoba restaurants, of which approximately 40 are expected to be company locations.
  • Capital expenditures of $105 to $115 million.

Tax rate of approximately 38 percent.

Operating earnings per share, which the company defines as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising, ranging from $4.55 to $4.75. This guidance assumes share repurchases of approximately $408 million during the year, representing the amount remaining under current Board authorizations.

Conference call

The company will host a conference call for financial analysts and investors on Tuesday, November 22, 2016, beginning at 8:30 a.m. PT (11:30 a.m. ET). The conference call will be broadcast live over the Internet via the Jack in the Box Inc. corporate website. To access the live call through the Internet, log onto the Investors section of the Jack in the Box Inc. website at http://investors.jackinthebox.com at least 15 minutes prior to the event in order to download and install any necessary audio software. A replay of the call will be available through the Jack in the Box Inc. corporate website for 21 days, beginning at approximately 11:30 a.m. PT on November 22.

About Jack in the Box Inc.

Jack in the Box Inc. (NASDAQ: JACK), based in San Diego, is a restaurant company that operates and franchises Jack in the Box® restaurants, one of the nation’s largest hamburger chains, with more than 2,200 restaurants in 21 states and Guam. Additionally, through a wholly owned subsidiary, the company operates and franchises Qdoba Mexican Eats®, a leader in fast-casual dining, with approximately 700 restaurants in 47 states, the District of Columbia and Canada. For more information on Jack in the Box and Qdoba, including franchising opportunities, visit www.jackinthebox.com or www.qdoba.com.

Safe harbor statement

This press release contains forward-looking statements within the meaning of the federal securities laws. Such statements are subject to substantial risks and uncertainties. A variety of factors could cause the company’s actual results to differ materially from those expressed in the forward-looking statements, including the following: the success of new products and marketing initiatives; the impact of competition, unemployment, trends in consumer spending patterns and commodity costs; the company's ability to reduce G&A; the company's ability to execute its refranchising strategy; the company’s ability to achieve and manage its planned growth, which is affected by the availability of a sufficient number of suitable new restaurant sites, the performance of new restaurants, and risks relating to expansion into new markets; litigation risks; food safety incidents or negative publicity impacting the reputations of the company's brands; and stock market volatility. These and other factors are discussed in the company’s annual report on Form 10-K and its periodic reports on Form 10-Q filed with the Securities and Exchange Commission which are available online at http://investors.jackinthebox.com or in hard copy upon request. The company undertakes no obligation to update or revise any forward-looking statement, whether as the result of new information or otherwise.

JACK IN THE BOX INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS
(Unaudited)

Operating earnings per share, a non-GAAP measure, is defined by the company as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising. Management believes this non-GAAP financial measure provides important supplemental information to assist investors in analyzing the performance of the company’s core business. In addition, the company uses operating earnings per share in establishing performance goals for purposes of executive compensation. The company encourages investors to rely upon its GAAP numbers but includes this non-GAAP financial measure as a supplemental metric to assist investors. This non-GAAP financial measure should not be considered as a substitute for, or superior to, financial measures calculated in accordance with GAAP. In addition, this non-GAAP financial measure used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Below is a reconciliation of non-GAAP operating earnings per share to the most directly comparable GAAP measure, diluted earnings per share from continuing operations. Figures may not add due to rounding.

 

JACK IN THE BOX INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

(Unaudited)

 
   

13 Weeks
Ended

 

12 Weeks
Ended

 

53 Weeks
Ended

 

52 Weeks
Ended

    October 2,
2016
  September 27,
2015
  October 2,
2016
  September 27,
2015
Revenues:                
Company restaurant sales   $ 300,693     $ 265,408     $ 1,204,535     $ 1,156,863  
Franchise rental revenues   57,689     52,666     232,907     226,702  
Franchise royalties and other   40,037     35,994     161,889     156,752  
    398,419     354,068     1,599,331     1,540,317  
Operating costs and expenses, net:                
Company restaurant costs:                
Food and packaging   90,200     82,198     363,002     361,988  
Payroll and employee benefits   83,516     71,654     334,470     313,302  
Occupancy and other   67,814     58,421     264,158     246,023  
Total company restaurant costs   241,530     212,273     961,630     921,313  
Franchise occupancy expenses   41,677     39,281     170,152     170,102  
Franchise support and other costs   3,568     3,773     15,991     15,688  
Selling, general and administrative expenses   48,281     54,592     203,816     221,145  
Impairment and other charges, net   4,459     3,689     19,057     11,757  
(Gains) losses on the sale of company-operated restaurants   (6 )   (1,214 )   (1,230 )   3,139  
    339,509     312,394     1,369,416     1,343,144  
Earnings from operations   58,910     41,674     229,915     197,173  
Interest expense, net   8,382     4,866     31,081     18,803  
Earnings from continuing operations and before income taxes   50,528     36,808     198,834     178,370  
Income taxes   17,967     13,030     72,564     65,769  
Earnings from continuing operations   32,561     23,778     126,270     112,601  
Losses from discontinued operations, net of income tax benefit   (580 )   (637 )   (2,197 )   (3,789 )
Net earnings   $ 31,981     $ 23,141     $ 124,073     $ 108,812  
                 
Net earnings per share - basic:                
Earnings from continuing operations   $ 1.00     $ 0.66     $ 3.74     $ 3.00  
Losses from discontinued operations   (0.02 )   (0.02 )   (0.07 )   (0.10 )
Net earnings per share (1)   $ 0.98     $ 0.64     $ 3.68     $ 2.89  
Net earnings per share - diluted:                
Earnings from continuing operations   $ 0.98     $ 0.65     $ 3.70     $ 2.95  
Losses from discontinued operations   (0.02 )   (0.02 )   (0.06 )   (0.10 )
Net earnings per share (1)   $ 0.97     $ 0.63     $ 3.63     $ 2.85  
                 
Weighted-average shares outstanding:                
Basic   32,694     36,276     33,735     37,587  
Diluted   33,085     36,822     34,146     38,215  
                 
Cash dividends declared per common share   $ 0.30     $ 0.30     $ 1.20     $ 1.00  
                                 

 

____________________________

(1)

 

  Earnings per share may not add due to rounding.
       

 

 

JACK IN THE BOX INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

 
    October 2,
2016
  September 27,
2015
ASSETS        
Current assets:        
Cash   $ 17,030     $ 17,743  
Accounts and other receivables, net   73,360     47,975  
Inventories   8,229     7,376  
Prepaid expenses   40,398     16,240  
Assets held for sale   14,259     15,516  
Other current assets   2,129     3,106  
Total current assets   155,405     107,956  
Property and equipment, at cost:        
Land   117,166     112,991  
Buildings   1,116,244     1,091,237  
Restaurant and other equipment   331,644     315,235  
Construction in progress   40,522     43,914  
    1,605,576     1,563,377  
Less accumulated depreciation and amortization   (886,526 )   (835,114 )
Property and equipment, net   719,050     728,263  
Intangible assets, net   14,042     14,765  
Goodwill   166,046     149,027  
Other assets, net   294,248     303,968  
    $ 1,348,791     $ 1,303,979  
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY        
Current liabilities:        
Current maturities of long-term debt   $ 57,574     $ 26,677  
Accounts payable   40,736     32,137  
Accrued liabilities   181,250     170,575  
Total current liabilities   279,560     229,389  
Long-term debt, net of current maturities   937,512     688,579  
Other long-term liabilities   348,925     370,058  
Stockholders’ (deficit) equity:        
Preferred stock $0.01 par value, 15,000,000 shares authorized, none issued        
Common stock $0.01 par value, 175,000,000 shares authorized, 81,598,524 and 81,096,156 issued, respectively   816     811  
Capital in excess of par value   432,564     402,986  
Retained earnings   1,399,721     1,316,119  
Accumulated other comprehensive loss   (187,021 )   (132,530 )
Treasury stock, at cost, 49,190,992 and 45,314,529 shares, respectively   (1,863,286 )   (1,571,433 )
Total stockholders’ (deficit) equity   (217,206 )   15,953  
    $ 1,348,791     $ 1,303,979  
                 

 

 

JACK IN THE BOX INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 
   

53 Weeks
Ended

 

52 Weeks
Ended

    October 2,
2016
  September 27,
2015
Cash flows from operating activities:        
Net earnings   $ 124,073     $ 108,812  
Adjustments to reconcile net earnings to net cash provided by operating activities:        
Depreciation and amortization   92,844     89,468  
Deferred finance cost amortization   2,736     2,309  
Excess tax benefits from share-based compensation arrangements   (7,461 )   (18,602 )
Deferred income taxes   34,973     (3,191 )
Share-based compensation expense   11,455     12,420  
Pension and postretirement expense   13,484     18,749  
Gains on cash surrender value of company-owned life insurance   (5,365 )   1,240  
(Gains) losses on the sale of company-operated restaurants   (1,230 )   3,139  
Losses on the disposition of property and equipment   2,654     1,847  
Impairment charges and other   4,759     6,815  
Changes in assets and liabilities:        
Accounts and other receivables   (28,181 )   (82 )
Inventories   (713 )   105  
Prepaid expenses and other current assets   (15,367 )   35,255  
Accounts payable   2,225     2,281  
Accrued liabilities   8,662     798  
Pension and postretirement contributions   (101,052 )   (25,374 )
Other   (4,314 )   (9,114 )
Cash flows provided by operating activities   134,182     226,875  
Cash flows from investing activities:        
Purchases of property and equipment   (96,615 )   (86,226 )
Purchases of assets intended for sale and leaseback   (9,785 )   (10,396 )
Proceeds from the sale and leaseback of assets   17,123      
Proceeds from the sale of company-operated restaurants   1,439     3,951  
Collections on notes receivable   3,555     5,917  
Acquisition of franchise-operated restaurants   (19,816 )    
Other   (299 )   2,281  
Cash flows used in investing activities   (104,398 )   (84,473 )
Cash flows from financing activities:        
Borrowings on revolving credit facilities   705,000     857,000  
Repayments of borrowings on revolving credit facilities   (817,578 )   (768,000 )
Proceeds from issuance of debt   417,578     300,000  
Principal repayments on debt   (26,154 )   (198,397 )
Debt issuance costs   (2,385 )   (2,030 )
Dividends paid on common stock   (40,295 )   (37,390 )
Proceeds from issuance of common stock   10,564     15,170  
Repurchases of common stock   (284,645 )   (320,163 )
Excess tax benefits from share-based compensation arrangements   7,461     18,602  
Cash flows used in financing activities   (30,454 )   (135,208 )
Effect of exchange rate changes on cash   (43 )   (29 )
Net (decrease) increase in cash   (713 )   7,165  
Cash at beginning of period   17,743     10,578  
Cash at end of period   $ 17,030     $ 17,743  
 

 

JACK IN THE BOX INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION

The following table presents certain income and expense items included in our consolidated statements of earnings as a percentage of total revenues, unless otherwise indicated. Percentages may not add due to rounding.

 

CONSOLIDATED STATEMENTS OF EARNINGS DATA

(Unaudited)

 
   

13 Weeks
Ended

 

12 Weeks
Ended

 

53 Weeks
Ended

 

52 Weeks
Ended

    October 2,
2016
  September 27,
2015
  October 2,
2016
  September 27,
2015
Revenues:                
Company restaurant sales   75.5 %   75.0 %   75.3 %   75.1 %
Franchise rental revenues   14.5 %   14.9 %   14.6 %   14.7 %
Franchise royalties and other   10.0 %   10.2 %   10.1 %   10.2 %
Total revenues   100.0 %   100.0 %   100.0 %   100.0 %
Operating costs and expenses, net:                
Company restaurant costs:                
Food and packaging (1)   30.0 %   31.0 %   30.1 %   31.3 %
Payroll and employee benefits (1)   27.8 %   27.0 %   27.8 %   27.1 %
Occupancy and other (1)   22.6 %   22.0 %   21.9 %   21.3 %
Total company restaurant costs (1)   80.3 %   80.0 %   79.8 %   79.6 %
Franchise occupancy expenses (2)   72.2 %   74.6 %   73.1 %   75.0 %
Franchise support and other costs (3)   8.9 %   10.5 %   9.9 %   10.0 %
Selling, general and administrative expenses   12.1 %   15.4 %   12.7 %   14.4 %
Impairment and other charges, net   1.1 %   1.0 %   1.2 %   0.8 %
(Gains) losses on the sale of company-operated restaurants   0.0 %   (0.3 )%   (0.1 )%   0.2 %
Earnings from operations   14.8 %   11.8 %   14.4 %   12.8 %
Income tax rate (4)   35.6 %   35.4 %   36.5 %   36.9 %
 

 

____________________________
(1)     As a percentage of company restaurant sales.
(2)     As a percentage of franchise rental revenues.
(3)     As a percentage of franchise royalties and other.
(4)     As a percentage of earnings from continuing operations and before income taxes.
       

The following table presents Jack in the Box and Qdoba company restaurant sales, costs and margin, and restaurant costs and margin as a percentage of the related sales. Percentages may not add due to rounding.

 

SUPPLEMENTAL COMPANY RESTAURANT OPERATIONS DATA

(Dollars in thousands)

(Unaudited)

 
    13 Weeks Ended   12 Weeks Ended   53 Weeks Ended   52 Weeks Ended
    October 2, 2016   September 27, 2015   October 2, 2016   September 27, 2015
Jack in the Box:                                
Company restaurant sales   $ 193,639         $ 176,739         $ 789,040         $ 782,525      
Company restaurant costs:                                
Food and packaging   56,396     29.1 %   55,025     31.1 %   235,538     29.9 %   247,931     31.7 %
Payroll and employee benefits   55,275     28.5 %   48,371     27.4 %   223,019     28.3 %   215,598     27.6 %
Occupancy and other   41,347     21.4 %   37,484     21.2 %   162,869     20.6 %   157,281     20.1 %
Total company restaurant costs   153,018     79.0 %   140,880     79.7 %   621,426     78.8 %   620,810     79.3 %
Restaurant margin   $ 40,621     21.0 %   $ 35,859     20.3 %   $ 167,614     21.2 %   $ 161,715     20.7 %
Qdoba:                                
Company restaurant sales   $ 107,054         $ 88,669         $ 415,495         $ 374,338      
Company restaurant costs:                                
Food and packaging   33,804     31.6 %   27,173     30.6 %   127,464     30.7 %   114,057     30.5 %
Payroll and employee benefits   28,241     26.4 %   23,283     26.3 %   111,451     26.8 %   97,704     26.1 %
Occupancy and other   26,467     24.7 %   20,937     23.6 %   101,289     24.4 %   88,742     23.7 %
Total company restaurant costs   88,512     82.7 %   71,393     80.5 %   340,204     81.9 %   300,503     80.3 %
Restaurant margin   $ 18,542     17.3 %   $ 17,276     19.5 %   $ 75,291     18.1 %   $ 73,835     19.7 %
 

The following table presents franchise revenues, costs and margin in each period:

 

SUPPLEMENTAL FRANCHISE OPERATIONS DATA

(Dollars in thousands)

(Unaudited)

 
   

13 Weeks
Ended

 

12 Weeks
Ended

 

53 Weeks
Ended

 

52 Weeks
Ended

    October 2,
2016
  September 27,
2015
  October 2,
2016
  September 27,
2015
Franchise rental revenues   $ 57,689     $ 52,666     $ 232,907     $ 226,702  
                 
Royalties   39,176     35,100     158,514     152,759  
Franchise fees and other   861     894     3,375     3,993  
Franchise royalties and other   40,037     35,994     161,889     156,752  
Total franchise revenues   97,726     88,660     394,796     383,454  
                 
Rental expense   34,025     31,638     137,808     136,974  
Depreciation and amortization   7,652     7,643     32,344     33,128  
Franchise occupancy expenses   41,677     39,281     170,152     170,102  
Franchise support and other costs   3,568     3,773     15,991     15,688  
Total franchise costs   45,245     43,054     186,143     185,790  
Franchise margin   $ 52,481     $ 45,606     $ 208,653     $ 197,664  
Franchise margin as a % of franchise revenues   53.7 %   51.4 %   52.9 %   51.5 %
                         

The following table provides information related to our operating segments in each period:

 

SUPPLEMENTAL SEGMENT REPORTING INFORMATION

(In thousands)

(Unaudited)

 
   

13 Weeks
Ended

 

12 Weeks
Ended

 

53 Weeks
Ended

 

52 Weeks
Ended

    October 2,
2016
  September 27,
2015
  October 2,
2016
  September 27,
2015
Revenues by segment:                
Jack in the Box restaurant operations   $ 286,120     $ 260,442     $ 1,162,258     $ 1,145,176  
Qdoba restaurant operations   112,299     93,626     437,073     395,141  
Consolidated revenues   $ 398,419     $ 354,068     $ 1,599,331     $ 1,540,317  
Earnings from operations by segment:                
Jack in the Box restaurant operations   $ 71,982     $ 57,707     $ 290,346     $ 265,230  
Qdoba restaurant operations   13,718     9,999     47,250     47,264  
Shared services and unallocated costs   (26,796 )   (27,246 )   (108,911 )   (112,182 )
Gains (losses) on the sale of company-operated restaurants   6     1,214     1,230     (3,139 )
Consolidated earnings from operations   58,910     41,674     229,915     197,173  
Interest expense, net   8,382     4,866     31,081     18,803  
Consolidated earnings from continuing operations and before income taxes   $ 50,528     $ 36,808     $ 198,834     $ 178,370  
Total depreciation expense by segment:                
Jack in the Box restaurant operations   $ 15,878     $ 15,546     $ 66,287     $ 64,597  
Qdoba restaurant operations   4,903     3,924     19,306     17,103  
Shared services and unallocated costs   1,553     1,633     6,489     7,078  
Consolidated depreciation expense   $ 22,334     $ 21,103     $ 92,082     $ 88,778  
                                 

The following table summarizes the changes in the number and mix of Jack in the Box ("JIB") and Qdoba company and franchise restaurants in each fiscal year:

 

SUPPLEMENTAL RESTAURANT ACTIVITY INFORMATION

(Unaudited)

 
    2016   2015
    Company   Franchise   Total   Company   Franchise   Total
Jack in the Box:                        
Beginning of year   413     1,836     2,249     431     1,819     2,250  
New   4     12     16     2     16     18  
Refranchised   (1 )   1         (21 )   21      
Acquired from franchisees   1     (1 )       7     (7 )    
Closed       (10 )   (10 )   (6 )   (13 )   (19 )
End of period   417     1,838     2,255     413     1,836     2,249  
% of JIB system   18 %   82 %   100 %   18 %   82 %   100 %
Qdoba:                        
Beginning of year   322     339     661     310     328     638  
New   35     18     53     17     22     39  
Acquired from franchisees   14     (14 )                
Closed   (4 )   (11 )   (15 )   (5 )   (11 )   (16 )
End of period   367     332     699     322     339     661  
% of Qdoba system   53 %   47 %   100 %   49 %   51 %   100 %
Consolidated:                        
Total system end of period   784     2,170     2,954     735     2,175     2,910  
% of consolidated system   27 %   73 %   100 %   25 %   75 %   100 %
 

SOURCE Jack in the Box Inc.

Contacts:

Carol DiRaimo
Jack in the Box Inc.
Investor Relations
(858) 571-2407

Brian Luscomb
Jack in the Box Inc
Media Relations
(858) 571-2291

###

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Jack in the Box »

Jack in the Box Inc. (NASDAQ: JACK), based in San Diego, is a restaurant company that operates and franchises Jack in the Box® restaurants, one of the nation's largest hamburger chains, with more than 2,200 restaurants in 21 states and Guam.

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