SAN DIEGO - November 17, 2015 - (BUSINESS WIRE) - Jack in the Box Inc. (NASDAQ: JACK) today reported earnings from continuing operations of $23.8 million, or $0.65 per diluted share, for the fourth quarter ended September 27, 2015, compared with earnings from continuing operations of $17.4 million, or $0.44 per diluted share, for the fourth quarter of fiscal 2014.
Fiscal 2015 earnings from continuing operations totaled $112.6 million, or $2.95 per diluted share, compared with $94.8 million, or $2.26 per diluted share in fiscal 2014.
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 $0.62 in the fourth quarter of fiscal 2015 compared with $0.54 in the prior year quarter. For fiscal year 2015, operating earnings per share were $3.00 compared with $2.45 last year.
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.
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Lenny Comma, chairman and chief executive officer, said, “We’re pleased with our fourth quarter performance, which culminated in a 15 percent increase in operating earnings per share resulting from solid same-store sales growth and margin expansion at both Jack in the Box® and Qdoba®. This performance capped another terrific year, with operating earnings per share up approximately 22 percent, the fourth consecutive year of growth in excess of 20 percent.
“We continued to use our growing free cash flow to return cash to shareholders with a 9 percent reduction in our diluted share count for the fiscal year. Over the last five years, we have repurchased $1 billion in stock. The additional $200 million share repurchase authorization we announced in September coupled with the 50 percent increase in our dividend announced in May underscores the confidence both the management team and our Board of Directors have in our business model and growth plans.”
Increase in same-store sales:
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“Jack in the Box system same-store sales increased 6.2 percent for the quarter, and company same-store sales increased 4.1 percent. Transactions grew approximately one percent for the system, while transactions at company restaurants declined approximately one percent as a result of a reduction in discounting as compared to last year. Sales were positive across all dayparts, with breakfast, dinner and late night performing similarly and generating the strongest growth,” Comma said.
Jack in the Box system same-store sales growth for the quarter exceeded that of the QSR sandwich segment by 3.5 percentage points for the comparable period, according to The NPD Group’s SalesTrack® Weekly for the 12-week time period ended September 27, 2015. Included in this segment are 16 of the top QSR sandwich and burger chains in the country.
“Qdoba same-store sales increased 6.6 percent system-wide and 6.1 percent for company restaurants in the fourth quarter, as the simplified menu pricing structure continued to drive average check growth. Our company performance also benefited from another quarter of double-digit growth in catering sales which was partially offset by a 0.3 percent decline in transactions,” Comma said.
Consolidated restaurant operating margin increased by 200 basis points to 20.0 percent of sales in the fourth quarter of 2015, compared with 18.0 percent of sales in the year-ago quarter. Restaurant operating margin for Jack in the Box company restaurants increased 250 basis points to 20.3 percent of sales. The improvement was due primarily to sales leverage, lower food and packaging costs, and the benefit of refranchising. The decrease in food and packaging costs as a percentage of sales resulted from the benefit of price increases, favorable product mix changes and lower discounting, as well as commodity deflation of approximately 0.8 percent in the quarter. Restaurant operating margin for Qdoba company restaurants increased 100 basis points to 19.5 percent of sales, due primarily to sales leverage, including the benefit of the simplified pricing structure introduced in October 2014, and commodity deflation of approximately 1.8 percent, which were partially offset by an increase in labor staffing.
Total franchise costs as a percentage of total franchise revenues improved to 48.6 percent in the fourth quarter from 50.5 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 increased by $3.0 million and was 15.4 percent of revenues as compared to 15.0 percent in the prior year quarter. The increase reflects a $1.2 million increase in pension expense and higher pre-opening costs of $0.9 million resulting from a greater number of Qdoba openings and restaurants under construction in the fourth quarter. Mark-to-market adjustments on investments supporting the company’s non-qualified retirement plans negatively impacted SG&A by $1.1 million in the fourth quarter of 2015 as compared to a negative impact of $1.5 million in the fourth quarter of 2014, resulting in a year-over-year decrease in SG&A of $0.4 million.
Impairment and other charges, net, increased by $1.4 million in the fourth quarter due primarily to charges relating to the replacement of beverage equipment.
Gains on the sale of company-operated restaurants were $1.2 million in the fourth quarter, or approximately $0.02 per diluted share, which resulted from additional proceeds received as a result of the extension of underlying franchise and lease agreements for previously refranchised Jack in the Box restaurants. This compares to a loss of $5.8 million or approximately $0.10 per diluted share in the fourth quarter of 2014 which related primarily to the sale of Jack in the Box restaurants in the Southeast.
The company repurchased approximately 797,000 shares of its common stock in the fourth quarter of 2015 at an average price of $82.22 per share for an aggregate cost of $65.5 million. During fiscal year 2015, the company repurchased approximately 3,743,000 shares at an average price of $84.71 per share, for an aggregate cost of $317.1 million. This essentially completed the $100 million stock-buyback program authorized by the company’s Board of Directors in May 2015. In September 2015, the company’s Board of Directors authorized an additional $200 million stock-buyback program that expires in November 2017.
The company also announced today that on November 12, 2015, its Board of Directors declared a quarterly cash dividend of $0.30 per share on the company’s common stock. The dividend is payable on December 22, 2015, to shareholders of record at the close of business on December 9, 2015.
The following guidance and underlying assumptions reflect the company’s current expectations for the first quarter and fiscal year ending October 2, 2016. Fiscal 2016 is a 53-week year, with 16 weeks in the first quarter, 12 weeks in each of the second and third quarters, and 13 weeks in the fourth quarter.
The company will host a conference call for financial analysts and investors on Wednesday, November 18, 2015, 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 18.
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 more than 600 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.
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 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; 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.
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JACK IN THE BOX INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(Unaudited)
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.
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The following table presents Jack in the Box and Qdoba company restaurant sales, costs and costs as a percentage of the related sales. Percentages may not add due to rounding.
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The following table presents the detail of our franchise revenues and costs (dollars in thousands):
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JACK IN THE BOX INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(Unaudited)
The following table summarizes the changes in the number and mix of Jack in the Box and Qdoba company and franchise restaurants in each fiscal year:
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SOURCE Jack in the Box Inc.
Carol DiRaimo
Jack in the Box Inc.
Investor Relations
858-571-2407
Brian Luscomb
Jack in the Box Inc.
Media Relations
858-571-2291
Jack in the Box Inc. (NASDAQ: JACK), based in San Diego, is a restaurant company that operates and franchises Jack in the Box® restaurants.