Jack in the Box same-store sales of (2.5%);
Del Taco same-store sales of (1.4%)
Jack in the Box systemwide sales of (1.6%);
Del Taco systemwide sales of (1.3%)
Diluted EPS of $1.26; Operating EPS of
$1.46
Jack in the Box restaurant level margin of
23.6%, up 2.2% from prior year
Jack in the Box signed franchise development
agreements in Q2 to enter Tallahassee and expand in Orlando; now
has 31 restaurant commitments in Florida
Del Taco signed franchisee development
agreements in Q2 for 3 restaurants to enter Greensboro, NC, and 10
additional restaurants in Atlanta
Jack in the Box new-market restaurants
opened in the past 12 months, which now includes Mexico, averaging
almost $100k weekly AUV
Jack in the Box Inc. (NASDAQ: JACK) announced financial
results for the Jack in the Box and Del Taco brands in the second
quarter, ended April 14, 2024.
"I am proud of the execution by our Jack and Del Taco teams,
delivering better-than-expected earnings and margin performance
while navigating through increasing macro headwinds, pressure on
low-income consumers and the implementation of California's minimum
wage legislation," said Darin Harris, Jack in the Box Chief
Executive Officer. "Top-line performance was impacted by the shift
in consumer behavior and an unexpected delay in our Smashed Jack
launch, but sales have improved since its introduction in
mid-March. We have a clear plan to regain same store sales traction
through a strong marketing calendar, new LTO's, and an expanded
value menu throughout the remainder of 2024. I remain confident in
our long-term strategy to drive sales, margin expansion, and new
unit and market openings — as do our franchisees, who continue to
grow our development pipeline and invest in the expansion of our
brands."
Jack in the Box
Performance
Same-store sales decreased 2.5% in the second quarter, comprised
of franchise same-store sales decline of 2.6% and company-owned
same-store sales decline of 0.6%. Both franchise and company-owned
restaurants experienced declines in transactions, partially offset
by a lift in average check. Systemwide sales for the second quarter
decreased 1.6%.
Restaurant-Level Margin(1), a non-GAAP measure, was $23.3
million, or 23.6%, up from $20.4 million, or 21.4%, a year ago
driven primarily by additional company-owned restaurants and
commodity deflation.
Franchise-Level Margin(1), a non-GAAP measure, was $71.7
million, or 40.4%, a decrease from $73.9 million, or 41.2%, a year
ago. The decrease was mainly driven by the decline in sales for the
quarter and the resulting decrease in rent and royalty revenue.
Jack in the Box net restaurant count increased in the second
quarter, with three restaurant openings and no restaurant closures.
As of the second quarter, and since the launch of the development
program in mid-2021, the company currently has 93 signed agreements
for a total of 409 restaurants. Under these agreements, 44
restaurants have opened, leaving 365 remaining for future
development.
Jack in the Box Same-Store
Sales:
12 Weeks Ended
April 14, 2024
April 16, 2023
Company
(0.6
%)
10.8
%
Franchise
(2.6
%)
9.4
%
System
(2.5
%)
9.5
%
Jack in the Box Restaurant Counts:
2024
2023
Company
Franchise
Total
Company
Franchise
Total
Restaurant count at Q1'24
144
2,048
2,192
140
2,046
2,186
New
—
3
3
—
2
2
Closed
—
—
—
—
(1
)
(1
)
Restaurant count at end of Q2'24
144
2,051
2,195
140
2,047
2,187
Q2 Net Restaurant Increase
—
3
3
YTD Net Restaurant Increase
1.4
%
0.3
%
0.4
%
Del Taco
Performance
Same-store sales decreased 1.4% in the second quarter, comprised
of franchise same-store sales decline of 1.1% and company-operated
same-store sales decline of 1.8%. Sales performance included
declines in transactions, partially offset by a lift in average
check. Systemwide sales for the fiscal second quarter decreased
1.3%.
Restaurant-Level Margin(1), a non-GAAP measure, was $11.4
million, or 16.8%, down from $18.5 million, or 17.3%, a year ago.
The decrease in margin dollars was due mainly to refranchising
restaurants, while the decrease in margin percentage was due to
increased costs for labor and utilities, partially offset by price
increases and commodity deflation.
Franchise-Level Margin(1), a non-GAAP measure, was $6.1 million,
or 28.9%, compared to $5.1 million, or 37.3%, a year ago. The
decrease in margin percentage was driven by the impact of a higher
franchise mix and the impact of the pass-thru rent and marketing
fees.
Del Taco expanded the restaurant count in the second quarter,
with three restaurant openings and no restaurant closings.
Del Taco Same-Store Sales:
12 Weeks Ended
April 14, 2024
April 16, 2023
Company
(1.8
%)
3.5
%
Franchise
(1.1
%)
2.8
%
System
(1.4
%)
3.2
%
Del Taco Restaurant Counts:
2024
2023
Company
Franchise
Total
Company
Franchise
Total
Restaurant count at Q4'23
179
413
592
273
319
592
New
—
3
3
—
3
3
Refranchised
(13
)
13
—
—
—
—
Restaurant count at end of Q2
166
429
595
273
322
595
Q2 Net Restaurant Increase/(Decrease)
(13
)
16
3
YTD Net Restaurant Increase/(Decrease)
(2.9
)%
1.9
%
0.5
%
Company-Wide
Performance
Second quarter diluted earnings per share was $1.26. Operating
Earnings Per Share(2), a non-GAAP measure, was $1.46 in the second
quarter of fiscal 2024 compared with $1.47 in the prior year
quarter.
Total revenues decreased 7.7% to $365.3 million, compared to
$395.7 million in the prior year quarter. The lower revenue is
primarily the result of the Del Taco refranchising efforts. Net
earnings was $25.0 million for the second quarter of fiscal 2024,
compared with $26.5 million for the second quarter of fiscal 2023.
Adjusted EBITDA(3), a non-GAAP measure, was $75.7 million in the
second quarter of fiscal 2024 compared with $80.6 million for the
prior year quarter.
Company-wide SG&A expense for the second quarter was $37.5
million, a decrease of $1.9 million compared to the prior year
quarter. The decrease was due primarily to lower incentive-based
compensation and lower advertising due to fewer company-owned
restaurants, partially offset by higher share-based compensation,
legal and technology costs. When excluding net COLI gains, G&A
was 2.5% of systemwide sales.
The income tax provisions reflect an effective tax rate of 26.5%
in the second quarter of 2024, as compared to 34.8% in the second
quarter of fiscal year 2023. The Non-GAAP Operating EPS tax rate
for the second quarter of 2024 was 27.1%.
(1) Restaurant-Level Margin and Franchise-Level Margin are
non-GAAP measures. These non-GAAP measures are reconciled to
earnings from operations, the most comparable GAAP measure, in the
attachment to this release. See "Reconciliation of Non-GAAP
Measurements to GAAP Results." (2) Operating Earnings Per Share
represents the diluted earnings per share on a GAAP basis,
excluding certain adjustments. See "Reconciliation of Non-GAAP
Measurements to GAAP Results." Operating earnings per share may not
add due to rounding. (3) Adjusted EBITDA represents net earnings on
a GAAP basis excluding certain adjustments. See "Reconciliation of
Non-GAAP Measurements to GAAP Results."
Capital
Allocation
The Company repurchased 0.2 million shares of our common stock
for an aggregate cost of $15.0 million in the second quarter. As of
the end of the second quarter, there was $210.0 million remaining
under the Board-authorized stock buyback program.
On May 10, 2024, the Board of Directors declared a cash dividend
of $0.44 per share, to be paid on June 25, 2024, to shareholders of
record as of the close of business on June 6, 2024. Future
dividends will be subject to approval by the Board of
Directors.
Guidance & Outlook
Updates
The following guidance and underlying assumptions reflect the
company’s current expectations for the fiscal year ending September
29, 2024. Any guidance measures not listed below remain the same as
provided on November 21, 2023.
FY 2024 Company-wide
Guidance
- Adjusted EBITDA of $325-$330 million (previously $325-$335
million)
- Operating EPS of $6.25-$6.40 (previously
$6.25-$6.50)
- Depreciation & Amortization of $60-$62 million
(previously $61-$63 million)
FY 2024 Jack in the Box
Segment Guidance
- Same Store Sales growth of Flat-to-Low Single Digits
(previously Low-to-Mid Single Digits)
- Company-Owned Restaurant Level Margin of 22-23% (previously
21-23%)
FY 2024 Del Taco Segment
Guidance
- Same Store Sales growth of Flat-to-Low Single Digits
(previously Low-to-Mid Single Digits)
- Franchise Level Margin of 27-29% (previously
29-31%)
Conference Call
The Company will host a conference call for analysts and
investors on Tuesday, May 14, 2024, beginning at 8:00 a.m. PT
(11:00 a.m. ET). The call will be webcast live via the Investors
section of the Jack in the Box company website at
http://investors.jackinthebox.com. A replay of the call will be
available through the Jack in the Box Inc. corporate website for 21
days. The call can be accessed via phone by dialing (800) 715-9871
and using ID 4115265.
About Jack in the Box Inc.
Jack in the Box Inc. (NASDAQ: JACK), founded and headquartered
in San Diego, California, is a restaurant company that operates and
franchises Jack in the Box®, one of the nation's largest hamburger
chains with approximately 2,200 restaurants across 22 states, and
Del Taco®, the second largest Mexican-American QSR chain by units
in the U.S. with approximately 600 restaurants across 16 states.
For more information on both brands, including franchising
opportunities, visit www.jackinthebox.com and www.deltaco.com.
Category: Earnings
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the federal securities laws. Forward-looking
statements may be identified by words such as “anticipate,”
“believe,” “estimate,” “expect,” “forecast,” “goals,” “guidance,”
“intend,” “plan,” “project,” “may,” “will,” “would” and similar
expressions. These statements are based on management’s current
expectations, estimates, forecasts and projections about our
business and the industry in which we operate. These estimates and
assumptions involve known and unknown risks, uncertainties, and
other factors that are in some cases beyond our control. Factors
that may cause our actual results to differ materially from any
forward-looking statements include, but are not limited to: the
success of new products, marketing initiatives and restaurant
remodels and drive-thru enhancements; 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, risks relating to expansion into new markets and
successful franchise development; the ability to attract, train and
retain top-performing personnel, litigation risks; risks associated
with disagreements with franchisees; supply chain disruption;
food-safety incidents or negative publicity impacting the
reputation of the company's brand; increased regulatory and legal
complexities, risks associated with the amount and terms of the
securitized debt issued by certain of our wholly owned
subsidiaries; 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
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS
(In thousands, except per
share data)
(Unaudited)
12 Weeks Ended
28 Weeks Ended
April 14, 2024
April 16, 2023
April 14, 2024
April 16, 2023
Revenues:
Company restaurant sales
$
167,098
$
202,604
$
391,138
$
472,795
Franchise rental revenues
85,826
83,520
199,022
192,350
Franchise royalties and other
55,084
53,982
128,414
130,372
Franchise contributions for advertising
and other services
57,339
55,638
134,271
127,323
365,347
395,744
852,845
922,840
Operating costs and expenses, net:
Food and packaging
45,914
59,310
110,046
141,243
Payroll and employee benefits
54,054
65,035
127,108
153,676
Occupancy and other
32,355
39,275
74,408
90,646
Franchise occupancy expenses
57,091
52,649
129,715
119,873
Franchise support and other costs
3,860
3,260
9,054
5,137
Franchise advertising and other services
expenses
59,523
58,143
139,757
132,713
Selling, general and administrative
expenses
37,520
39,405
83,885
89,547
Depreciation and amortization
13,906
14,598
32,379
34,000
Pre-opening costs
602
154
1,067
485
Other operating expenses (income), net
5,267
2,980
10,437
(2,521
)
Losses (gains) on the sale of
company-operated restaurants
1,065
(704
)
1,319
(4,529
)
311,157
334,105
719,175
760,270
Earnings from operations
54,190
61,639
133,670
162,570
Other pension and post-retirement
expenses, net
1,579
1,607
3,685
3,751
Interest expense, net
18,603
19,357
43,089
45,505
Earnings before income taxes
34,008
40,675
86,896
113,314
Income taxes
9,028
14,168
23,233
33,553
Net earnings
$
24,980
$
26,507
$
63,663
$
79,761
Net earnings per share:
Basic
$
1.27
$
1.28
$
3.22
$
3.83
Diluted
$
1.26
$
1.27
$
3.19
$
3.81
Weighted-average shares outstanding:
Basic
19,653
20,744
19,790
20,845
Diluted
19,785
20,864
19,949
20,946
Dividends declared per common share
$
0.44
$
0.44
$
0.88
$
0.88
JACK IN THE BOX INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
(Unaudited)
April 14, 2024
October 1, 2023
ASSETS
Current assets:
Cash
$
20,197
$
157,653
Restricted cash
28,780
28,254
Accounts and other receivables, net
102,664
99,678
Inventories
4,067
3,896
Prepaid expenses
8,020
16,911
Current assets held for sale
24,970
13,925
Other current assets
5,609
5,667
Total current assets
194,307
325,984
Property and equipment:
Property and equipment, at cost
1,267,469
1,258,589
Less accumulated depreciation and
amortization
(850,333
)
(846,559
)
Property and equipment, net
417,136
412,030
Other assets:
Operating lease right-of-use assets
1,414,559
1,397,555
Intangible assets, net
11,254
11,330
Trademarks
283,500
283,500
Goodwill
329,583
329,986
Other assets, net
248,636
240,707
Total other assets
2,287,532
2,263,078
$
2,898,975
$
3,001,092
LIABILITIES AND STOCKHOLDERS’
DEFICIT
Current liabilities:
Current maturities of long-term debt
$
30,049
$
29,964
Current operating lease liabilities
158,326
142,518
Accounts payable
82,336
84,960
Accrued liabilities
168,973
302,178
Total current liabilities
439,684
559,620
Long-term liabilities:
Long-term debt, net of current
maturities
1,712,360
1,724,933
Long-term operating lease liabilities, net
of current portion
1,279,443
1,265,514
Deferred tax liabilities
26,808
26,229
Other long-term liabilities
143,301
143,123
Total long-term liabilities
3,161,912
3,159,799
Stockholders’ deficit:
Preferred stock $0.01 par value,
15,000,000 shares authorized, none issued
—
—
Common stock $0.01 par value, 175,000,000
shares authorized, 82,776,086 and 82,645,814 issued,
respectively
828
826
Capital in excess of par value
528,887
520,076
Retained earnings
1,983,944
1,937,598
Accumulated other comprehensive loss
(50,944
)
(51,790
)
Treasury stock, at cost, 63,422,351 and
62,910,964 shares, respectively
(3,165,336
)
(3,125,037
)
Total stockholders’ deficit
(702,621
)
(718,327
)
$
2,898,975
$
3,001,092
JACK IN THE BOX INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year-to-date
April 14, 2024
April 16, 2023
Cash flows from operating activities:
Net earnings
$
63,663
$
79,761
Adjustments to reconcile net earnings to
net cash (used in) provided by operating activities:
Depreciation and amortization
32,379
34,000
Amortization of franchise tenant
improvement allowances and incentives
2,538
2,237
Deferred finance cost amortization
2,610
2,787
Excess tax (benefits) deficiency from
share-based compensation arrangements
(49
)
142
Deferred income taxes
(2,326
)
1,496
Share-based compensation expense
8,661
5,932
Pension and post-retirement expense
3,685
3,751
Gains on cash surrender value of
company-owned life insurance
(7,949
)
(8,007
)
Losses (gains) on the sale of
company-operated restaurants
1,319
(4,529
)
Gains on acquisition of restaurants
(2,357
)
—
Losses (gains) on the disposition of
property and equipment, net
1,148
(8,615
)
Impairment charges and other
1,580
549
Changes in assets and liabilities,
excluding acquisitions:
Accounts and other receivables
815
(1,456
)
Inventories
(170
)
(23
)
Prepaid expenses and other current
assets
9,299
6,344
Operating lease right-of-use assets and
lease liabilities
9,392
8,561
Accounts payable
(396
)
(15,994
)
Accrued liabilities
(123,532
)
(7,043
)
Pension and post-retirement
contributions
(3,288
)
(3,234
)
Franchise tenant improvement allowance and
incentive disbursements
(1,460
)
(2,052
)
Other
(1,583
)
(499
)
Cash flows (used in) provided by operating
activities
(6,021
)
94,108
Cash flows from investing activities:
Purchases of property and equipment
(61,071
)
(37,196
)
Proceeds from the sale of property and
equipment
1,500
23,371
Proceeds from the sale and leaseback of
assets
1,728
3,673
Proceeds from the sale of company-operated
restaurants
1,989
18,417
Other
—
1,465
Cash flows (used in) provided by investing
activities
(55,854
)
9,730
Cash flows from financing activities:
Repayments of borrowings on revolving
credit facilities
—
(50,000
)
Principal repayments on debt
(14,818
)
(15,088
)
Dividends paid on common stock
(17,167
)
(18,218
)
Proceeds from issuance of common stock
2
—
Repurchases of common stock
(40,000
)
(32,621
)
Payroll tax payments for equity award
issuances
(3,072
)
(1,115
)
Cash flows used in financing
activities
(75,055
)
(117,042
)
Net decrease in cash and restricted
cash
(136,930
)
(13,204
)
Cash and restricted cash at beginning of
period
185,907
136,040
Cash and restricted cash at end of
period
$
48,977
$
122,836
JACK IN THE BOX INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
The following table presents certain income and expense items
included in our condensed consolidated statements of earnings as a
percentage of total revenues, unless otherwise indicated.
Percentages may not add due to rounding.
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS DATA
(Unaudited)
12 Weeks Ended
28 Weeks Ended
April 14, 2024
April 16, 2023
April 14, 2024
April 16, 2023
Revenues:
Company restaurant sales
45.7
%
51.2
%
45.9
%
51.2
%
Franchise rental revenues
23.5
%
21.1
%
23.3
%
20.8
%
Franchise royalties and other
15.1
%
13.6
%
15.1
%
14.1
%
Franchise contributions for advertising
and other services
15.7
%
14.1
%
15.7
%
13.8
%
100.0
%
100.0
%
100.0
%
100.0
%
Operating costs and expenses, net:
Food and packaging (1)
27.5
%
29.3
%
28.1
%
29.9
%
Payroll and employee benefits (1)
32.3
%
32.1
%
32.5
%
32.5
%
Occupancy and other (1)
19.4
%
19.4
%
19.0
%
19.2
%
Franchise occupancy expenses (2)
66.5
%
63.0
%
65.2
%
62.3
%
Franchise support and other costs (3)
7.0
%
6.0
%
7.1
%
3.9
%
Franchise advertising and other services
expenses (4)
103.8
%
104.5
%
104.1
%
104.2
%
Selling, general and administrative
expenses
10.3
%
10.0
%
9.8
%
9.7
%
Depreciation and amortization
3.8
%
3.7
%
3.8
%
3.7
%
Pre-opening costs
0.2
%
0.0
%
0.1
%
0.1
%
Other operating expenses (income), net
1.4
%
0.8
%
1.2
%
(0.3
)%
Losses (gains) on the sale of
company-operated restaurants
0.3
%
(0.2
)%
0.2
%
(0.5
)%
Earnings from operations
14.8
%
15.6
%
15.7
%
17.6
%
Income tax rate (5)
26.5
%
34.8
%
26.7
%
29.6
%
____________________________
(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 franchise contributions
for advertising and other services.
(5)
As a percentage of earnings from
operations and before income taxes.
Jack in the Box systemwide sales (in
thousands):
12 Weeks Ended
28 Weeks Ended
April 14, 2024
April 16, 2023
April 14, 2024
April 16, 2023
Company-operated restaurant sales
$
98,927
$
95,489
$
230,984
$
221,631
Franchised restaurant sales (1)
911,265
931,257
2,138,015
2,140,239
Systemwide sales (1)
$
1,010,192
$
1,026,746
$
2,368,999
$
2,361,870
Del Taco systemwide sales (in
thousands):
12 Weeks Ended
28 Weeks Ended
April 14, 2024
April 16, 2023
April 14, 2024
April 16, 2023
Company-operated restaurant sales
$
68,171
$
107,115
$
160,154
$
251,164
Franchised restaurant sales (1)
154,854
118,896
353,330
264,994
Systemwide sales (1)
$
223,025
$
226,011
$
513,484
$
516,158
____________________________
(1)
Franchised restaurant sales represent
sales at franchised restaurants and are revenues of our
franchisees. Systemwide sales include company and franchised
restaurant sales. We do not record franchised sales as revenues;
however, our royalty revenues, marketing fees and percentage rent
revenues are calculated based on a percentage of franchised sales.
We believe franchised and systemwide restaurant sales information
is useful to investors as they have a direct effect on the
company's profitability.
JACK IN THE BOX INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS
(Unaudited)
To supplement the condensed consolidated financial statements,
which are presented in accordance with GAAP, the company uses the
following non-GAAP measures: Adjusted Net Income, Operating
Earnings Per Share, Adjusted EBITDA, Restaurant-Level Margin and
Franchise-Level Margin. Management believes that these
measurements, when viewed with the company's results of operations
in accordance with GAAP and the accompanying reconciliations in the
tables below, provide useful information about operating
performance and period-over-period changes, and provide additional
information that is useful for evaluating the operating performance
of the company's core business without regard to potential
distortions.
Operating Earnings Per Share
Operating Earnings Per Share represents diluted earnings per
share on a GAAP basis excluding acquisition, integration and
strategic initiatives, net COLI gains, pension and post-retirement
benefit costs, losses (gains) on the sale of company-operated
restaurants, excess tax (benefits) shortfall from share-based
compensation arrangements, and the tax-related impacts of the above
adjustments.
Operating Earnings Per Share should be considered as a
supplement to, not as a substitute for, analysis of results as
reported under U.S. GAAP or other similarly titled measures of
other companies. Management believes Operating Earnings Per Share
provides investors with a meaningful supplement of the company’s
operating performance and period-over-period changes without regard
to potential distortions.
Below is a reconciliation of Non-GAAP Adjusted Net Income to the
most directly comparable GAAP measure of net income. Also below is
a reconciliation of Non-GAAP Operating Earnings Per Share to the
most directly comparable GAAP measure, diluted earnings per
share:
12 Weeks Ended
April 14, 2024
April 16, 2023
Net income, as reported
$
24,980
$
26,507
Acquisition, integration, and strategic
initiatives (1)
4,268
1,259
Net COLI gains (2)
(1,232
)
(844
)
Pension and post-retirement benefit costs
(3)
1,579
1,607
Losses (gains) on the sale of
company-operated restaurants (4)
1,065
(704
)
Excess tax (benefits) shortfall from
share-based compensation arrangements
(38
)
—
Tax impact of adjustments (5)
(1,700
)
2,940
Non-GAAP Adjusted Net Income
$
28,922
$
30,765
Weighted-average shares outstanding -
diluted
19,785
20,864
Diluted earnings per share – GAAP
$
1.26
$
1.27
Acquisition, integration, and strategic
initiatives (1)
0.22
0.06
Net COLI gains (2)
(0.06
)
(0.04
)
Pension and post-retirement benefit costs
(3)
0.08
0.08
Losses (gains) on the sale of
company-operated restaurants
0.05
(0.03
)
Excess tax (benefits) shortfall from
share-based compensation arrangements
0.00
—
Tax impact of adjustments (4)
(0.09
)
0.13
Operating Earnings Per Share – non-GAAP
(5)
$
1.46
$
1.47
____________________
(1)
Acquisition, integration and strategic
initiatives reflect charges that are not part of our ongoing
operations, including consulting fees for discrete project-based
strategic initiatives that are not expected to recur in the
foreseeable future.
(2)
Net COLI gains reflect market-based
adjustments on the company-owned life insurance policies, net of
changes in our non-qualified deferred compensation obligation
supported by these policies.
(3)
Pension and post-retirement benefit costs
relating to our two legacy defined benefit pension plans, as well
as our two legacy post-retirement plans.
(4)
Tax impacts for the quarter calculated
based on the non-GAAP Operating EPS tax rate of 27.1% in the
current quarter and 26.7% in the prior year quarter.
(5)
Operating Earnings Per Share may not add
due to rounding.
Adjusted EBITDA
Adjusted EBITDA represents net earnings on a GAAP basis
excluding income taxes, interest expense, net, losses (gains) on
the sale of company-operated restaurants, other operating expenses
(income), net, depreciation and amortization, amortization of cloud
computing costs, amortization of favorable and unfavorable leases
and subleases, net, amortization of franchise tenant improvement
allowances and other, net COLI gains, and pension and
post-retirement benefit costs.
Adjusted EBITDA should be considered as a supplement to, not as
a substitute for, analysis of results as reported under U.S. GAAP
or other similarly titled measures of other companies. Management
believes Adjusted EBITDA is useful to investors to gain an
understanding of the factors and trends affecting the company's
ongoing cash earnings, from which capital investments are made and
debt is serviced.
Below is a reconciliation of non-GAAP Adjusted EBITDA to the
most directly comparable GAAP measure, net earnings (in
thousands):
12 Weeks Ended
April 14, 2024
April 16, 2023
Net earnings - GAAP
$
24,980
$
26,507
Income taxes
9,028
14,168
Interest expense, net
18,603
19,357
Losses (gains) on the sale of
company-operated restaurants
1,065
(704
)
Other operating expenses (income), net
(1)
5,267
2,980
Depreciation and amortization
13,906
14,598
Amortization of cloud-computing costs
(2)
1,274
1,094
Amortization of favorable and unfavorable
leases and subleases, net
107
826
Amortization of franchise tenant
improvement allowances and other
1,127
1,022
Net COLI gains (3)
(1,232
)
(844
)
Pension and post-retirement benefit costs
(4)
1,579
1,607
Adjusted EBITDA – non-GAAP
$
75,704
$
80,611
(1)
Other operating expense (income), net
includes: acquisition, integration and strategic initiatives; costs
of closed restaurants; operating restaurant impairment charges;
accelerated depreciation and gains/losses on disposition of
property and equipment, net.
(2)
Amortization of cloud computing costs
includes the amounts for the non-cash amortization of capitalized
implementation costs related to cloud-based software arrangements
that are included within selling, general and administrative
expenses.
(3)
Net COLI gains reflect market-based
adjustments on the company-owned life insurance policies, net of
changes in our non-qualified deferred compensation obligation
supported by these policies.
(4)
Pension and post-retirement benefit costs
relating to our two legacy defined benefit pension plans, as well
as the two legacy post-retirement plans.
Restaurant-Level Margin
Restaurant-Level Margin is defined as company restaurant sales
less restaurant operating costs (food and packaging, labor, and
occupancy costs) and is neither required by, nor presented in
accordance with GAAP. Restaurant-Level Margin excludes revenues and
expenses of our franchise operations and selling, general, and
administrative expenses. Certain other costs, such as depreciation
and amortization, other operating expenses (income), net, losses
(gains) on the sale of company-operated restaurants, and other
costs that are considered normal operating costs are excluded as
they are considered corporate-level shared service costs. As such,
Restaurant-Level Margin is not indicative of the overall results of
the company and does not accrue directly to the benefit of
shareholders because of the exclusion of corporate-level expenses.
Restaurant-Level Margin should be considered as a supplement to,
not as a substitute for, analysis of results as reported under GAAP
or other similarly titled measures of other companies. The company
is presenting Restaurant-Level Margin because it believes that it
provides a meaningful supplement to net earnings of the company's
core business operating results, as well as a comparison to those
of other similar companies. Management utilizes Restaurant-Level
Margin as a key performance indicator to evaluate the profitability
of company-operated restaurants.
Below is a reconciliation of non-GAAP Restaurant-Level Margin to
the most directly comparable GAAP measure, earnings from operations
(in thousands):
12 weeks ended April 14,
2024
Jack in the Box
Del Taco
Other (1)
Total
Earnings from operations - GAAP
$
84,980
$
9,039
$
(39,829
)
$
54,190
Franchise rental revenues
(79,618
)
(6,208
)
—
(85,826
)
Franchise royalties and other
(47,537
)
(7,547
)
—
(55,084
)
Franchise contributions for advertising
and other services
(50,179
)
(7,160
)
—
(57,339
)
Franchise occupancy expenses
50,849
6,242
—
57,091
Franchise support and other costs
2,757
1,103
—
3,860
Franchise advertising and other services
expenses
52,003
7,520
—
59,523
Selling, general and administrative
expenses
9,752
7,112
20,656
37,520
Depreciation and amortization
—
—
13,906
13,906
Pre-opening costs
322
280
—
602
Other operating expenses (income), net
—
—
5,267
5,267
Losses (gains) on the sale of
company-operated restaurants
—
1,065
—
1,065
Restaurant-Level Margin - Non-GAAP
$
23,329
$
11,446
$
—
$
34,775
Company restaurant sales
$
98,927
$
68,171
$
—
$
167,098
Restaurant-Level Margin % - Non-GAAP
23.6
%
16.8
%
N/A
20.8
%
12 weeks ended April 16,
2023
Jack in the Box
Del Taco
Other (1)
Total
Earnings from operations - GAAP
$
86,231
$
12,286
$
(36,878
)
$
61,639
Franchise rental revenues
(80,910
)
(2,610
)
—
(83,520
)
Franchise royalties and other
(48,071
)
(5,911
)
—
(53,982
)
Franchise contributions for advertising
and other services
(50,361
)
(5,277
)
—
(55,638
)
Franchise occupancy expenses
50,007
2,642
—
52,649
Franchise support and other costs
2,735
525
—
3,260
Franchise advertising and other services
expenses
52,660
5,483
—
58,143
Selling, general and administrative
expenses
8,959
11,146
19,300
39,405
Depreciation and amortization
—
—
14,598
14,598
Pre-opening costs
102
52
—
154
Other operating expenses (income), net
—
—
2,980
2,980
Losses (gains) on the sale of
company-operated restaurants
(904
)
200
—
(704
)
Restaurant-Level Margin - Non-GAAP
$
20,448
$
18,536
$
—
$
38,984
Company restaurant sales
$
95,489
$
107,115
$
—
$
202,604
Restaurant-Level Margin % - Non-GAAP
21.4
%
17.3
%
N/A
19.2
%
(1) The "Other" category includes shared services costs and
other unallocated costs
Franchise-Level Margin
Franchise-Level Margin is defined as franchise revenues less
franchise operating costs (occupancy expenses, advertising
contributions, and franchise support and other costs) and is
neither required by, nor presented in accordance with GAAP.
Franchise-Level Margin excludes revenue and expenses of our
company-operated restaurants and selling, general, and
administrative expenses. Certain other costs, such as depreciation
and amortization, other operating expenses (income), net, losses
(gains) on the sale of company-operated restaurants, and other
costs that are considered normal operating costs are excluded as
they are considered corporate-level shared service costs. As such,
Franchise-Level Margin is not indicative of the overall results of
the company and does not accrue directly to the benefit of
shareholders because of the exclusion of corporate-level expenses.
Franchise-Level Margin should be considered as a supplement to, not
as a substitute for, analysis of results as reported under GAAP or
other similarly titled measures of other companies. The company is
presenting Franchise-Level Margin because it believes that it
provides a meaningful supplement to net earnings of the company's
core business operating results, as well as a comparison to those
of other similar companies. Management utilizes Franchise-Level
Margin as a key performance indicator to evaluate the profitability
of our franchise operations.
Below is a reconciliation of non-GAAP Franchise-Level Margin to
the most directly comparable GAAP measure, earnings from operations
(in thousands):
12 weeks ended April 14,
2024
Jack in the Box
Del Taco
Other (1)
Total
Earnings from operations - GAAP
$
84,980
$
9,039
$
(39,829
)
$
54,190
Company restaurant sales
(98,927
)
(68,171
)
—
(167,098
)
Food and packaging
28,486
17,428
—
45,914
Payroll and employee benefits
30,294
23,760
—
54,054
Occupancy and other
16,818
15,537
—
32,355
Selling, general and administrative
expenses
9,752
7,112
20,656
37,520
Depreciation and amortization
—
—
13,906
13,906
Pre-opening costs
322
280
—
602
Other operating expenses (income), net
—
—
5,267
5,267
Losses (gains) on the sale of
company-operated restaurants
—
1,065
—
1,065
Franchise-Level Margin - Non-GAAP
$
71,725
$
6,050
$
—
$
77,775
Franchise rental revenues
$
79,618
$
6,208
$
—
$
85,826
Franchise royalties and other
47,537
7,547
—
55,084
Franchise contributions for advertising
and other services
50,179
7,160
—
57,339
Total franchise revenues
$
177,334
$
20,915
$
—
$
198,249
Franchise-Level Margin % - Non-GAAP
40.4
%
28.9
%
N/A
39.2
%
12 weeks ended April 16,
2023
Jack in the Box
Del Taco
Other (1)
Total
Earnings from operations - GAAP
$
86,231
$
12,286
$
(36,878
)
$
61,639
Company restaurant sales
(95,489
)
(107,115
)
—
(202,604
)
Food and packaging
29,841
29,468
—
59,309
Payroll and employee benefits
29,200
35,835
—
65,035
Occupancy and other
15,999
23,276
—
39,275
Selling, general and administrative
expenses
8,959
11,146
19,300
39,405
Depreciation and amortization
—
—
14,598
14,598
Pre-opening costs
102
52
—
154
Other operating expenses (income), net
—
—
2,980
2,980
Losses (gains) on the sale of
company-operated restaurants
(904
)
200
—
(704
)
Franchise-Level Margin - Non-GAAP
$
73,939
$
5,148
$
—
$
79,087
Franchise rental revenues
$
80,910
$
2,610
$
—
$
83,520
Franchise royalties and other
48,071
5,911
—
53,982
Franchise contributions for advertising
and other services
50,361
5,277
—
55,638
Total franchise revenues
$
179,342
$
13,798
$
—
$
193,140
Franchise-Level Margin % - Non-GAAP
41.2
%
37.3
%
N/A
40.9
%
(1) The "Other" category includes shared services costs and
other unallocated costs
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240514302540/en/
Chris Brandon Vice President, Investor Relations
chris.brandon@jackinthebox.com 619.902.0269
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