Jack In The Box Stock Gains Post Q3 Top-Line Beat

  • Jack In The Box Inc JACK reported third-quarter FY22 sales growth of 47.8% year-on-year to $398.31 million, beating the consensus of $397.71 million.
  • Jack in the Box Systemwide sales fell 1.4% Y/Y, and System same-store sales decreased 0.6%. Company-operated same-store sales grew 3.5%, while Franchise same-store sales dropped 1%.
  • Jack in the Box restaurant-level margin was 15.8% versus 25.4% last year, driven by increases in food and packaging costs, wage inflation of 13.2%, and increases in utilities and maintenance and repair costs.
  • Del Taco same-store sales rose 3.5%. Systemwide sales increased 3.3%, driven by positive franchise and company-operated same-store sales results.
  • Selling, general and administrative expenses rose 83.9% Y/Y to $40.1 million.
  • The operating margin was 13%, and operating income for the quarter declined 23% to $51.8 million.
  • Operating EPS of $1.38 missed the consensus of $1.43. Adjusted EBITDA fell 7.4% Y/Y to $73.2 million.
  • The company held $92.9 million in cash and equivalents as of July 10, 2022. Cash flow provided by operating activities year-to-date totaled $103.8 million.
  • On August 5, 2022, the JACK board declared a cash dividend of 0.44 per common share, to be paid on September 9, 2022, to shareholders of record on August 24, 2022.
  • The company did not repurchase any shares in Q3 but plans to execute $25 million in share repurchases during Q4.
  • Outlook: Jack In The Box expects an FY22 restaurant-level margin of about 16% (previously ~17%).
  • Price Action: JACK shares are trading higher by 6.27% at $80.21 on the last check Wednesday.
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