Jack in the Box Q4 Earnings Top Estimates, Revenues Lag, Stock Down

Jack in the Box Inc. JACK reported mixed fourth-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line also declined year over year. Following the results, the company’s shares lost 3.3% in the after-hour trading session yesterday.

JACK’s Earnings & Revenues Details

In the fiscal fourth quarter, operating earnings per share (EPS) was $1.16, beating the Zacks Consensus Estimate of $1.11. The metric rose 5.5% from $1.10 per share reported in the prior-year quarter.

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Quarterly revenues of $349.3 million missed the consensus mark of $358 million. The top line declined 6.2% on a year-over-year basis.

Franchise rental revenues increased 1.5% year over year to $87.3 million. Franchise royalties and other revenues decreased 1.3% year over year to $54.5 million.

Franchise contributions to advertising and other services revenues rose 0.5% year over year to $56.1 million. Company restaurant sales in the quarter was $151.4 million compared with $175 million reported in the prior-year quarter.

JACK’s Comps Discussion

In the quarter under review, company-owned same-store sales declined 2.2% year over year against 4.4% growth reported in the prior-year quarter.

Same-store sales at franchised stores declined 2% year over year against 3.8% growth reported in the prior-year quarter.

Systemwide same-store sales fell 2.1% year over year against 3.9% growth reported in the year-ago quarter. Reduced transactions and an unfavorable mix shift caused this downside.

Del Taco Performance

In fourth-quarter fiscal 2024, company-owned same-store sales moved down 3% year over year, comprising the decline in franchise same-store and system-operated same-store sales of 4.2% and 3.9%, respectively.

Operating Highlights of JACKS

In the fiscal fourth quarter, the total restaurant-level adjusted margin was 15.1% compared with 18% reported in the prior-year quarter. The decline was attributed to reduced transactions and rising costs from inflation, including higher wages, commodity prices and utility expenses, partially offset by menu price increases.

Food and packaging costs (as a percentage of company restaurant sales) fell 80 basis points (bps) year over year to 28.4%.

The total franchise level margin was 38.9% in the fiscal fourth quarter compared with 39.2% reported in the prior-year quarter.

In the quarter under review, selling, general and administrative expenses accounted for 8.6% of total revenues compared with 11.7% in the prior-year quarter.

JACK’s Balance Sheet

As of Sept. 29, 2024, cash totaled $54.2 million compared with $185.9 million as of Oct. 1, 2023. Long-term debt (net of current maturities) totaled $1.69 billion as of Sept. 29, compared with $1.72 billion as of Oct. 1, 2023.

In the fiscal fourth quarter, the company repurchased 0.3 million shares. As of Sept. 29, management announced the availability of $180 million under its share repurchase program.

The company declared a cash dividend of 44 cents per share. The dividend will be paid out on Dec. 30, 2024, to its shareholders on record as of Dec. 12.

JACK’s Fiscal 2025 Outlook

For fiscal 2025, the company anticipates adjusted EBITDA to be in the range of $288-$303 million. Depreciation and Amortization expenses are anticipated to be between $58 million and $60 million.

Jack in the Box Restaurant Level Margin is expected to be 20-22%. The company expects same-store sales for Jack in the Box in the range of flat to up 1%, whereas for Del Taco segment this is expected to be flat to down 1%.

Company-wide operating EPS for fiscal 2024 is expected to be in the range of $5.05-$5.45.

Zacks Rank of JACK

JACK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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