Industry News | July 31, 2001

Jack in the Box Inc. Reports 3Q Results

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Jack in the Box Inc. (NYSE: JBX), operator and franchiser of Jack in the Box® restaurants, today announced that net earnings increased 5.5 percent to $22 million, or 55 cents per diluted share in the third quarter ended July 8.

Year-to-date, net earnings have grown 12.1 percent to $64.2 million. "In spite of pressures from utilities and other occupancy costs, Jack in the Box continues to grow because of our commitment to providing customers with an ever-improving restaurant experience,'' said CEO Robert J. Nugent. "We remain focused on providing high-quality food and service, which is our brand promise.''

Company restaurant sales reached $407 million in the third quarter, improving 11.7 percent compared with the third quarter a year ago. Total revenues were $436 million, also an 11.7 percent improvement. Systemwide sales were nearly $502 million, up more than 10 percent compared with a year ago.

Same-store sales at company restaurants grew 4.3 percent on top of last year's third quarter improvement of 2.6 percent. The average check rose 3.8 percent during the quarter, while transactions were up one-half of one percent. It was the company's 26th consecutive quarter of same-store sales growth when compared with the same quarter in the prior year.

Restaurant operating margins were 19.1 percent of sales, a decline of 1.5 percent from last year's third quarter, due mostly to higher utility costs.

"We're disappointed that earnings aren't higher, but given the impact of the energy crisis on our operations and consumers, we're pleased with our sales results,'' Nugent said. "We continue to address utilities and other cost increases that are impacting earnings. Most important, however, is that our business fundamentals remain sound, and we continued to reach more customers during the quarter.''

Jack in the Box successfully introduced the Sourdough Grilled Chicken Club sandwich during the third quarter with a new advertisement from its international award-winning "Jack'' campaign. Said Nugent: "Our advertising continues to build our brand while enhancing sales for three core reasons: it speaks to our target customer, the frequent fast-food user; it promises a great restaurant experience; and we deliver on that promise with ever-improving product quality and service.''

The company also reported that its annual income tax rate estimate has been revised to about 35.5 percent, resulting in a three-cent per share benefit to the tax provision in the third quarter.

The company announced that it anticipated fourth-quarter earnings to reach between 53-57 cents per diluted share, with same-store sales slightly above third-quarter results.

During the quarter, Jack in the Box opened 28 new company restaurants for a total of 1,395 company restaurants. The company opened its first restaurant in Greenville/Spartanburg, S.C., a new southeastern market, in addition to Charlotte, Nashville and Baton Rouge.