Industry News | May 9, 2001

Jack in the Box Reports 2Q

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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 in the second quarter ended April 15 improved more than 13 percent to $18.2 million, or 46 cents per diluted share compared with the second quarter a year ago. Excluding unusual items in prior years, this second quarter is a new earnings record.

Company restaurant sales grew 12 percent in the second quarter to $389 million compared with the second quarter a year ago. Total revenues reached nearly $416 million, growing 12.2 percent. Systemwide sales reached $482 million, up 10.3 percent.

For the 25th consecutive quarter, same-store sales at company-operated restaurants improved compared with the same quarter in the previous year. The second quarter's 4.1 percent same-store sales improvement was comprised of a 3.7 percent increase in average check amounts and a four-tenths of one percent improvement in customer visits.

Restaurant operating margins declined 1.2 percentage points to 18.6 percent of sales in the second quarter compared with a year ago, primarily due to substantially higher utility costs, and to a lesser extent, labor.

"We continue to reach a growing number of customers, and our business fundamentals remain sound,'' noted chairman and CEO Robert J. Nugent.

"That said, as we reported earlier, rising utility costs will effect our fiscal 2001 results, which we expect to range from $2.15 to $2.25 per diluted share, with an estimated annual tax rate of 37 percent. In the third quarter, we anticipate earning a range of between 54-to-58 cents per diluted share,'' he added.

Nugent said the company was continuing its strategy to grow the Jack in the Box business by further improving same-store restaurant sales and through the addition of new, company-operated restaurants. Jack in the Box opened 26 new company restaurants during the second quarter for a total of 1,371 company restaurants. The company expects to open 130 new units during the fiscal year, including about 30 in its new, southeastern region. In addition, the first Jack in the Box restaurant is scheduled to open in the new Greenville/Spartanburg, S.C., market within 60 days.

Jack in the Box will continue its efforts to enhance the restaurant experience while managing costs, Nugent noted: "Training and other efforts are underway to improve speed of service, which we have reduced an average 30 seconds since the beginning of the fiscal year. The new Triple Ultimate Cheeseburger is generating substantial interest from our target customer, men 18-34 years of age. Menu boards, updated to further showcase combo meals, have led to higher check averages in test markets and will soon roll out systemwide. And, we are reducing our use of utilities through conservation efforts that don't adversely impact our operations. Overall, I'm pleased with our business and the long-term prospects for the Jack in the Box brand,'' Nugent said.

Founded in 1951, Jack in the Box is the nation's first major drive-thru hamburger chain. The company operates or franchises nearly 1,700 quick-serve restaurants in 16 states. Headquartered in San Diego, Jack in the Box has more than 41,000 employees and reported fiscal 2000 systemwide sales of nearly $2 billion.

The Jack in the Box Inc. quarterly conference call will be available live through the Internet at 8:30 a.m. PDT Wednesday, May 9. To access, log on to www.jackinthebox.com at least 15 minutes prior to the call. Individuals who are unable to hear the live broadcast can hear a playback of the call beginning at 10:30 a.m. PDT.