Jack in the Box Inc. today reported net earnings of $20.7 million, or 55 cents per diluted share, in the second quarter ended April 17, 2005, compared with $18.7 million, or 51 cents per diluted share, in the same quarter a year ago. Year to date, net earnings totaled $46.1 million, or $1.23 per diluted share, compared with $33.0 million, or 90 cents per diluted share, for the first half of fiscal 2004, which included a first-quarter after-tax charge to interest expense of $5.7 million, or 15 cents per diluted share, for costs related to refinancing the company’s credit facility.
The company also updated its earnings guidance for fiscal 2005 to approximately $2.46 per diluted share, compared with $2.43 per share previously forecast and $2.02 per share reported for fiscal 2004, which was a 53-week fiscal year. Excluding the 53rd week (+3 cents) and the refinancing charge (-15 cents), last year’s earnings per diluted share were $2.14.
“Our two new chicken ciabatta sandwiches were a hit with guests and contributed to a 3.1 percent increase in same-store sales for the quarter on top of an 8.2 percent increase last year,” says Robert Nugent, chairman and chief executive officer. “With a new instant-win game currently under way at Jack in the Box and two new ciabatta burgers slated for introduction at the end of May, we believe we will maintain our positive sales momentum in the second half of the fiscal year.”
The company’s second quarter initiatives included the addition of two new products: bruschetta chicken and classic chicken. In addition, the company began testing a new interior and exterior design for its Jack in the Box restaurants. The design enhancements are intended to create a more contemporary atmosphere and promote more in-restaurant dining. Approximately 50 restaurants will test the new designs in fiscal 2005, and assuming results are successful, the company expects to re-image approximately 200 restaurants each year thereafter.
“Developing innovative new products and enhancing our restaurant facilities are part of our holistic strategy to reinvent the Jack in the Box brand,” Nugent says. “Using the consumer research facilities at our new Innovation Center, along with extensive field research and market analysis, we continue to identify opportunities to improve our menu and facilities, as well as guest service. This research is benefiting both our Jack in the Box and JBX Grill(TM) brands, and will be essential in determining the next test phase of our new fast-casual JBX Grill concept.”
Jack in the Box continued testing JBX Grill at nine locations in Boise, Idaho, and Bakersfield, Calif., where the concept was enhanced based on learnings gained at two prototype restaurants in San Diego.
Second quarter financial highlights include earnings per diluted share that were 5 cents higher than the company’s guidance as well as in increase in same-store sales at Jack in the Box restaurants of 3.1 percent on top of an 8.2 percent increase in 2004.
Third quarter initiatives included an instant-win game and the addition of a new flavor to its line of real ice cream shakes, Blueberries ‘n’ Cream. Jack in the Box also expanded its breakfast lineup. Third quarter guidance highlights included, among others, same-store sales at Jack in the Box restaurants are estimated to increase approximately 3.0-3.5 percent on top of a 3.9 percent increase in the third quarter last year while total revenues are estimated at $585 million versus $541 million last year.
