"Focused efforts to grow the Jack in the Box brand, coupled with ongoing product quality and service improvements, continue to deliver record performances," said CEO Robert J. Nugent. "These initiatives not only grew our same-store sales each quarter vs. a year ago for the last 21 quarters; they also helped company restaurants in our new southeastern markets exceed our expectations as we seek to become a national restaurant chain and a power brand.
"From increased sales to customer satisfaction research, we know Jack in the Box is growing in value to the consumer," he added.
Net earnings in the second quarter a year ago were $25 million, or $13.6 million excluding the after-tax benefit of an unusual, $18 million reduction in restaurant operating costs, due to a change in estimates resulting from improvement to the company's loss prevention and risk management programs.
Company restaurant sales achieved a record $347 million during the second quarter, growing 14.4 percent from the second quarter of last year. Systemwide sales improved 12.3 percent to $437 million. Total revenues grew 15 percent to $370 million.
Same-store sales at company restaurants grew 3 percent compared with the second quarter of last year, based upon a 1.4 percent increase in customer visits and a 1.6 percent increase in average check amounts. "Importantly, this year's increases in same-store sales are on top of last year's second quarter increase of 9.1 percent," Nugent said.
Restaurant operating margins improved to 19.9 percent from 19.5 percent in the second quarter of fiscal 1999 before the unusual item.
During the second quarter, Jack in the Box opened 29 new company restaurants for a total of 1,255 company restaurants. "Growth in existing and new markets, including Charlotte, Nashville and Baton Rouge, remains on track," noted Nugent. "So encouraging has been our performance in the Southeast, we intend to expand further next year into the Greenville/Spartanburg, S.C., area.
"Maintaining our momentum will require that we continue focusing on delivering a restaurant experience our customers want," Nugent said. To that end, the company will soon introduce new and limited-time-only products to accompany the core products for which it is known. A new and improved Chicken Supreme Sandwich, biscuit sandwiches, a root beer float and a raspberry ice cream shake will augment the menu systemwide during the third quarter," he noted.
Also during the quarter, the company repurchased 178,000 shares of stock for $3.4 million at an average price of $19 per share. Under authorization from its board of directors to repurchase up to $10 million of Jack in the Box stock, the company has repurchased a total of 306,000 shares at an average price of $19 per share, or $5.8 million.
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