Jack in the Box said Monday it recorded better-than-expected gains in same-store sales and traffic in the fourth quarter, indicating that turnaround efforts are taking hold.
For the fourth quarter ended Oct. 2, San Diego-based Jack in the Box Inc. booked net income of $22.7 million, or 49 cents per share, compared with $4 million, or 7 cents per share, for the same quarter last year.
In the prior year quarter about 40 restaurants were closed and results reflected pre-tax impairment charges of $28 million, which impacted earnings by about 33 cents, the company said. In addition, Jack in the Box Inc. saw gains of about 30 cents per share during the recent quarter on the sale of 106 company-owned restaurants to franchisees.
Latest-quarter revenue fell to $504.2 million for the quarter, a decline of 10 percent from $563.2 million a year ago.
Fourth-quarter systemwide same-store sales increased 3.1 percent, reflecting gains of 5.8 percent at corporate locations and 2 percent at franchised units.
At sister brand Qdoba Mexican Grill, systemwide same-store sales rose 3.7 percent, with corporate locations up 4.3 percent and franchise units up 3.3 percent.
“We believe these results have been largely driven by investments we have made to enhance the entire guest experience at the Jack in the Box brand,” Linda Lang, Jack in the Box chairwoman, chief executive and president, said.
Lang said same-store sales increases in the fourth quarter exceeded expectations, reflecting an acceleration of sales and traffic in particular in the last two months of the quarter.
Turnaround efforts have included an ongoing restaurant remodeling program; the rollout of new, easier-to-navigate menu boards; and upgrades to key menu items and efforts to improve service.
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In fiscal 2011, the company completed the refranchising of 332 restaurants, bringing the Jack in the Box system to its goal of between 70-percent to 80-percent franchise operated. At the end of the quarter, 72 percent of the chain’s 2,221 restaurants were franchise operated.
“Over the last six years, we have refranchised more than 1,000 restaurants and expect to refranchise 150 to 200 restaurants over the next couple of years, which will bring our Jack in the Box franchise ownership to approximately 80 percent of the system,” Lang said.
Commodity costs for the quarter increased by about 7 percent, the company reported, driven largely by higher costs for almost all commodities other than poultry, the company said.
Jack in the Box posted full fiscal year profit totaling $80.6 million, or $1.61 per share, a 15-percent increase over fiscal 2010 earnings of $70.2 million, or $1.26 per share.
For the year, systemwide same-store sales rose 1.8 percent at Jack in the Box restaurants and 5.3 percent at Qdoba locations.
In its outlook for the first quarter of 2012, the company projected that same-store sales would increase between 4 percent and 5 percent at Jack in the Box company restaurants, and rise between 2 percent and 3 percent at Qdoba units.
The company’s earnings per share is projected to total between $1.10 to $1.43 for fiscal 2012.
Overall commodity costs for the year are projected to increase about 5 percent, with higher inflation in the first half.
At the end of the fourth quarter, Jack in the Box Inc. operated or franchised 2,221 units of its namesake brand, as well as 583 Qdoba restaurants.