SAN DIEGO While announcing a 2.2-percent dip in quarterly profit, Jack in the Box Inc. revealed plans Wednesday to introduce a slew of new products for its namesake chain, including smoothies, premium iced coffee drinks and such snack items as warm cinnamon rolls and Spicy Chicken Bites.
The items, which will be introduced during the coming year, reflect the quick-service category’s recent obsession with beverage, breakfast and snack offerings. McDonald’s, Burger King, Wendy’s, Dunkin’ Donuts and Sonic, among others, have increased their efforts to exploit the competitive but sales-boosting dayparts of breakfast and snacks, in part by introducing a flurry of products. The stepped-up activity is intended to build or at least maintain traffic during these tough economic times.
Jack in the Box’s new iced coffee, which will include a “slightly sweetened” blend of French roast coffee and two-percent milk poured over ice in original, vanilla or caramel flavors, follows the October introduction of the chain’s new Bold Roast Coffee.
The chain’s new smoothie line, called Real Fruit Smoothies, is set for roll out in April, the company said. The beverages will be made with fruit juice and nonfat frozen yogurt. Taco Bell, another quick-service competitor also based in California, said earlier this month that it was poised to introduce smoothies, called Frutista Freezes, this summer. McDonald’s also is testing a smoothie line.
Jack in the Box has been testing its Real Fruit Smoothies in several markets, it said, and three flavors will be ready in April.
Additional items set for promotion in the current quarter include a new Spicy Chicken Bites à la carte snack item, set for rollout next week. McDonald’s scored large sales gains last year from its chicken Snack Wraps, and KFC said it also would introduce a “portable” grilled-chicken snack item later this year.
In March, new cinnamon rolls drizzled with icing will be added to Jack in the Box’s breakfast menu, and in April, a BBQ Bacon Sirloin Burger will expand the chain’s premium burger lineup.
For the quarter ended Jan. 20, company officials reported net income of $36.5 million, or 60 cents per share, compared with the year-ago $37.4 million, or 52 cents per share. The surge in per-share income was based on a 16-percent drop in share count for the latest quarter because of the company’s stock buybacks.
Higher costs, especially for cheese, eggs and shortening, as well as the difficult macroeconomic climate, negatively affected sales and profit, and are continued to do so, the company said. While the company’s net dipped from a year earlier, it still beat analyst expectations.
Quarterly revenues rose 6 percent to $904.9 million, including sales and franchise fees from the 2,138-unit Jack in the Box chain, the 400-unit Qdoba Mexican Grill chain and 61 Quick Stuff convenience stores.
Same-store sales at corporate Jack in the Box restaurants increased 1.5 percent for the quarter, on top of a year-ago increase of 5.6 percent, the company reported. Qdoba Mexican Grill booked a systemwide same-store sales jump of 4.5 percent, following a 4.1-percent jump for the same period a year earlier.
First-quarter product introductions included the new Bold Roast Coffee; a cheesesteak-style Sirloin Steak Melt; Grilled Chicken Strips with teriyaki dipping sauce; a whole-grain Chicken Fajita Pita; a Cherry Chip Bliss milk shake; and a bundled value meal called The Big Deal.
“Our overall business is strong, despite a challenging environment in which commodity costs remain high and economic pressures are impacting consumer spending,” said Linda Lang, chairman and chief executive. “Looking ahead, we have a long line of innovative products in our development pipeline and a great marketing calendar planned for the remainder of the year.”
For the company’s full fiscal year, ending in October, Jack in the Box expects same-store sales at corporate Jack in the Box units to increase between 2 percent and 3 percent. At Qdoba, systemwide same-store sales are expected to increase between 4 percent and 6 percent.
The company also said it would continue its refranchising initiative, seeking to sell as many as 120 Jack in the Box restaurants to franchisees for gains between $45 and $50 million. It also plans to continue its restaurant reimaging program, which it expects to complete in three to four years.