Jack in the Box Q4 Earnings Up, Sets FY10 Guidance
Published:18-November-2009
By Staff Reporter
Operating margin improves to 15.8% of sales
Jack in the Box has reported earnings from continuing operations of $40.6m, or 70 cents per diluted share, for the fourth quarter ended Sept. 27, 2009, compared with earnings from continuing operations of $26.1m, or 45 cents per diluted share, for the fourth quarter of fiscal 2008.
For fiscal 2009, earnings from continuing operations totaled $131m, or $2.27 per diluted share, compared with $118.2m, or $1.99 per diluted share in fiscal 2008. Both the fourth quarter of 2008 and fiscal year 2008 included a negative impact of approximately 4 to 5 cents per diluted share for losses and costs related to Hurricane Ike.
The company completed the sale of its 61 Quick Stuff convenience stores during the fourth quarter of fiscal 2009 in multiple transactions with cash proceeds totaling $34.4m. The company recorded after-tax charges totaling $15m in fiscal 2009, which reduced diluted earnings per share by approximately 26 cents.
Consolidated restaurant operating margin improved to 15.8% of sales in the fourth quarter of 2009, compared with 13.6% of sales in the year ago quarter.
Same-store sales at Jack in the Box company restaurants decreased 6% in the fourth quarter of 2009, reflecting weakening trends during the last half of the quarter. This compares to a year-ago decrease of 0.8%, which reflected a negative impact of approximately 1% from Hurricane Ike.
For fiscal year 2009, same-store sales at company Jack in the Box restaurants decreased 1.2% compared to a 0.2% increase in fiscal 2008.
During the quarter, 15 new Jack in the Box restaurants has opened, including seven franchised locations and for the fiscal year, 64 new Jack in the Box restaurants opened, including 21 franchised locations.
Linda Lang, chairman and chief executive officer of Jack in the Box, said: “Our ability to grow earnings in a recessionary environment, marked by the highest unemployment levels in 26 years, was largely due to the successful execution of strategic initiatives, such as refranchising, new unit growth and improving our cost structure.
“Our performance in these areas more than offset ongoing weakness in sales while strengthening our core brand and positioning the company for continued growth and margin expansion when the economy recovers.”
The company expects same-store sales to decrease 10% for the fiscal year at Jack in the Box restaurants compared to a 1.7% increase in the year-ago quarter. For FY 2010, it anticipates 3 to 7% decrease in same-store sales for 2010 at Jack in the Box restaurants. It plans to open 45 to 50 new Jack in the Box restaurants, including approximately 30 company locations.
