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Jack in the Box Inc. Reports Second Quarter 2024 Earnings

Jack in the Box same-store sales of (2.5%); Del Taco same-store sales of (1.4%)

Jack in the Box systemwide sales of (1.6%); Del Taco systemwide sales of (1.3%)

Diluted EPS of $1.26; Operating EPS of $1.46

Jack in the Box restaurant level margin of 23.6%, up 2.2% from prior year

Jack in the Box signed franchise development agreements in Q2 to enter Tallahassee and expand in Orlando; now has 31 restaurant commitments in Florida

Del Taco signed franchisee development agreements in Q2 for 3 restaurants to enter Greensboro, NC, and 10 additional restaurants in Atlanta

Jack in the Box new-market restaurants opened in the past 12 months, which now includes Mexico, averaging almost $100k weekly AUV

Jack in the Box Inc. (NASDAQ: JACK) announced financial results for the Jack in the Box and Del Taco brands in the second quarter, ended April 14, 2024.

"I am proud of the execution by our Jack and Del Taco teams, delivering better-than-expected earnings and margin performance while navigating through increasing macro headwinds, pressure on low-income consumers and the implementation of California's minimum wage legislation," said Darin Harris, Jack in the Box Chief Executive Officer. "Top-line performance was impacted by the shift in consumer behavior and an unexpected delay in our Smashed Jack launch, but sales have improved since its introduction in mid-March. We have a clear plan to regain same store sales traction through a strong marketing calendar, new LTO's, and an expanded value menu throughout the remainder of 2024. I remain confident in our long-term strategy to drive sales, margin expansion, and new unit and market openings — as do our franchisees, who continue to grow our development pipeline and invest in the expansion of our brands."

Jack in the Box Performance

Same-store sales decreased 2.5% in the second quarter, comprised of franchise same-store sales decline of 2.6% and company-owned same-store sales decline of 0.6%. Both franchise and company-owned restaurants experienced declines in transactions, partially offset by a lift in average check. Systemwide sales for the second quarter decreased 1.6%.

Restaurant-Level Margin(1), a non-GAAP measure, was $23.3 million, or 23.6%, up from $20.4 million, or 21.4%, a year ago driven primarily by additional company-owned restaurants and commodity deflation.

Franchise-Level Margin(1), a non-GAAP measure, was $71.7 million, or 40.4%, a decrease from $73.9 million, or 41.2%, a year ago. The decrease was mainly driven by the decline in sales for the quarter and the resulting decrease in rent and royalty revenue.

Jack in the Box net restaurant count increased in the second quarter, with three restaurant openings and no restaurant closures. As of the second quarter, and since the launch of the development program in mid-2021, the company currently has 93 signed agreements for a total of 409 restaurants. Under these agreements, 44 restaurants have opened, leaving 365 remaining for future development.

Jack in the Box Same-Store Sales:

12 Weeks Ended

 

April 14, 2024

April 16, 2023

Company

(0.6

%)

10.8

%

Franchise

(2.6

%)

9.4

%

System

(2.5

%)

9.5

%

Jack in the Box Restaurant Counts:

 

2024

2023

 

Company

Franchise

Total

Company

Franchise

Total

Restaurant count at Q1'24

144

 

2,048

 

2,192

 

140

2,046

 

2,186

 

New

 

3

 

3

 

2

 

2

 

Closed

 

 

 

(1

)

(1

)

Restaurant count at end of Q2'24

144

 

2,051

 

2,195

 

140

2,047

 

2,187

 

Q2 Net Restaurant Increase

 

3

 

3

 

 

 

 

 

 

 

 

 

 

 

YTD Net Restaurant Increase

1.4

%

0.3

%

0.4

%

 

 

 

Del Taco Performance

Same-store sales decreased 1.4% in the second quarter, comprised of franchise same-store sales decline of 1.1% and company-operated same-store sales decline of 1.8%. Sales performance included declines in transactions, partially offset by a lift in average check. Systemwide sales for the fiscal second quarter decreased 1.3%.

Restaurant-Level Margin(1), a non-GAAP measure, was $11.4 million, or 16.8%, down from $18.5 million, or 17.3%, a year ago. The decrease in margin dollars was due mainly to refranchising restaurants, while the decrease in margin percentage was due to increased costs for labor and utilities, partially offset by price increases and commodity deflation.

Franchise-Level Margin(1), a non-GAAP measure, was $6.1 million, or 28.9%, compared to $5.1 million, or 37.3%, a year ago. The decrease in margin percentage was driven by the impact of a higher franchise mix and the impact of the pass-thru rent and marketing fees.

Del Taco expanded the restaurant count in the second quarter, with three restaurant openings and no restaurant closings.

Del Taco Same-Store Sales:

12 Weeks Ended

 

April 14, 2024

April 16, 2023

Company

(1.8

%)

3.5

%

Franchise

(1.1

%)

2.8

%

System

(1.4

%)

3.2

%

Del Taco Restaurant Counts:

 

2024

2023

 

Company

Franchise

Total

Company

Franchise

Total

Restaurant count at Q4'23

179

 

413

 

592

 

273

319

592

New

 

3

 

3

 

3

3

Refranchised

(13

)

13

 

 

Restaurant count at end of Q2

166

 

429

 

595

 

273

322

595

Q2 Net Restaurant Increase/(Decrease)

(13

)

16

 

3

 

 

 

 

 

 

 

 

 

 

 

YTD Net Restaurant Increase/(Decrease)

(2.9

)%

1.9

%

0.5

%

 

 

 

Company-Wide Performance

Second quarter diluted earnings per share was $1.26. Operating Earnings Per Share(2), a non-GAAP measure, was $1.46 in the second quarter of fiscal 2024 compared with $1.47 in the prior year quarter.

Total revenues decreased 7.7% to $365.3 million, compared to $395.7 million in the prior year quarter. The lower revenue is primarily the result of the Del Taco refranchising efforts. Net earnings was $25.0 million for the second quarter of fiscal 2024, compared with $26.5 million for the second quarter of fiscal 2023. Adjusted EBITDA(3), a non-GAAP measure, was $75.7 million in the second quarter of fiscal 2024 compared with $80.6 million for the prior year quarter.

Company-wide SG&A expense for the second quarter was $37.5 million, a decrease of $1.9 million compared to the prior year quarter. The decrease was due primarily to lower incentive-based compensation and lower advertising due to fewer company-owned restaurants, partially offset by higher share-based compensation, legal and technology costs. When excluding net COLI gains, G&A was 2.5% of systemwide sales.

The income tax provisions reflect an effective tax rate of 26.5% in the second quarter of 2024, as compared to 34.8% in the second quarter of fiscal year 2023. The Non-GAAP Operating EPS tax rate for the second quarter of 2024 was 27.1%.

(1) Restaurant-Level Margin and Franchise-Level Margin are non-GAAP measures. These non-GAAP measures are reconciled to earnings from operations, the most comparable GAAP measure, in the attachment to this release. See "Reconciliation of Non-GAAP Measurements to GAAP Results."

(2) Operating Earnings Per Share represents the diluted earnings per share on a GAAP basis, excluding certain adjustments. See "Reconciliation of Non-GAAP Measurements to GAAP Results." Operating earnings per share may not add due to rounding.

(3) Adjusted EBITDA represents net earnings on a GAAP basis excluding certain adjustments. See "Reconciliation of Non-GAAP Measurements to GAAP Results."

Capital Allocation

The Company repurchased 0.2 million shares of our common stock for an aggregate cost of $15.0 million in the second quarter. As of the end of the second quarter, there was $210.0 million remaining under the Board-authorized stock buyback program.

On May 10, 2024, the Board of Directors declared a cash dividend of $0.44 per share, to be paid on June 25, 2024, to shareholders of record as of the close of business on June 6, 2024. Future dividends will be subject to approval by the Board of Directors.

Guidance & Outlook Updates

The following guidance and underlying assumptions reflect the company’s current expectations for the fiscal year ending September 29, 2024. Any guidance measures not listed below remain the same as provided on November 21, 2023.

FY 2024 Company-wide Guidance

  • Adjusted EBITDA of $325-$330 million (previously $325-$335 million)
  • Operating EPS of $6.25-$6.40 (previously $6.25-$6.50)
  • Depreciation & Amortization of $60-$62 million (previously $61-$63 million)

FY 2024 Jack in the Box Segment Guidance

  • Same Store Sales growth of Flat-to-Low Single Digits (previously Low-to-Mid Single Digits)
  • Company-Owned Restaurant Level Margin of 22-23% (previously 21-23%)

FY 2024 Del Taco Segment Guidance

  • Same Store Sales growth of Flat-to-Low Single Digits (previously Low-to-Mid Single Digits)
  • Franchise Level Margin of 27-29% (previously 29-31%)

Conference Call

The Company will host a conference call for analysts and investors on Tuesday, May 14, 2024, beginning at 8:00 a.m. PT (11:00 a.m. ET). The call will be webcast live via the Investors section of the Jack in the Box company website at http://investors.jackinthebox.com. A replay of the call will be available through the Jack in the Box Inc. corporate website for 21 days. The call can be accessed via phone by dialing (800) 715-9871 and using ID 4115265.

About Jack in the Box Inc.

Jack in the Box Inc. (NASDAQ: JACK), founded and headquartered in San Diego, California, is a restaurant company that operates and franchises Jack in the Box®, one of the nation's largest hamburger chains with approximately 2,200 restaurants across 22 states, and Del Taco®, the second largest Mexican-American QSR chain by units in the U.S. with approximately 600 restaurants across 16 states. For more information on both brands, including franchising opportunities, visit www.jackinthebox.com and www.deltaco.com.

Category: Earnings

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “goals,” “guidance,” “intend,” “plan,” “project,” “may,” “will,” “would” and similar expressions. These statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate. These estimates and assumptions involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. Factors that may cause our actual results to differ materially from any forward-looking statements include, but are not limited to: the success of new products, marketing initiatives and restaurant remodels and drive-thru enhancements; the impact of competition, unemployment, trends in consumer spending patterns and commodity costs; the company’s ability to achieve and manage its planned growth, which is affected by the availability of a sufficient number of suitable new restaurant sites, the performance of new restaurants, risks relating to expansion into new markets and successful franchise development; the ability to attract, train and retain top-performing personnel, litigation risks; risks associated with disagreements with franchisees; supply chain disruption; food-safety incidents or negative publicity impacting the reputation of the company's brand; increased regulatory and legal complexities, risks associated with the amount and terms of the securitized debt issued by certain of our wholly owned subsidiaries; and stock market volatility. These and other factors are discussed in the company’s annual report on Form 10-K and its periodic reports on Form 10-Q filed with the Securities and Exchange Commission, which are available online at http://investors.jackinthebox.com or in hard copy upon request. The company undertakes no obligation to update or revise any forward-looking statement, whether as the result of new information or otherwise.

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

(Unaudited)

 

12 Weeks Ended

28 Weeks Ended

 

April 14, 2024

April 16, 2023

April 14, 2024

April 16, 2023

Revenues:

 

 

 

 

Company restaurant sales

$

167,098

$

202,604

 

$

391,138

$

472,795

 

Franchise rental revenues

 

85,826

 

83,520

 

 

199,022

 

192,350

 

Franchise royalties and other

 

55,084

 

53,982

 

 

128,414

 

130,372

 

Franchise contributions for advertising and other services

 

57,339

 

55,638

 

 

134,271

 

127,323

 

 

 

365,347

 

395,744

 

 

852,845

 

922,840

 

Operating costs and expenses, net:

 

 

 

 

Food and packaging

 

45,914

 

59,310

 

 

110,046

 

141,243

 

Payroll and employee benefits

 

54,054

 

65,035

 

 

127,108

 

153,676

 

Occupancy and other

 

32,355

 

39,275

 

 

74,408

 

90,646

 

Franchise occupancy expenses

 

57,091

 

52,649

 

 

129,715

 

119,873

 

Franchise support and other costs

 

3,860

 

3,260

 

 

9,054

 

5,137

 

Franchise advertising and other services expenses

 

59,523

 

58,143

 

 

139,757

 

132,713

 

Selling, general and administrative expenses

 

37,520

 

39,405

 

 

83,885

 

89,547

 

Depreciation and amortization

 

13,906

 

14,598

 

 

32,379

 

34,000

 

Pre-opening costs

 

602

 

154

 

 

1,067

 

485

 

Other operating expenses (income), net

 

5,267

 

2,980

 

 

10,437

 

(2,521

)

Losses (gains) on the sale of company-operated restaurants

 

1,065

 

(704

)

 

1,319

 

(4,529

)

 

 

311,157

 

334,105

 

 

719,175

 

760,270

 

Earnings from operations

 

54,190

 

61,639

 

 

133,670

 

162,570

 

Other pension and post-retirement expenses, net

 

1,579

 

1,607

 

 

3,685

 

3,751

 

Interest expense, net

 

18,603

 

19,357

 

 

43,089

 

45,505

 

Earnings before income taxes

 

34,008

 

40,675

 

 

86,896

 

113,314

 

Income taxes

 

9,028

 

14,168

 

 

23,233

 

33,553

 

Net earnings

$

24,980

$

26,507

 

$

63,663

$

79,761

 

 

 

 

 

 

Net earnings per share:

 

 

 

 

Basic

$

1.27

$

1.28

 

$

3.22

$

3.83

 

Diluted

$

1.26

$

1.27

 

$

3.19

$

3.81

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

Basic

 

19,653

 

20,744

 

 

19,790

 

20,845

 

Diluted

 

19,785

 

20,864

 

 

19,949

 

20,946

 

 

 

 

 

 

Dividends declared per common share

$

0.44

$

0.44

 

$

0.88

$

0.88

 

 

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

 

April 14,

2024

October 1,

2023

ASSETS

 

 

Current assets:

 

 

Cash

$

20,197

 

$

157,653

 

Restricted cash

 

28,780

 

 

28,254

 

Accounts and other receivables, net

 

102,664

 

 

99,678

 

Inventories

 

4,067

 

 

3,896

 

Prepaid expenses

 

8,020

 

 

16,911

 

Current assets held for sale

 

24,970

 

 

13,925

 

Other current assets

 

5,609

 

 

5,667

 

Total current assets

 

194,307

 

 

325,984

 

Property and equipment:

 

 

Property and equipment, at cost

 

1,267,469

 

 

1,258,589

 

Less accumulated depreciation and amortization

 

(850,333

)

 

(846,559

)

Property and equipment, net

 

417,136

 

 

412,030

 

Other assets:

 

 

Operating lease right-of-use assets

 

1,414,559

 

 

1,397,555

 

Intangible assets, net

 

11,254

 

 

11,330

 

Trademarks

 

283,500

 

 

283,500

 

Goodwill

 

329,583

 

 

329,986

 

Other assets, net

 

248,636

 

 

240,707

 

Total other assets

 

2,287,532

 

 

2,263,078

 

 

$

2,898,975

 

$

3,001,092

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

Current liabilities:

 

 

Current maturities of long-term debt

$

30,049

 

$

29,964

 

Current operating lease liabilities

 

158,326

 

 

142,518

 

Accounts payable

 

82,336

 

 

84,960

 

Accrued liabilities

 

168,973

 

 

302,178

 

Total current liabilities

 

439,684

 

 

559,620

 

Long-term liabilities:

 

 

Long-term debt, net of current maturities

 

1,712,360

 

 

1,724,933

 

Long-term operating lease liabilities, net of current portion

 

1,279,443

 

 

1,265,514

 

Deferred tax liabilities

 

26,808

 

 

26,229

 

Other long-term liabilities

 

143,301

 

 

143,123

 

Total long-term liabilities

 

3,161,912

 

 

3,159,799

 

Stockholders’ deficit:

 

 

Preferred stock $0.01 par value, 15,000,000 shares authorized, none issued

 

 

 

 

Common stock $0.01 par value, 175,000,000 shares authorized, 82,776,086 and 82,645,814 issued, respectively

 

828

 

 

826

 

Capital in excess of par value

 

528,887

 

 

520,076

 

Retained earnings

 

1,983,944

 

 

1,937,598

 

Accumulated other comprehensive loss

 

(50,944

)

 

(51,790

)

Treasury stock, at cost, 63,422,351 and 62,910,964 shares, respectively

 

(3,165,336

)

 

(3,125,037

)

Total stockholders’ deficit

 

(702,621

)

 

(718,327

)

 

$

2,898,975

 

$

3,001,092

 

 

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

 

Year-to-date

 

April 14, 2024

April 16, 2023

Cash flows from operating activities:

 

 

Net earnings

$

63,663

 

$

79,761

 

Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:

 

 

Depreciation and amortization

 

32,379

 

 

34,000

 

Amortization of franchise tenant improvement allowances and incentives

 

2,538

 

 

2,237

 

Deferred finance cost amortization

 

2,610

 

 

2,787

 

Excess tax (benefits) deficiency from share-based compensation arrangements

 

(49

)

 

142

 

Deferred income taxes

 

(2,326

)

 

1,496

 

Share-based compensation expense

 

8,661

 

 

5,932

 

Pension and post-retirement expense

 

3,685

 

 

3,751

 

Gains on cash surrender value of company-owned life insurance

 

(7,949

)

 

(8,007

)

Losses (gains) on the sale of company-operated restaurants

 

1,319

 

 

(4,529

)

Gains on acquisition of restaurants

 

(2,357

)

 

 

Losses (gains) on the disposition of property and equipment, net

 

1,148

 

 

(8,615

)

Impairment charges and other

 

1,580

 

 

549

 

Changes in assets and liabilities, excluding acquisitions:

 

 

Accounts and other receivables

 

815

 

 

(1,456

)

Inventories

 

(170

)

 

(23

)

Prepaid expenses and other current assets

 

9,299

 

 

6,344

 

Operating lease right-of-use assets and lease liabilities

 

9,392

 

 

8,561

 

Accounts payable

 

(396

)

 

(15,994

)

Accrued liabilities

 

(123,532

)

 

(7,043

)

Pension and post-retirement contributions

 

(3,288

)

 

(3,234

)

Franchise tenant improvement allowance and incentive disbursements

 

(1,460

)

 

(2,052

)

Other

 

(1,583

)

 

(499

)

Cash flows (used in) provided by operating activities

 

(6,021

)

 

94,108

 

Cash flows from investing activities:

 

 

Purchases of property and equipment

 

(61,071

)

 

(37,196

)

Proceeds from the sale of property and equipment

 

1,500

 

 

23,371

 

Proceeds from the sale and leaseback of assets

 

1,728

 

 

3,673

 

Proceeds from the sale of company-operated restaurants

 

1,989

 

 

18,417

 

Other

 

 

 

1,465

 

Cash flows (used in) provided by investing activities

 

(55,854

)

 

9,730

 

Cash flows from financing activities:

 

 

Repayments of borrowings on revolving credit facilities

 

 

 

(50,000

)

Principal repayments on debt

 

(14,818

)

 

(15,088

)

Dividends paid on common stock

 

(17,167

)

 

(18,218

)

Proceeds from issuance of common stock

 

2

 

 

 

Repurchases of common stock

 

(40,000

)

 

(32,621

)

Payroll tax payments for equity award issuances

 

(3,072

)

 

(1,115

)

Cash flows used in financing activities

 

(75,055

)

 

(117,042

)

Net decrease in cash and restricted cash

 

(136,930

)

 

(13,204

)

Cash and restricted cash at beginning of period

 

185,907

 

 

136,040

 

Cash and restricted cash at end of period

$

48,977

 

$

122,836

 

JACK IN THE BOX INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

The following table presents certain income and expense items included in our condensed consolidated statements of earnings as a percentage of total revenues, unless otherwise indicated. Percentages may not add due to rounding.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS DATA

(Unaudited)

 

 

12 Weeks Ended

28 Weeks Ended

 

April 14,

2024

April 16,

2023

April 14,

2024

April 16,

2023

Revenues:

 

 

 

 

Company restaurant sales

45.7

%

51.2

%

45.9

%

51.2

%

Franchise rental revenues

23.5

%

21.1

%

23.3

%

20.8

%

Franchise royalties and other

15.1

%

13.6

%

15.1

%

14.1

%

Franchise contributions for advertising and other services

15.7

%

14.1

%

15.7

%

13.8

%

 

100.0

%

100.0

%

100.0

%

100.0

%

Operating costs and expenses, net:

 

 

 

 

Food and packaging (1)

27.5

%

29.3

%

28.1

%

29.9

%

Payroll and employee benefits (1)

32.3

%

32.1

%

32.5

%

32.5

%

Occupancy and other (1)

19.4

%

19.4

%

19.0

%

19.2

%

Franchise occupancy expenses (2)

66.5

%

63.0

%

65.2

%

62.3

%

Franchise support and other costs (3)

7.0

%

6.0

%

7.1

%

3.9

%

Franchise advertising and other services expenses (4)

103.8

%

104.5

%

104.1

%

104.2

%

Selling, general and administrative expenses

10.3

%

10.0

%

9.8

%

9.7

%

Depreciation and amortization

3.8

%

3.7

%

3.8

%

3.7

%

Pre-opening costs

0.2

%

0.0

%

0.1

%

0.1

%

Other operating expenses (income), net

1.4

%

0.8

%

1.2

%

(0.3

)%

Losses (gains) on the sale of company-operated restaurants

0.3

%

(0.2

)%

0.2

%

(0.5

)%

Earnings from operations

14.8

%

15.6

%

15.7

%

17.6

%

Income tax rate (5)

26.5

%

34.8

%

26.7

%

29.6

%

____________________________

(1)

As a percentage of company restaurant sales.

(2)

As a percentage of franchise rental revenues.

(3)

As a percentage of franchise royalties and other.

(4)

 

As a percentage of franchise contributions for advertising and other services.

(5)

As a percentage of earnings from operations and before income taxes.

 

Jack in the Box systemwide sales (in thousands):

12 Weeks Ended

28 Weeks Ended

 

April 14, 2024

April 16, 2023

April 14, 2024

April 16, 2023

Company-operated restaurant sales

$

98,927

$

95,489

$

230,984

$

221,631

Franchised restaurant sales (1)

 

911,265

 

931,257

 

2,138,015

 

2,140,239

Systemwide sales (1)

$

1,010,192

$

1,026,746

$

2,368,999

$

2,361,870

 

Del Taco systemwide sales (in thousands):

12 Weeks Ended

28 Weeks Ended

 

April 14, 2024

April 16, 2023

April 14, 2024

April 16, 2023

Company-operated restaurant sales

$

68,171

$

107,115

$

160,154

$

251,164

Franchised restaurant sales (1)

 

154,854

 

118,896

 

353,330

 

264,994

Systemwide sales (1)

$

223,025

$

226,011

$

513,484

$

516,158

____________________________

(1)

Franchised restaurant sales represent sales at franchised restaurants and are revenues of our franchisees. Systemwide sales include company and franchised restaurant sales. We do not record franchised sales as revenues; however, our royalty revenues, marketing fees and percentage rent revenues are calculated based on a percentage of franchised sales. We believe franchised and systemwide restaurant sales information is useful to investors as they have a direct effect on the company's profitability.

JACK IN THE BOX INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS

(Unaudited)

To supplement the condensed consolidated financial statements, which are presented in accordance with GAAP, the company uses the following non-GAAP measures: Adjusted Net Income, Operating Earnings Per Share, Adjusted EBITDA, Restaurant-Level Margin and Franchise-Level Margin. Management believes that these measurements, when viewed with the company's results of operations in accordance with GAAP and the accompanying reconciliations in the tables below, provide useful information about operating performance and period-over-period changes, and provide additional information that is useful for evaluating the operating performance of the company's core business without regard to potential distortions.

Operating Earnings Per Share

Operating Earnings Per Share represents diluted earnings per share on a GAAP basis excluding acquisition, integration and strategic initiatives, net COLI gains, pension and post-retirement benefit costs, losses (gains) on the sale of company-operated restaurants, excess tax (benefits) shortfall from share-based compensation arrangements, and the tax-related impacts of the above adjustments.

Operating Earnings Per Share should be considered as a supplement to, not as a substitute for, analysis of results as reported under U.S. GAAP or other similarly titled measures of other companies. Management believes Operating Earnings Per Share provides investors with a meaningful supplement of the company’s operating performance and period-over-period changes without regard to potential distortions.

Below is a reconciliation of Non-GAAP Adjusted Net Income to the most directly comparable GAAP measure of net income. Also below is a reconciliation of Non-GAAP Operating Earnings Per Share to the most directly comparable GAAP measure, diluted earnings per share:

 

12 Weeks Ended

 

April 14, 2024

April 16, 2023

Net income, as reported

$

24,980

 

$

26,507

 

Acquisition, integration, and strategic initiatives (1)

 

4,268

 

 

1,259

 

Net COLI gains (2)

 

(1,232

)

 

(844

)

Pension and post-retirement benefit costs (3)

 

1,579

 

 

1,607

 

Losses (gains) on the sale of company-operated restaurants (4)

 

1,065

 

 

(704

)

Excess tax (benefits) shortfall from share-based compensation arrangements

 

(38

)

 

 

Tax impact of adjustments (5)

 

(1,700

)

 

2,940

 

Non-GAAP Adjusted Net Income

$

28,922

 

$

30,765

 

 

 

 

Weighted-average shares outstanding - diluted

 

19,785

 

 

20,864

 

 

 

 

Diluted earnings per share – GAAP

$

1.26

 

$

1.27

 

Acquisition, integration, and strategic initiatives (1)

 

0.22

 

 

0.06

 

Net COLI gains (2)

 

(0.06

)

 

(0.04

)

Pension and post-retirement benefit costs (3)

 

0.08

 

 

0.08

 

Losses (gains) on the sale of company-operated restaurants

 

0.05

 

 

(0.03

)

Excess tax (benefits) shortfall from share-based compensation arrangements

 

0.00

 

 

 

Tax impact of adjustments (4)

 

(0.09

)

 

0.13

 

Operating Earnings Per Share – non-GAAP (5)

$

1.46

 

$

1.47

 

____________________

(1)

Acquisition, integration and strategic initiatives reflect charges that are not part of our ongoing operations, including consulting fees for discrete project-based strategic initiatives that are not expected to recur in the foreseeable future.

(2)

Net COLI gains reflect market-based adjustments on the company-owned life insurance policies, net of changes in our non-qualified deferred compensation obligation supported by these policies.

(3)

Pension and post-retirement benefit costs relating to our two legacy defined benefit pension plans, as well as our two legacy post-retirement plans.

(4)

Tax impacts for the quarter calculated based on the non-GAAP Operating EPS tax rate of 27.1% in the current quarter and 26.7% in the prior year quarter.

(5)

Operating Earnings Per Share may not add due to rounding.

Adjusted EBITDA

Adjusted EBITDA represents net earnings on a GAAP basis excluding income taxes, interest expense, net, losses (gains) on the sale of company-operated restaurants, other operating expenses (income), net, depreciation and amortization, amortization of cloud computing costs, amortization of favorable and unfavorable leases and subleases, net, amortization of franchise tenant improvement allowances and other, net COLI gains, and pension and post-retirement benefit costs.

Adjusted EBITDA should be considered as a supplement to, not as a substitute for, analysis of results as reported under U.S. GAAP or other similarly titled measures of other companies. Management believes Adjusted EBITDA is useful to investors to gain an understanding of the factors and trends affecting the company's ongoing cash earnings, from which capital investments are made and debt is serviced.

Below is a reconciliation of non-GAAP Adjusted EBITDA to the most directly comparable GAAP measure, net earnings (in thousands):

 

12 Weeks Ended

 

April 14, 2024

April 16, 2023

Net earnings - GAAP

$

24,980

 

$

26,507

 

Income taxes

 

9,028

 

 

14,168

 

Interest expense, net

 

18,603

 

 

19,357

 

Losses (gains) on the sale of company-operated restaurants

 

1,065

 

 

(704

)

Other operating expenses (income), net (1)

 

5,267

 

 

2,980

 

Depreciation and amortization

 

13,906

 

 

14,598

 

Amortization of cloud-computing costs (2)

 

1,274

 

 

1,094

 

Amortization of favorable and unfavorable leases and subleases, net

 

107

 

 

826

 

Amortization of franchise tenant improvement allowances and other

 

1,127

 

 

1,022

 

Net COLI gains (3)

 

(1,232

)

 

(844

)

Pension and post-retirement benefit costs (4)

 

1,579

 

 

1,607

 

Adjusted EBITDA – non-GAAP

$

75,704

 

$

80,611

 

 

(1)

Other operating expense (income), net includes: acquisition, integration and strategic initiatives; costs of closed restaurants; operating restaurant impairment charges; accelerated depreciation and gains/losses on disposition of property and equipment, net.

(2)

Amortization of cloud computing costs includes the amounts for the non-cash amortization of capitalized implementation costs related to cloud-based software arrangements that are included within selling, general and administrative expenses.

(3)

Net COLI gains reflect market-based adjustments on the company-owned life insurance policies, net of changes in our non-qualified deferred compensation obligation supported by these policies.

(4)

Pension and post-retirement benefit costs relating to our two legacy defined benefit pension plans, as well as the two legacy post-retirement plans.

Restaurant-Level Margin

Restaurant-Level Margin is defined as company restaurant sales less restaurant operating costs (food and packaging, labor, and occupancy costs) and is neither required by, nor presented in accordance with GAAP. Restaurant-Level Margin excludes revenues and expenses of our franchise operations and selling, general, and administrative expenses. Certain other costs, such as depreciation and amortization, other operating expenses (income), net, losses (gains) on the sale of company-operated restaurants, and other costs that are considered normal operating costs are excluded as they are considered corporate-level shared service costs. As such, Restaurant-Level Margin is not indicative of the overall results of the company and does not accrue directly to the benefit of shareholders because of the exclusion of corporate-level expenses. Restaurant-Level Margin should be considered as a supplement to, not as a substitute for, analysis of results as reported under GAAP or other similarly titled measures of other companies. The company is presenting Restaurant-Level Margin because it believes that it provides a meaningful supplement to net earnings of the company's core business operating results, as well as a comparison to those of other similar companies. Management utilizes Restaurant-Level Margin as a key performance indicator to evaluate the profitability of company-operated restaurants.

Below is a reconciliation of non-GAAP Restaurant-Level Margin to the most directly comparable GAAP measure, earnings from operations (in thousands):

 

12 weeks ended April 14, 2024

 

Jack in the

Box

Del Taco

Other (1)

Total

Earnings from operations - GAAP

$

84,980

 

$

9,039

 

$

(39,829

)

$

54,190

 

Franchise rental revenues

 

(79,618

)

 

(6,208

)

 

 

 

(85,826

)

Franchise royalties and other

 

(47,537

)

 

(7,547

)

 

 

 

(55,084

)

Franchise contributions for advertising and other services

 

(50,179

)

 

(7,160

)

 

 

 

(57,339

)

Franchise occupancy expenses

 

50,849

 

 

6,242

 

 

 

 

57,091

 

Franchise support and other costs

 

2,757

 

 

1,103

 

 

 

 

3,860

 

Franchise advertising and other services expenses

 

52,003

 

 

7,520

 

 

 

 

59,523

 

Selling, general and administrative expenses

 

9,752

 

 

7,112

 

 

20,656

 

 

37,520

 

Depreciation and amortization

 

 

 

 

 

13,906

 

 

13,906

 

Pre-opening costs

 

322

 

 

280

 

 

 

 

602

 

Other operating expenses (income), net

 

 

 

 

 

5,267

 

 

5,267

 

Losses (gains) on the sale of company-operated restaurants

 

 

 

1,065

 

 

 

 

1,065

 

Restaurant-Level Margin - Non-GAAP

$

23,329

 

$

11,446

 

$

 

$

34,775

 

 

 

 

 

 

Company restaurant sales

$

98,927

 

$

68,171

 

$

 

$

167,098

 

 

 

 

 

 

Restaurant-Level Margin % - Non-GAAP

 

23.6

%

 

16.8

%

 

N/A

 

 

20.8

%

 

 

12 weeks ended April 16, 2023

 

Jack in the

Box

Del Taco

Other (1)

Total

Earnings from operations - GAAP

$

86,231

 

$

12,286

 

$

(36,878

)

$

61,639

 

Franchise rental revenues

 

(80,910

)

 

(2,610

)

 

 

 

(83,520

)

Franchise royalties and other

 

(48,071

)

 

(5,911

)

 

 

 

(53,982

)

Franchise contributions for advertising and other services

 

(50,361

)

 

(5,277

)

 

 

 

(55,638

)

Franchise occupancy expenses

 

50,007

 

 

2,642

 

 

 

 

52,649

 

Franchise support and other costs

 

2,735

 

 

525

 

 

 

 

3,260

 

Franchise advertising and other services expenses

 

52,660

 

 

5,483

 

 

 

 

58,143

 

Selling, general and administrative expenses

 

8,959

 

 

11,146

 

 

19,300

 

 

39,405

 

Depreciation and amortization

 

 

 

 

 

14,598

 

 

14,598

 

Pre-opening costs

 

102

 

 

52

 

 

 

 

154

 

Other operating expenses (income), net

 

 

 

 

 

2,980

 

 

2,980

 

Losses (gains) on the sale of company-operated restaurants

 

(904

)

 

200

 

 

 

 

(704

)

Restaurant-Level Margin - Non-GAAP

$

20,448

 

$

18,536

 

$

 

$

38,984

 

 

 

 

 

 

Company restaurant sales

$

95,489

 

$

107,115

 

$

 

$

202,604

 

 

 

 

 

 

Restaurant-Level Margin % - Non-GAAP

 

21.4

%

 

17.3

%

 

N/A

 

 

19.2

%

(1) The "Other" category includes shared services costs and other unallocated costs

Franchise-Level Margin

Franchise-Level Margin is defined as franchise revenues less franchise operating costs (occupancy expenses, advertising contributions, and franchise support and other costs) and is neither required by, nor presented in accordance with GAAP. Franchise-Level Margin excludes revenue and expenses of our company-operated restaurants and selling, general, and administrative expenses. Certain other costs, such as depreciation and amortization, other operating expenses (income), net, losses (gains) on the sale of company-operated restaurants, and other costs that are considered normal operating costs are excluded as they are considered corporate-level shared service costs. As such, Franchise-Level Margin is not indicative of the overall results of the company and does not accrue directly to the benefit of shareholders because of the exclusion of corporate-level expenses. Franchise-Level Margin should be considered as a supplement to, not as a substitute for, analysis of results as reported under GAAP or other similarly titled measures of other companies. The company is presenting Franchise-Level Margin because it believes that it provides a meaningful supplement to net earnings of the company's core business operating results, as well as a comparison to those of other similar companies. Management utilizes Franchise-Level Margin as a key performance indicator to evaluate the profitability of our franchise operations.

Below is a reconciliation of non-GAAP Franchise-Level Margin to the most directly comparable GAAP measure, earnings from operations (in thousands):

 

12 weeks ended April 14, 2024

 

Jack in the

Box

Del Taco

Other (1)

Total

Earnings from operations - GAAP

$

84,980

 

$

9,039

 

$

(39,829

)

$

54,190

 

Company restaurant sales

 

(98,927

)

 

(68,171

)

 

 

 

(167,098

)

Food and packaging

 

28,486

 

 

17,428

 

 

 

 

45,914

 

Payroll and employee benefits

 

30,294

 

 

23,760

 

 

 

 

54,054

 

Occupancy and other

 

16,818

 

 

15,537

 

 

 

 

32,355

 

Selling, general and administrative expenses

 

9,752

 

 

7,112

 

 

20,656

 

 

37,520

 

Depreciation and amortization

 

 

 

 

 

13,906

 

 

13,906

 

Pre-opening costs

 

322

 

 

280

 

 

 

 

602

 

Other operating expenses (income), net

 

 

 

 

 

5,267

 

 

5,267

 

Losses (gains) on the sale of company-operated restaurants

 

 

 

1,065

 

 

 

 

1,065

 

Franchise-Level Margin - Non-GAAP

$

71,725

 

$

6,050

 

$

 

$

77,775

 

 

 

 

 

 

Franchise rental revenues

$

79,618

 

$

6,208

 

$

 

$

85,826

 

Franchise royalties and other

 

47,537

 

 

7,547

 

 

 

 

55,084

 

Franchise contributions for advertising and other services

 

50,179

 

 

7,160

 

 

 

 

57,339

 

Total franchise revenues

$

177,334

 

$

20,915

 

$

 

$

198,249

 

 

 

 

 

 

Franchise-Level Margin % - Non-GAAP

 

40.4

%

 

28.9

%

 

N/A

 

 

39.2

%

 

 

12 weeks ended April 16, 2023

 

Jack in the

Box

Del Taco

Other (1)

Total

Earnings from operations - GAAP

$

86,231

 

$

12,286

 

$

(36,878

)

$

61,639

 

Company restaurant sales

 

(95,489

)

 

(107,115

)

 

 

 

(202,604

)

Food and packaging

 

29,841

 

 

29,468

 

 

 

 

59,309

 

Payroll and employee benefits

 

29,200

 

 

35,835

 

 

 

 

65,035

 

Occupancy and other

 

15,999

 

 

23,276

 

 

 

 

39,275

 

Selling, general and administrative expenses

 

8,959

 

 

11,146

 

 

19,300

 

 

39,405

 

Depreciation and amortization

 

 

 

 

 

14,598

 

 

14,598

 

Pre-opening costs

 

102

 

 

52

 

 

 

 

154

 

Other operating expenses (income), net

 

 

 

 

 

2,980

 

 

2,980

 

Losses (gains) on the sale of company-operated restaurants

 

(904

)

 

200

 

 

 

 

(704

)

Franchise-Level Margin - Non-GAAP

$

73,939

 

$

5,148

 

$

 

$

79,087

 

 

 

 

 

 

Franchise rental revenues

$

80,910

 

$

2,610

 

$

 

$

83,520

 

Franchise royalties and other

 

48,071

 

 

5,911

 

 

 

 

53,982

 

Franchise contributions for advertising and other services

 

50,361

 

 

5,277

 

 

 

 

55,638

 

Total franchise revenues

$

179,342

 

$

13,798

 

$

 

$

193,140

 

 

 

 

 

 

Franchise-Level Margin % - Non-GAAP

 

41.2

%

 

37.3

%

 

N/A

 

 

40.9

%

(1) The "Other" category includes shared services costs and other unallocated costs

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