Miami, FL – November 20, 2018 (EmergingGrowth.com NewsWire) — EmergingGrowth.com, a leading independent small cap media portal with an extensive history of providing unparalleled content for the Emerging Growth markets and companies, reports on Jack in the Box, Inc., (NASDAQ: JACK)

Jack in the Box Inc. (JACK): What Is in Store?

Jack in the Box Inc. (NASDAQ: JACK) has witnessed a sharp revenue and earnings drop on a year-over-yearbasis, while its stock is down 15% due to the sale of the Qdoba restaurant, despite the recent gain following the sales topping estimates. Aside from that, what’s giving investors hope is that guidance looked to be in line with analysts’ estimations as far as comparable sales and adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) are concerned.

EPS Growth

Jack in the Box deliveredearnings of 68 cents a share for the fourth quarter, which is sharply lower than $1.05 in the same period last year. The latest quarterly numbers included gains of 9 cents, which were more than offsetby restructuring charges and noncash impact of 19 cents a share. As a result, the company’s non-GAAP earnings were 77 cents a share, up by 5.48 percent from 73 cents a share in the previous year quarter. The adjusted EBITDA dipped to $54.0 million from $62.2 million in the same period last year and in the previous four quarters, the company’s earningsmissed in two quarters and exceeded in the other two.

For the full year, the company’s earnings from continuing operations fell to $3.62 from $4.16 in fiscal year 2017. Both the years were impacted by gains, as well as restructuring charges. However, adjusted earnings increased by9.54 percent to $3.79 from $3.46 a share in the same period. Adjusted EBITDA, on the other hand, dipped to $264.2 million from $284.7 million.

Sales Metrics

Jack in the Box sales dropped to $177.47 million from $232.13 million in the previous quarter. The company’s franchise rental, royalties and other revenues have delivered growth, whereas company restaurant sales fell sharply. While earnings missed estimates, revenue topped expectations.

For the full year, the company reported a revenue of $869.69 million from $1.097 billion in the fiscal year 2017. While company restaurant sales fell sharply, franchise rental revenues and franchise royalties and other revenues grew from the previous year.

System Same-Store Sales

The restaurant firm’s same-storesales rose by 0.8 percent, driven by the franchise’s 0.4-percent and the system’s 0.5-percent growth in the fourth quarter. In the preceding year period, there was a 2.0-percent drop with the franchise and systems, delivering a fall of 0.7 percent and 1.0 percent, respectively.

For the fiscal year 2018, same-storesales rose 0.6 percent versus 1.1 percent fall. Franchise and system same-storesales expanded 0.1 percent each compared to the 0.9-percent and 0.5-percent expansion in the previous year.

Outlook

Going forward, Jack in the Box expects system same-storesales to be flat to a maximum of 2.0 percent growth and sees commodity cost inflation of about 2.0 percent for fiscal year 2019. The company is targeting an adjusted EBITDA of $260–$270 million. Restaurant-level EBITDA is projected between 26.0 and 27.0 percent of sales. Sales and general and administrative expenses are targeted in the range of 8.5–9.0 percent of revenues. Same-storesales and EBITDA outlook are in line with the analysts’ expectations.

Competitors

Papa John’s International Inc. (NASDAQ:PZZA) deliveredadjusted earnings of 20 cents a share and missed estimates. Similarly, revenue fell 15.7 percent to $364.01 million in the third quarter and fell shy of expectations. However, its comparable sales drop of 9.8 percent in North America is better than the 10.9-percent fall estimated by the analysts. As a result, the company sees better-than-expected comparable sales for the full year.

Another rival, Bojangles’ Inc. (NASDAQ:BOJA), reportedadjusted earnings of 21 cents a share for the third quarter, thus surpassing estimates. Similarly, its revenue of $138.7 million also came in above the expectations.

Conclusion

Jack in the Box is trying to record revenue growth with the help of system same-storesales. Though earnings could be a concern, top-linegrowth could help the company to improve its efficiency and boost profitability. Now that the company has completed its sale of the Qdoba restaurant, there is increased hope of realizing better profits. Its price-to-sales ratio and profit-to-earnings ratio are lower than that of the industry, thus suggesting a possibility for upward movement.

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