Jack In The Box Q1 Profit Up 56%, Beats View; Lifts 2014 Outlook

(RTTNews) - Restaurant operator Jack in the Box Inc. (JACK) on Wednesday reported a 56 percent increase in profit for the first quarter from last year as slightly lower revenues were more than offset by a decrease in operating costs and expenses.

Operating earnings per share for the quarter beat analysts' estimates. Looking ahead, the company raised its operating earnings outlook for fiscal 2014.

Lenny Comma, chairman and chief executive officer of Jack in the Box, said, "We had a great first quarter, with a 27 percent increase in operating earnings per share resulting from solid same-store sales growth at both Jack in the Box and Qdoba Mexican Grill, margin expansion and lower overhead."

The San Diego-based company's net income for the first quarter was $32.29 million or $0.74 per share, up from $20.69 million or $0.47 per share in the year-ago period.

Operating earnings, or adjusted earnings per share from continuing operations excluding restructuring charges and gains from refranchising, were $0.75 per share for the quarter, up from $0.59 per share in the prior-year period.

On average, 13 analysts polled by Thomson Reuters expected the company to earn $0.66 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter declined less than 1 percent to $450.08 million from $454.3 million in the same period last year. Analysts had a consensus revenue estimate of $435.43 million for the quarter.

Company restaurant sales, which accounted for 75.3 percent of total revenues, declined 3 percent from the prior-year period to $338.83 million, while franchise revenues increased 6 percent to $111.23 million.

Company-wide same-store sales at Jack in the Box increased 2.1 percent, compared to a 2.1 percent increase in the year-ago period. Qdoba company-wide same-store sales increased 2.0 percent, compared to a 1.7 percent increase in the prior-year period.

Consolidated restaurant operating margin increased by 130 basis points to 18.3 percent of sales in the quarter, compared with 17.0 percent of sales in the year-ago period.

Operating costs and expenses for the quarter declined 4 percent to $392.88 million from $411.16 million in the prior-year period, reflecting lower impairment and other charges, among others.

Looking ahead to the second quarter, Jack in the Box forecasts same-store sales at Jack in the Box company restaurants to increase about 1.5 to 2.5 percent, compared to a 0.9 percent increase in the year-ago quarter.

The company also projects same-store sales at Qdoba company restaurants to increase about 2.0 to 3.0 percent in the second quarter, compared to a 1.8 percent decrease in the year-ago quarter.

For fiscal year 2014, Jack in the Box now forecasts operating earnings in a range of $2.20 to $2.35, up from the prior range of $2.15 to $2.30 per share. Street expects the company to earn $2.25 per share for the year.

The company projects full-year same-store sales to increase about 1.5 to 2.5 percent at Jack in the Box company restaurants and increase about 2.0 to 3.0 percent at Qdoba company restaurants.

JACK closed Wednesday's regular trading session at $53.47, up $0.77 or 1.46 percent on a volume of 918,587 shares. In after-hours, the stock further gained $1.32 or 2.47 percent to $55.40.