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Jack In The Box Inc. Reports Fourth Quarter FY 2013 Earnings; Issues Guidance For FY 2014; Updates Long-term Goals

Stocks in this article: JACK

The company repurchased approximately 1,198,000 shares of its common stock in the fourth quarter of 2013 at an average price of $40.04 per share for an aggregate cost of $48.0 million. During fiscal year 2013, the company repurchased approximately 3,971,000 shares at an average price of $35.29 per share, for an aggregate cost of $140.1 million. This leaves $36.8 million remaining under a $100 million stock-buyback program that expires in November 2014, and an additional $100 million remaining under a stock-buyback program that expires in November 2015, both of which were previously authorized by the company’s board of directors.

Guidance

The following guidance and underlying assumptions reflect the company’s current expectations for the first quarter ending January 19, 2014, and the fiscal year ending September 28, 2014. Fiscal 2014 is a 52-week year, with 16 weeks in the first quarter, and 12 weeks in each of the second, third and fourth quarters.

First quarter fiscal year 2014 guidance

  • Same-store sales are expected to increase approximately 1.5 to 2.5 percent at Jack in the Box company restaurants versus a 2.1 percent increase in the year-ago quarter.
  • Same-store sales are expected to increase approximately 1.5 to 2.5 percent at Qdoba company restaurants versus a 1.7 percent increase in the year-ago quarter.

Fiscal year 2014 guidance

  • Same-store sales are expected to increase approximately 1.5 to 2.5 percent at Jack in the Box company restaurants.
  • Same-store sales are expected to increase approximately 2.0 to 3.0 percent at Qdoba company restaurants.
  • Overall commodity costs are expected to increase by approximately 1 percent for the full year, with higher inflation in the first quarter.
  • Restaurant operating margin for the full year, which reflects an approximate 20 basis points impact from the July 2014 minimum wage increase in California, is expected to be approximately 17.7 to 18.1 percent, depending on same-store sales and commodity inflation.
  • SG&A as a percentage of revenue is expected to be approximately 13.5 to 14.0 percent as compared to 14.8 percent in fiscal 2013. G&A as a percentage of system-wide sales is expected to decline to approximately 3.8 percent in fiscal 2014 from 4.3 percent in fiscal 2013.
  • Impairment and other charges as a percentage of revenue are expected to be approximately 70 basis points, excluding restructuring charges.
  • Approximately 10 new Jack in the Box restaurants are expected to open, including approximately 3 company locations.
  • 60 to 70 new Qdoba restaurants are expected to open, of which approximately half are expected to be company locations.
  • Capital expenditures are expected to be $80 to $90 million.
  • The tax rate is expected to be approximately 37 to 38 percent.
  • Operating earnings per share, which the company defines as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains from refranchising, are expected to range from $2.15 to $2.30 in fiscal 2014 as compared to operating earnings per share of $1.82 in fiscal 2013.




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