Jack In The Box Inc. Reports Fourth Quarter FY 2016 Earnings; Issues Guidance For FY 2017; Raises Quarterly Cash Dividend By 33%

Jack in the Box Inc. (NASDAQ: JACK) today reported earnings from continuing operations of $32.6 million, or $0.98 per diluted share, for the fourth quarter ended October 2, 2016, compared with $23.8 million, or $0.65 per diluted share, for the fourth quarter of fiscal 2015. Fiscal 2016 earnings from continuing operations totaled $126.3 million, or $3.70 per diluted share, compared with $112.6 million, or $2.95 per diluted share in fiscal 2015.

Operating earnings per share, a non-GAAP measure which the company defines as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising, were $1.03 in the fourth quarter of fiscal 2016 compared with $0.62 in the prior year quarter. For fiscal year 2016, operating earnings per share were $3.86 compared with $3.00 last year.

The fourth quarter and fiscal year ended October 2, 2016, included 13 weeks and 53 weeks, respectively, as compared to 12 weeks and 52 weeks in the fourth quarter and fiscal year ended September 27, 2015, respectively. The company estimates that the extra week benefited diluted earnings per share by approximately 9 cents in both the fourth quarter and fiscal 2016.

A reconciliation of non-GAAP measurements to GAAP results is provided below, with additional information included in the attachment to this release. Figures may not add due to rounding.
  13 Weeks Ended   12 Weeks Ended   53 Weeks Ended   52 Weeks Ended
Oct. 2,2016

Sept. 27,2015
Oct. 2,2016

Sept. 27,2015
Diluted earnings per share fromcontinuing operations - GAAP $ 0.98 $ 0.65 $ 3.70 $ 2.95
Restructuring charges 0.05 0.00 0.19 0.00
(Gains) losses from refranchising 0.00   (0.02 ) (0.02 ) 0.05
Operating earnings per share - Non-GAAP $ 1.03   $ 0.62   $ 3.86   $ 3.00
 

During fiscal 2016, the company announced plans to reduce general and administrative costs. A comprehensive review of its organizational structure identified cost savings from workforce reductions, relocation and consolidation of the Qdoba ® corporate support center, refranchising initiatives, and information technology synergies across both brands. As a result, restructuring charges of $2.3 million, or approximately $0.05 per diluted share, were recorded during the fourth quarter. Restructuring charges for fiscal year 2016 totaled $10.1 million, or approximately $0.19 per diluted share. Charges consist primarily of employee severance pay and facility closing costs. These charges are included in "impairment and other charges, net" in the accompanying consolidated statements of earnings.

Lenny Comma, chairman and chief executive officer, said, "Operating earnings per share for the fourth quarter exceeded our expectations, due primarily to a reduction in G&A costs resulting from our restructuring initiatives, as well as lower impairment charges and a lower tax rate. We were pleased that Jack in the Box ® system same-store sales outperformed sluggish industry trends, and although sales and traffic growth at Qdoba were solid, margins were hampered by the impact of new restaurant openings.

"Operating earnings per share for the year (excluding the benefit of the 53rd week) grew more than 25 percent, the fifth consecutive year of growth in excess of 20 percent.

"We are happy with the progress we made on our key strategic initiatives during the year, as we made significant headway on reducing our G&A, increased our borrowing capacity to support our capital structure goals, and began implementing plans to increase the franchise mix at Jack in the Box to over 90 percent of the system."

Increase in same-store sales:
    13 Weeks Ended   12 Weeks Ended   53 Weeks Ended   52 Weeks Ended
Oct. 2,2016

Sept. 27,2015
Oct. 2,2016

Sept. 27,2015
Jack in the Box:
Company 0.5% 4.1% 0.0% 5.1%
Franchise 2.4% 6.9% 1.6% 7.0%
System 2.0% 6.2% 1.2% 6.5%
Qdoba:
Company 1.2% 6.1% 1.7% 8.3%
Franchise 0.4% 7.2% 1.1% 10.4%
System 0.8% 6.6% 1.4% 9.3%
 

Jack in the Box system same-store sales increased 2.0 percent for the quarter and exceeded the QSR sandwich segment by 1.3 percentage points for the comparable period, according to The NPD Group's SalesTrack® Weekly for the 13-week time period ended October 2, 2016. Included in this segment are 16 of the top QSR sandwich and burger chains in the country. Company same-store sales increased 0.5 percent in the fourth quarter, with average check up 3.5 percent.

Qdoba same-store sales increased 0.8 percent system-wide and 1.2 percent for company restaurants in the fourth quarter. Company same-store sales reflected a 0.7 percent increase in transactions as well as growth in catering sales.

Consolidated restaurant operating margin decreased by 30 basis points to 19.7 percent of sales in the fourth quarter of 2016, compared with 20.0 percent of sales in the year-ago quarter. Restaurant operating margin for Jack in the Box company restaurants increased 70 basis points to 21.0 percent of sales. The increase was due primarily to favorable food and packaging costs, which were partially offset by higher costs related to equipment upgrades, maintenance and repair expenses, and minimum wage increases in California that went into effect in January 2016. The decrease in food and packaging costs as a percentage of sales resulted from the benefit of commodity deflation of approximately 4.0 percent in the quarter, favorable product mix changes and menu price increases. Restaurant operating margin for Qdoba company restaurants decreased 220 basis points to 17.3 percent of sales. The decrease was due primarily to costs associated with a greater number of new restaurant openings, increased promotional activity, and higher costs related to technology upgrades which more than offset the sales growth and benefits from commodity deflation of approximately 3.4 percent in the quarter.

Franchise margin as a percentage of total franchise revenues improved to 53.7 percent in the fourth quarter from 51.4 percent in the prior year quarter. The improvement was due primarily to higher royalty revenue for both brands and higher rental income from Jack in the Box franchised restaurants resulting from increases in franchise average unit volumes.

SG&A expense for the fourth quarter decreased by $6.3 million and was 12.1 percent of revenues as compared to 15.4 percent in the prior year quarter. Key items contributing to the decrease were lower advertising costs at Qdoba due to the timing of promotional activities and a $1.2 million decrease in pension and postretirement benefits related to the sunsetting of the company's qualified pension plan on December 31, 2015. In addition, mark-to-market adjustments on investments supporting the company's non-qualified retirement plans positively impacted SG&A by $0.2 million in the fourth quarter of 2016 as compared to a negative impact of $1.1 million in the fourth quarter of 2015, resulting in a year-over-year decrease in SG&A of $1.3 million. These decreases were partially offset by the impact of the 53rd week.

Interest expense, net, increased by $3.5 million in the fourth quarter due to increased leverage and a higher effective interest rate for 2016.

Capital Allocation

The company repurchased approximately 425,000 shares of its common stock in the fourth quarter of 2016 at an average price of $98.42 per share for an aggregate cost of $41.9 million. During fiscal year 2016, the company repurchased approximately 3,876,000 shares at an average price of $75.29 per share, for an aggregate cost of $291.9 million. As of the end of fiscal year 2016, the company had $408.2 million remaining under stock-buyback programs authorized by its Board of Directors, of which $108.2 million expires in November 2017 and $300.0 million expires in November 2018.

As previously disclosed, the company made an accelerated pension contribution of $80 million during the fourth quarter of 2016. This tax-deductible contribution will decrease the company's future G&A costs, as well as reduce, if not fully eliminate, pension contributions over the next several years.

In addition, the company acquired 14 franchised Qdoba restaurants in one market during the fourth quarter of 2016 for approximately $20 million.

The company also announced today that on November 17, 2016, its Board of Directors declared a quarterly cash dividend of $0.40 per share on the company's common stock, representing a 33 percent increase from the previous quarterly dividend of $0.30 per share. The dividend is payable on December 16, 2016, to shareholders of record at the close of business on December 5, 2016.

Guidance

The following guidance and underlying assumptions reflect the company's current expectations for the first quarter and fiscal year ending October 1, 2017. Fiscal 2017 is a 52-week year, with 16 weeks in the first quarter, 12 weeks in each of the second, third and fourth quarters. Fiscal 2016 was a 53-week year, with the additional week occurring in the fourth quarter.

First quarter fiscal year 2017 guidance

  • Same-store sales increase of approximately 2.0 to 4.0 percent at Jack in the Box system restaurants versus a 1.4 percent increase in the year-ago quarter.
  • Same-store sales of approximately flat to up 1.0 percent at Qdoba company restaurants versus a 1.5 percent increase in the year-ago quarter.

Fiscal year 2017 guidance
  • Same-store sales increase of approximately 2.0 to 3.0 percent at Jack in the Box system restaurants.
  • Same-store sales increase of approximately 2.0 to 3.0 percent at Qdoba company restaurants.
  • Commodity deflation of approximately flat to down 1 percent for both Jack in the Box and Qdoba.
  • Consolidated restaurant operating margin of approximately 20.0 to 21.0 percent.
  • SG&A as a percentage of revenues of approximately 11.0 to 11.5 percent as compared to 12.7 percent in fiscal 2016.
  • Impairment and other charges as a percentage of revenues of approximately 70 basis points, excluding restructuring charges.
  • Approximately 20 to 25 new Jack in the Box restaurants opening system-wide, the majority of which will be franchise locations.
  • Approximately 60 to 70 new Qdoba restaurants, of which approximately 40 are expected to be company locations.
  • Capital expenditures of $105 to $115 million.
  • Tax rate of approximately 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 or losses from refranchising, ranging from $4.55 to $4.75. This guidance assumes share repurchases of approximately $408 million during the year, representing the amount remaining under current Board authorizations.

Conference call

The company will host a conference call for financial analysts and investors on Tuesday, November 22, 2016, beginning at 8:30 a.m. PT (11:30 a.m. ET). The conference call will be broadcast live over the Internet via the Jack in the Box Inc. corporate website. To access the live call through the Internet, log onto the Investors section of the Jack in the Box Inc. website at http://investors.jackinthebox.com at least 15 minutes prior to the event in order to download and install any necessary audio software. A replay of the call will be available through the Jack in the Box Inc. corporate website for 21 days, beginning at approximately 11:30 a.m. PT on November 22.

About Jack in the Box Inc.

Jack in the Box Inc. (NASDAQ: JACK), based in San Diego, is a restaurant company that operates and franchises Jack in the Box ® restaurants, one of the nation's largest hamburger chains, with more than 2,200 restaurants in 21 states and Guam. Additionally, through a wholly owned subsidiary, the company operates and franchises Qdoba Mexican Eats ®, a leader in fast-casual dining, with approximately 700 restaurants in 47 states, the District of Columbia and Canada. For more information on Jack in the Box and Qdoba, including franchising opportunities, visit www.jackinthebox.com or www.qdoba.com.

Safe harbor statement

This press release contains forward-looking statements within the meaning of the federal securities laws. Such statements are subject to substantial risks and uncertainties. A variety of factors could cause the company's actual results to differ materially from those expressed in the forward-looking statements, including the following: the success of new products and marketing initiatives; the impact of competition, unemployment, trends in consumer spending patterns and commodity costs; the company's ability to reduce G&A; the company's ability to execute its refranchising strategy; 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, and risks relating to expansion into new markets; litigation risks; food safety incidents or negative publicity impacting the reputations of the company's brands; 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 RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS (Unaudited)

Operating earnings per share, a non-GAAP measure, is defined by the company as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising. Management believes this non-GAAP financial measure provides important supplemental information to assist investors in analyzing the performance of the company's core business. In addition, the company uses operating earnings per share in establishing performance goals for purposes of executive compensation. The company encourages investors to rely upon its GAAP numbers but includes this non-GAAP financial measure as a supplemental metric to assist investors. This non-GAAP financial measure should not be considered as a substitute for, or superior to, financial measures calculated in accordance with GAAP. In addition, this non-GAAP financial measure used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Below is a reconciliation of non-GAAP operating earnings per share to the most directly comparable GAAP measure, diluted earnings per share from continuing operations. Figures may not add due to rounding.

  13 Weeks Ended   12 Weeks Ended   53 Weeks Ended   52 Weeks Ended
Oct. 2,2016

Sept. 27,2015
Oct. 2,2016

Sept. 27,2015
Diluted earnings per share fromcontinuing operations - GAAP $ 0.98 $ 0.65 $ 3.70 $ 2.95
Restructuring charges 0.05 0.00 0.19 0.00
(Gains) losses from refranchising 0.00   (0.02 ) (0.02 ) 0.05
Operating earnings per share - Non-GAAP $ 1.03   $ 0.62   $ 3.86   $ 3.00

 

JACK IN THE BOX INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

(Unaudited)
 
 

13 Weeks Ended
 

12 Weeks Ended
 

53 Weeks Ended
 

52 Weeks Ended
October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015
Revenues:
Company restaurant sales $ 300,693 $ 265,408 $ 1,204,535 $ 1,156,863
Franchise rental revenues 57,689 52,666 232,907 226,702
Franchise royalties and other 40,037   35,994   161,889   156,752  
398,419   354,068   1,599,331   1,540,317  
Operating costs and expenses, net:
Company restaurant costs:
Food and packaging 90,200 82,198 363,002 361,988
Payroll and employee benefits 83,516 71,654 334,470 313,302
Occupancy and other 67,814   58,421   264,158   246,023  
Total company restaurant costs 241,530 212,273 961,630 921,313
Franchise occupancy expenses 41,677 39,281 170,152 170,102
Franchise support and other costs 3,568 3,773 15,991 15,688
Selling, general and administrative expenses 48,281 54,592 203,816 221,145
Impairment and other charges, net 4,459 3,689 19,057 11,757
(Gains) losses on the sale of company-operated restaurants (6 ) (1,214 ) (1,230 ) 3,139  
339,509   312,394   1,369,416   1,343,144  
Earnings from operations 58,910 41,674 229,915 197,173
Interest expense, net 8,382   4,866   31,081   18,803  
Earnings from continuing operations and before income taxes 50,528 36,808 198,834 178,370
Income taxes 17,967   13,030   72,564   65,769  
Earnings from continuing operations 32,561 23,778 126,270 112,601
Losses from discontinued operations, net of income tax benefit (580 ) (637 ) (2,197 ) (3,789 )
Net earnings $ 31,981   $ 23,141   $ 124,073   $ 108,812  
 
Net earnings per share - basic:
Earnings from continuing operations $ 1.00 $ 0.66 $ 3.74 $ 3.00
Losses from discontinued operations (0.02 ) (0.02 ) (0.07 ) (0.10 )
Net earnings per share (1) $ 0.98   $ 0.64   $ 3.68   $ 2.89  
Net earnings per share - diluted:
Earnings from continuing operations $ 0.98 $ 0.65 $ 3.70 $ 2.95
Losses from discontinued operations (0.02 ) (0.02 ) (0.06 ) (0.10 )
Net earnings per share (1) $ 0.97   $ 0.63   $ 3.63   $ 2.85  
 
Weighted-average shares outstanding:
Basic 32,694 36,276 33,735 37,587
Diluted 33,085 36,822 34,146 38,215
 
Cash dividends declared per common share $ 0.30 $ 0.30 $ 1.20 $ 1.00
 
____________________________

(1)

 
  Earnings per share may not add due to rounding.
 

 

JACK IN THE BOX INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)
 
  October 2, 2016   September 27, 2015
ASSETS
Current assets:
Cash $ 17,030 $ 17,743
Accounts and other receivables, net 73,360 47,975
Inventories 8,229 7,376
Prepaid expenses 40,398 16,240
Assets held for sale 14,259 15,516
Other current assets 2,129   3,106  
Total current assets 155,405   107,956  
Property and equipment, at cost:
Land 117,166 112,991
Buildings 1,116,244 1,091,237
Restaurant and other equipment 331,644 315,235
Construction in progress 40,522   43,914  
1,605,576 1,563,377
Less accumulated depreciation and amortization (886,526 ) (835,114 )
Property and equipment, net 719,050   728,263  
Intangible assets, net 14,042 14,765
Goodwill 166,046 149,027
Other assets, net 294,248   303,968  
$ 1,348,791   $ 1,303,979  
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Current maturities of long-term debt $ 57,574 $ 26,677
Accounts payable 40,736 32,137
Accrued liabilities 181,250   170,575  
Total current liabilities 279,560   229,389  
Long-term debt, net of current maturities 937,512 688,579
Other long-term liabilities 348,925 370,058
Stockholders' (deficit) equity:
Preferred stock $0.01 par value, 15,000,000 shares authorized, none issued
Common stock $0.01 par value, 175,000,000 shares authorized, 81,598,524 and 81,096,156 issued, respectively 816 811
Capital in excess of par value 432,564 402,986
Retained earnings 1,399,721 1,316,119
Accumulated other comprehensive loss (187,021 ) (132,530 )
Treasury stock, at cost, 49,190,992 and 45,314,529 shares, respectively (1,863,286 ) (1,571,433 )
Total stockholders' (deficit) equity (217,206 ) 15,953  
$ 1,348,791   $ 1,303,979  
 

 

JACK IN THE BOX INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)
 
 

53 Weeks Ended
 

52 Weeks Ended
October 2, 2016 September 27, 2015
Cash flows from operating activities:
Net earnings $ 124,073 $ 108,812
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 92,844 89,468
Deferred finance cost amortization 2,736 2,309
Excess tax benefits from share-based compensation arrangements (7,461 ) (18,602 )
Deferred income taxes 34,973 (3,191 )
Share-based compensation expense 11,455 12,420
Pension and postretirement expense 13,484 18,749
Gains on cash surrender value of company-owned life insurance (5,365 ) 1,240
(Gains) losses on the sale of company-operated restaurants (1,230 ) 3,139
Losses on the disposition of property and equipment 2,654 1,847
Impairment charges and other 4,759 6,815
Changes in assets and liabilities:
Accounts and other receivables (28,181 ) (82 )
Inventories (713 ) 105
Prepaid expenses and other current assets (15,367 ) 35,255
Accounts payable 2,225 2,281
Accrued liabilities 8,662 798
Pension and postretirement contributions (101,052 ) (25,374 )
Other (4,314 ) (9,114 )
Cash flows provided by operating activities 134,182   226,875  
Cash flows from investing activities:
Purchases of property and equipment (96,615 ) (86,226 )
Purchases of assets intended for sale and leaseback (9,785 ) (10,396 )
Proceeds from the sale and leaseback of assets 17,123
Proceeds from the sale of company-operated restaurants 1,439 3,951
Collections on notes receivable 3,555 5,917
Acquisition of franchise-operated restaurants (19,816 )
Other (299 ) 2,281  
Cash flows used in investing activities (104,398 ) (84,473 )
Cash flows from financing activities:
Borrowings on revolving credit facilities 705,000 857,000
Repayments of borrowings on revolving credit facilities (817,578 ) (768,000 )
Proceeds from issuance of debt 417,578 300,000
Principal repayments on debt (26,154 ) (198,397 )
Debt issuance costs (2,385 ) (2,030 )
Dividends paid on common stock (40,295 ) (37,390 )
Proceeds from issuance of common stock 10,564 15,170
Repurchases of common stock (284,645 ) (320,163 )
Excess tax benefits from share-based compensation arrangements 7,461   18,602  
Cash flows used in financing activities (30,454 ) (135,208 )
Effect of exchange rate changes on cash (43 ) (29 )
Net (decrease) increase in cash (713 ) 7,165
Cash at beginning of period 17,743   10,578  
Cash at end of period $ 17,030   $ 17,743  
 

JACK IN THE BOX INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION

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

CONSOLIDATED STATEMENTS OF EARNINGS DATA

(Unaudited)
 
 

13 Weeks Ended
 

12 Weeks Ended
 

53 Weeks Ended
 

52 Weeks Ended
October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015
Revenues:
Company restaurant sales 75.5 % 75.0 % 75.3 % 75.1 %
Franchise rental revenues 14.5 % 14.9 % 14.6 % 14.7 %
Franchise royalties and other 10.0 % 10.2 % 10.1 % 10.2 %
Total revenues 100.0 % 100.0 % 100.0 % 100.0 %
Operating costs and expenses, net:
Company restaurant costs:
Food and packaging (1) 30.0 % 31.0 % 30.1 % 31.3 %
Payroll and employee benefits (1) 27.8 % 27.0 % 27.8 % 27.1 %
Occupancy and other (1) 22.6 % 22.0 % 21.9 % 21.3 %
Total company restaurant costs (1) 80.3 % 80.0 % 79.8 % 79.6 %
Franchise occupancy expenses (2) 72.2 % 74.6 % 73.1 % 75.0 %
Franchise support and other costs (3) 8.9 % 10.5 % 9.9 % 10.0 %
Selling, general and administrative expenses 12.1 % 15.4 % 12.7 % 14.4 %
Impairment and other charges, net 1.1 % 1.0 % 1.2 % 0.8 %
(Gains) losses on the sale of company-operated restaurants 0.0 % (0.3 )% (0.1 )% 0.2 %
Earnings from operations 14.8 % 11.8 % 14.4 % 12.8 %
Income tax rate (4) 35.6 % 35.4 % 36.5 % 36.9 %
 
____________________________
(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 earnings from continuing operations and before income taxes.
 

The following table presents Jack in the Box and Qdoba company restaurant sales, costs and margin, and restaurant costs and margin as a percentage of the related sales. Percentages may not add due to rounding.

 

SUPPLEMENTAL COMPANY RESTAURANT OPERATIONS DATA

(Dollars in thousands)

(Unaudited)
 
  13 Weeks Ended   12 Weeks Ended   53 Weeks Ended   52 Weeks Ended
October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015
Jack in the Box:                
Company restaurant sales $ 193,639 $ 176,739 $ 789,040 $ 782,525
Company restaurant costs:
Food and packaging 56,396 29.1 % 55,025 31.1 % 235,538 29.9 % 247,931 31.7 %
Payroll and employee benefits 55,275 28.5 % 48,371 27.4 % 223,019 28.3 % 215,598 27.6 %
Occupancy and other 41,347   21.4 % 37,484   21.2 % 162,869   20.6 % 157,281   20.1 %
Total company restaurant costs 153,018   79.0 % 140,880   79.7 % 621,426   78.8 % 620,810   79.3 %
Restaurant margin $ 40,621   21.0 % $ 35,859   20.3 % $ 167,614   21.2 % $ 161,715   20.7 %
Qdoba:
Company restaurant sales $ 107,054 $ 88,669 $ 415,495 $ 374,338
Company restaurant costs:
Food and packaging 33,804 31.6 % 27,173 30.6 % 127,464 30.7 % 114,057 30.5 %
Payroll and employee benefits 28,241 26.4 % 23,283 26.3 % 111,451 26.8 % 97,704 26.1 %
Occupancy and other 26,467   24.7 % 20,937   23.6 % 101,289   24.4 % 88,742   23.7 %
Total company restaurant costs 88,512   82.7 % 71,393   80.5 % 340,204   81.9 % 300,503   80.3 %
Restaurant margin $ 18,542   17.3 % $ 17,276   19.5 % $ 75,291   18.1 % $ 73,835   19.7 %
 

The following table presents franchise revenues, costs and margin in each period:
 

SUPPLEMENTAL FRANCHISE OPERATIONS DATA

(Dollars in thousands)

(Unaudited)
 
 

13 Weeks Ended
 

12 Weeks Ended
 

53 Weeks Ended
 

52 Weeks Ended
October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015
Franchise rental revenues $ 57,689 $ 52,666 $ 232,907 $ 226,702
 
Royalties 39,176 35,100 158,514 152,759
Franchise fees and other 861   894   3,375   3,993  
Franchise royalties and other 40,037   35,994   161,889   156,752  
Total franchise revenues 97,726   88,660   394,796   383,454  
 
Rental expense 34,025 31,638 137,808 136,974
Depreciation and amortization 7,652   7,643   32,344   33,128  
Franchise occupancy expenses 41,677 39,281 170,152 170,102
Franchise support and other costs 3,568   3,773   15,991   15,688  
Total franchise costs 45,245   43,054   186,143   185,790  
Franchise margin $ 52,481   $ 45,606   $ 208,653   $ 197,664  
Franchise margin as a % of franchise revenues 53.7 % 51.4 % 52.9 % 51.5 %
 

The following table provides information related to our operating segments in each period:

 

SUPPLEMENTAL SEGMENT REPORTING INFORMATION

(In thousands)

(Unaudited)
 
 

13 Weeks Ended
 

12 Weeks Ended
 

53 Weeks Ended
 

52 Weeks Ended
October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015
Revenues by segment:
Jack in the Box restaurant operations $ 286,120 $ 260,442 $ 1,162,258 $ 1,145,176
Qdoba restaurant operations 112,299   93,626   437,073   395,141  
Consolidated revenues $ 398,419   $ 354,068   $ 1,599,331   $ 1,540,317  
Earnings from operations by segment:
Jack in the Box restaurant operations $ 71,982 $ 57,707 $ 290,346 $ 265,230
Qdoba restaurant operations 13,718 9,999 47,250 47,264
Shared services and unallocated costs (26,796 ) (27,246 ) (108,911 ) (112,182 )
Gains (losses) on the sale of company-operated restaurants 6   1,214   1,230   (3,139 )
Consolidated earnings from operations 58,910 41,674 229,915 197,173
Interest expense, net 8,382   4,866   31,081   18,803  
Consolidated earnings from continuing operations and before income taxes $ 50,528   $ 36,808   $ 198,834   $ 178,370  
Total depreciation expense by segment:
Jack in the Box restaurant operations $ 15,878 $ 15,546 $ 66,287 $ 64,597
Qdoba restaurant operations 4,903 3,924 19,306 17,103
Shared services and unallocated costs 1,553   1,633   6,489   7,078  
Consolidated depreciation expense $ 22,334   $ 21,103   $ 92,082   $ 88,778  
 

The following table summarizes the changes in the number and mix of Jack in the Box ("JIB") and Qdoba company and franchise restaurants in each fiscal year:

 

SUPPLEMENTAL RESTAURANT ACTIVITY INFORMATION

(Unaudited)
 
  2016   2015
Company   Franchise   Total Company   Franchise   Total
Jack in the Box:
Beginning of year 413 1,836 2,249 431 1,819 2,250
New 4 12 16 2 16 18
Refranchised (1 ) 1 (21 ) 21
Acquired from franchisees 1 (1 ) 7 (7 )
Closed   (10 ) (10 ) (6 ) (13 ) (19 )
End of period 417   1,838   2,255   413   1,836   2,249  
% of JIB system 18 % 82 % 100 % 18 % 82 % 100 %
Qdoba:
Beginning of year 322 339 661 310 328 638
New 35 18 53 17 22 39
Acquired from franchisees 14 (14 )
Closed (4 ) (11 ) (15 ) (5 ) (11 ) (16 )
End of period 367   332   699   322   339   661  
% of Qdoba system 53 % 47 % 100 % 49 % 51 % 100 %
Consolidated:            
Total system end of period 784   2,170   2,954   735   2,175   2,910  
% of consolidated system 27 % 73 % 100 % 25 % 75 % 100 %
 

View source version on businesswire.com: http://www.businesswire.com/news/home/20161121006089/en/

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX