Jack in the Box Inc. (JACK) has reported an 8.15 percent rise in profit for the quarter ended Jan. 22, 2017. The company has earned $35.93 million, or $1.11 a share in the quarter, compared with $33.22 million, or $0.92 a share for the same period last year. On an adjusted basis, earnings per share were at $1.18 for the quarter compared with $0.93 in the same period last year.
Revenue during the quarter grew 3.63 percent to $487.93 million from $470.82 million in the previous year period. Gross margin for the quarter contracted 4 basis points over the previous year period to 27.41 percent. Total expenses were 85.01 percent of quarterly revenues, down from 86.72 percent for the same period last year. This has led to an improvement of 171 basis points in operating margin to 14.99 percent.
Operating income for the quarter was $73.12 million, compared with $62.51 million in the previous year period.
Lenny Comma, chairman and chief executive officer, said, “Our first quarter results were mixed, with solid results at the Jack in the Box® brand offset by lower than expected sales and disappointing margins at Qdoba®. We are intent on improving the performance of the Qdoba brand with priorities focused on driving sales growth and managing labor and food costs more effectively. “We were pleased that Jack in the Box system same-store sales outperformed sluggish industry trends during the quarter. And despite the weaker Qdoba results, our commitments to reduce G&A and to return cash to shareholders contributed to a 27 percent increase in operating earnings per share for the quarter. “Consistent with restaurant and retail industry data, we've seen an abrupt downturn in February sales trends for both brands. We believe some of this slowdown may be attributable to delayed tax refunds, as well as record rainfall and flooding in California over the past few weeks which have impacted our Jack in the Box results. “We've made good progress on our refranchising initiative, and as of today, have signed non-binding letters of intent with franchisees to sell approximately 75 restaurants in several different markets.”
For financial year 2017, Jack in the Box Inc. projects diluted earnings per share to be in the range of $4.25 to $4.45.
Operating cash flow improves significantly
Jack in the Box Inc. has generated cash of $70.96 million from operating activities during the quarter, up 58 percent or $26.05 million, when compared with the last year period.
The company has spent $19.68 million cash to meet investing activities during the quarter as against cash outgo of $27.26 million in the last year period. It has incurred net capital expenditure of $20.17 million on net basis during the quarter, down 30.49 percent or $8.84 million from year ago period.
The company has spent $62.21 million cash to carry out financing activities during the quarter as against cash outgo of $28.26 million in the last year period.
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