Jack in the Box Stock Up on Q1 Earnings Beat, Revenues Lag Estimates

Core Viewpoint - Jack in the Box Inc. (JACK) reported mixed first-quarter fiscal 2025 results, with earnings exceeding expectations while revenues fell short, leading to a 10.8% increase in share price during after-hours trading [1] Earnings & Revenue Details - Operating earnings per share (EPS) for the fiscal first quarter was $1.92, surpassing the Zacks Consensus Estimate of$ 1.71, but down 1.5% from $1.95 in the prior-year quarter [2] - Quarterly revenues totaled$ 469.4 million, missing the consensus mark of $470.2 million, and declined 3.7% year-over-year due to Del Taco refranchising transactions [3] - Franchise rental revenues increased by 3% year-over-year to$ 116.5 million, while franchise royalties and other revenues rose by 1% to $74 million [3] Comps Discussion - Company-owned same-store sales decreased by 0.4% year-over-year, contrasting with a 2% growth in the prior-year quarter [5] - Same-store sales at franchised stores increased by 0.5% year-over-year, compared to 0.7% growth in the prior-year quarter [5] - Systemwide same-store sales rose by 0.4% year-over-year, down from 0.8% growth reported in the year-ago quarter, attributed to reduced transactions and an unfavorable mix shift [5] Operating Highlights - The total restaurant-level adjusted margin was 20%, unchanged year-over-year [7] - Food and packaging costs as a percentage of company restaurant sales decreased by 300 basis points year-over-year to 25.6% [7] - The total franchise level margin was 39.2%, down from 40% in the prior-year quarter [7] Balance Sheet - As of January 19, 2025, cash totaled$ 75 million, up from $24.7 million as of September 29, 2024 [9] - Long-term debt (net of current maturities) was$ 1.69 billion as of January 19, 2025, compared to $1.7 billion as of September 29, 2024 [9] - The company repurchased 0.1 million shares for$ 5 million during the fiscal first quarter [10] Fiscal 2025 Outlook - Management anticipates adjusted EBITDA to be in the range of $288-$ 303 million for fiscal 2025 [11] - Depreciation and Amortization expenses are expected to be between $58 million and$ 60 million [11] - Company-wide capital expenditures are now expected to be in the range of $100-$ 105 million, down from the previous expectation of $105-$ 115 million [11] - Jack in the Box's same-store sales are anticipated to be flat to up 1%, while Del Taco's same-store sales are expected to be flat to down 1% [12]