Jack in the Box Inc. Reports Second Quarter 2024 Earnings

Jack in the Box Inc. ( JACK ) reported Q2 2024 earnings, with same-store sales of 2.5% and Del Taco same-store sales of 1.4%. Systemwide sales were 1.6% and 1.3% respectively. The company's EPS was $1.26, while operating EPS was $1.46. The restaurant level margin was 23.6%, up 2.2% from the previous year.

Jack in the Box signed franchise development agreements in Q2 to enter Tallahassee and expand in Orlando, now having 31 restaurant commitments in Florida. Del Taco signed franchisee development agreements in Q2 for 3 restaurants to enter Greensboro, NC, and 10 additional restaurants in Atlanta. New-market restaurants opened in the past 12 months, including Mexico, averaging almost $100k weekly AUV.

Chief Executive Officer Darin Harris expressed pride in the execution of the Jack and Del Taco teams, delivering better-than-expected earnings and margin performance despite macro headwinds, pressure on low-income consumers, and California's minimum wage legislation. Sales have improved since the introduction of Smashed Jack in mid-March, and the company has a clear plan to regain same-store sales traction through a strong marketing calendar, new LTOs, and an expanded value menu throughout the remainder of 2024.

Jack in the Box performance saw a 2.5% decrease in same-store sales, with both franchise and company-owned restaurants experiencing declines in transactions. Systemwide sales decreased 1.6%. The restaurant-level margin was $23.3 million, or 23.6%, up from $20.4 million, or 21.4%, a year ago, driven primarily by additional company-owned restaurants and commodity deflation. The franchise-level margin was $71.7 million, or 40.4%, a decrease from $73.9 million, or 41.2%, a year ago.

Jack in the Box net restaurant count increased in Q2, with three restaurant openings and no restaurant closures. As of Q2 2024, the company currently has 93 signed agreements for a total of 409 restaurants, with 44 openings and 365 remaining for future development.

Del Taco's second quarter sales decreased 1.4%, with a 1.1% decline in franchise same-store sales and 1.8% decline in company-operated same-store sales. The decrease was partially offset by a lift in average check. Systemwide sales for the fiscal second quarter decreased 1.3%. The restaurant-level margin was $11.4 million, down from 17.3% a year ago, due to refranchising restaurants and increased costs for labor and utilities. The franchise-level margin was $6.1 million, or 28.9%, compared to $5.1 million, or 37.3%, a year ago.

Del Taco expanded its restaurant count in the second quarter, with three openings and no closings. The company-wide performance was also affected by the refranchising efforts, with total revenues decreasing 7.7% to $365.3 million. Net earnings were $25.0 million for the second quarter of fiscal 2024, compared to $26.5 million for the second quarter of fiscal 2023. Adjusted EBITDA was $75.7 million in the second quarter of fiscal 2024 compared to $80.6 million for the prior year quarter. Company-wide SG&A expense for the second quarter was $37.5 million, a decrease of $1.9 million compared to the prior year quarter.

The income tax provisions reflect an effective tax rate of 26.5% in the second quarter of 2024, as compared to 34.8% in the second quarter of fiscal year 2023. The Non-GAAP Operating EPS tax rate for the second quarter of 2024 was 27.1%.

Capital allocation included repurchasing 0.2 million shares of common stock for an aggregate cost of $15.0 million in the second quarter. As of the end of the second quarter, there was $210.0 million remaining under the Board-authorized stock buyback program. On May 10, 2024, the Board of Directors declared a cash dividend of $0.44 per share, to be paid on June 25, 2024, to shareholders of record as of the close of Q2.