Jack in the Box Corporate Insights

Nov 29, 2022 | Corporate Insights, No Bull Economics


Jack in the Box was the last public restaurant company to report results. The chain’s fiscal 4Q22 system comps increased +4% y/y (+16.8% on a 3-year stacked basis), reflecting +10.4% price, -1.5% mix & -4.9% traffic. Results reflected an improvement in: dining room openings (60% of system); innovation, upsell & add-ons sales; digital progress which is helping frequency; and late-night. Notably, 70% of the system operated at reduced operating hours which was flat compared to fiscal 3Q but down from 80% in 2Q. All product categories & dayparts demonstrated positive sales with dinner & late night showing notable growth (reflecting improved late-night operating hours & traction with its redesigned Munchie Meal platform). Interestingly, management reported that the retention of its value consumers was reflected by flat transactions for <$7 orders vs. fiscal 3Q despite price increases.

Commodity costs increased +14.9% y/y, primarily driven by proteins, sauces & oil, and wage inflation increased +11.3% y/y. In any case, plans to improve store-level margins by 2% will be driven by equipment, training, standardized product builds & strategic pricing tools. This includes more efficient cheese pumps, less intensive prep & reduced waste. FY23 restaurant-level margin guidance of 18% to 20% includes high single-digit price increases.

JACK’s corporate EBITDA margin rebounded to 18.8% from 18.1% during fiscal 3Q22 but is still down from 26.4% during fiscal 1Q22. Things are trending in the right direction so long as the chain, industry & consumer get the benefit of moderating costs.

Jack in the Box Financials 4Q
4Q Jack in the Box Financials

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