Jack in the Box FY3Q Results

Aug 31, 2022 | Bubble Monitor, No Bull Economics


Executive Summary: Fiscal 3Q22 comps declined -0.6% (+0.70% on a 3-year stacked basis), reflecting: fewer transactions; reduced operating hours (particularly during late night); unfavorable mix; & lower units per transaction. These headwinds were mostly offset by a +9% price increase.

While consumer weakness was evident from the <$50k demo, corporate noted growth from the lowest income levels. Value is going to mean different things for different income levels in terms of product types & channels. Strength was noted in California & Texas with challenges in the Northwest & Midwest (because of staffing).

Food margin deteriorated by 3.6% y/y due to +16.8% commodity inflation & unfavorable sales mix. Labor margin also deteriorated by 3.6% y/y due +13.2% wage inflation. Store-level margin is now expected to be 16% with a high-single-digit price increase (or 19% when removing the evolving markets of Oregon, Kansas City, Oklahoma City & Nashville).

373 applications have been submitted for the system’s new crave image remodel program with 173 restaurants approved to receive its incentive offer. Corporate completed a letter of intent to refranchise 7 stores in Oregon by year-end with plans to close the remainder of company stores in the market. The transaction also includes 6 stores in Southern California and a development agreement. Corporate is also working on LOIs to refranchise 2 other evolving markets.

Jack in the Box Financials Graph

Follow us on LinkedInTwitterFacebook, and YouTube!

Disclaimer of Liability
Marketing NFS Graphic Updated
NoBull Posts Thumbnail
Restaurant Research

Email Sign-up

15 Second Posts

2Q23 Retail Same Store Sales

NoBull’s Retail Same Store Sales Report benchmarks 80+ large consumer retail companies by domestic same store sales including annual (2019 – 2022) and quarterly results (2Q22 to 2Q23).

Walmart Investor Presentation: Inflation Here to Stay

While general merchandise prices are lower y/y, they remain elevated compared to 2 years ago. As Walmart does not believe general merchandise and food (dry grocery) & consumable prices are ever going to completely disinflate, management suggests the need for a country-wide wage increase rebalancing.

Interesting Conversation with Fed Chair Powell

Okay, Powell didn’t actually take our call, but we offer a transcript of a potential discussion between the Fed Chair and John Q. Public. It’s very insightful, so please read on.

The Problem with Investment Diversification

Every investment advisor and business student knows that portfolio diversification is key to wealth building. Show me an investor who can beat the S&P 500 Index by buying a few handpicked stocks and I will show you a hedge fund manager in the making. However, there is a huge problem with this strategy that no one is talking about.

Part 3: Analyzing Performance of Low-Income Oriented Retail Companies

We created an index for the financial performance of 5 low-income oriented retail companies to assess the health of this demo. While we recognize that these companies have benefited from the trade-down of higher-income consumers, things look reasonable at least through calendar 2Q23. 

Part 2: Incremental Interest Payments Squeeze Disposable Income

In this post, we quantify the pressure on disposable income driven by credit card & auto loan payment increases since the onset of the Fed rate hikes in early 2022 in addition to the impact of the coming resumption of student loan payments in October 2023.

Part 1: Keeping an Eye on the Consumer’s Top-Line

The consumer’s top-line benefits from a high employment rate, generous raises, and a healthy savings rate which indicates an income surplus.

Teenage Wasteland No More

The American youth (15 – 24-year-old) unemployment rate makes our country look downright productive compared to the rest of the world!

The Fight for Global Manufacturing Gets Personal

Post-covid U.S. exports of goods & services have skyrocketed as American companies have worked hard to onshore their supply chains, providing them with products to sell overseas. Correspondingly, U.S. imports from China have fallen considerably since late 2022 after China’s extended covid lockdowns left their American customers without product to sell.  

China’s Deflation Looks Pretty Good Compared to U.S. Inflation

While the U.S. has been suffering from severe post-covid inflation, China’s prices have been spiraling lower. What’s up with that?

Digital Marketing Opportunities
Restaurant Research

A Restaurant Research LLC Company