Jack in the Box (JACK) Stock Soars on 3Q Earnings

Shares of Jack in the Box Inc. (JACK) were up +6.21 or +11.20 percent to $61.66 per share in premarket trading on Thursday, after the company released better than expected third quarter earnings late yesterday. Jack in the Box stock closed at $55.45, down -2.11 or -3.67 percent in Wednesday's regular trading session.

San Diego, California based Jack in the Box was founded in 1951 and specializes in fast food restaurants with the majority of its 2,200 restaurant locations on the West Coast.
Jack in the Box is expanding eastward, having recently opened locations in Arizona, Colorado, Texas, Indiana and Ohio. The company has over 22,000 employees and had revenue of $2.25 billion in 2013.

Jack in the Box reported third quarter earnings of $26.1 million, or $0.64 per diluted share, versus $17.3 million, or $0.38 per diluted share in the same period one year ago. Analysts expected earnings of $0.57 per share. Same store sales increased +2.4 percent in the quarter, compared to +1.2 percent in the same quarter last year.

Jack in the Box Chairman and Chief Executive Officer, Lenny Comma, said in the company's press release that, "Third quarter operating earnings per share increased 59 percent, driven by another quarter of better than expected same store sales growth at Qdoba Mexican Grill, solid same store sales growth at Jack in the Box, margin expansion, lower overhead, and a nearly 10 percent reduction in our diluted share count as we continued to use our growing free cash flow to return cash to shareholders.

Qdoba's same store sales increased by +7.2 percent for the company's restaurants and +7.5 percent system wide, compared to growth of +7.0 percent in the previous quarter. Growth in same store sales for the Jack in the Box system exceeded the QSR sandwich segment by +2.4 percentage points for the third quarter. The sandwich segment of the NPD Group SalesTrack Weekly includes 16 of the top QSR sandwich and burger chains nationwide.

Jack in the Box also issued its full year 2014 guidance and announced a quarterly dividend. The company expects earnings per share of $2.38 to $2.45 for the year. The analyst consensus was for full year EPS of $2.36. The company will pay shareholders a dividend of $0.20 per share on September 2nd, to holders of record on August 18th.

The company has been aggressively repurchasing its own stock, buying back 1,270,000 shares of common stock at an average price of $59.04 per share in the third quarter, for an aggregate price of $75.0 million. So far this year, Jack in the Box has repurchased around 4,948,000 shares at an average price of $55.98 per share, spending approximately $277.0 million. In July, the company's board authorized an additional $100 million for its stock buyback program.

Jack in the Box stock will open a little more than a dollar below its yearly high this morning. Given the fact that the stock has a dividend yield of +1.44 percent, with some analysts upwardly revising their outlooks, Jack in the Box stock could easily test its yearly high.

Other News About Jack in the Box
New breakfast menu items will be available this morning.
Sharon John to Join Jack in the Box Inc. Board of Directors
CEO of Build-A-Bear Workshop Inc to join JACK's board.

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Published on Aug 7, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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