Jack in the Box, Inc. (JACK)

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Qdoba Puts Spring in Jack in the Box’s Profit
Feb. 17, 2015 5:02 p.m. ET By MARIA ARMENTAL
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Strong sales at Qdoba Mexican Grill restaurants boosted restaurant operator Jack in the Box ’s operating profit in the first quarter.

Sales at Qdoba rose 13% at established company-operated locations and 14% including franchises, the fourth consecutive quarter of growth above 7%. The company said simplified menu pricing along with less discounting and double-digit growth in catering sales boosted the latest results.

Sales at established restaurants rose 4.4% system-wide at the company’s namesake burger chain, driven by breakfast and late-night sales.

For the current quarter, the San Diego company expects sales at established restaurants to increase 7% to 9% at Qdoba company-owned restaurants, compared with 7.2% for the year-ago period, and between 5% and 7% at its flagship chain, compared with a 0.9% increase in the year-ago quarter.

Shares rose 3.3% in recent after-hours trading to $91.09, above the 52-week-high of at $88.55 set on Feb. 6 during regular trading.

With the strong results, Jack in the Box raised its view for the year. The company now expects operating profit of $2.85 to $2.97 a share, with same-store sales rising 7.5% to 9.5% at Qdoba company-owned stores and 3.5% to 4.5% at company-owned flagship restaurants, compared with its earlier view of $2.73 to $2.88 a share, with same-store sales increasing 1.5%-2.5% at its flagship chain and 6%-8% at Qdoba.

Fast-food restaurants have been trying to improve customer traffic beyond traditional mealtimes. Jack in the Box, for example, allows customers to order any product, including breakfast, regardless of time of day and added a late-night menu that it said helped drive sales at its flagship chain in the latest period.





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