Jack in the Box, Inc. (JACK)

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Jack In The Box: Buttery Jack burger Drives 2Q sales
Lisa Jennings May 14, 2015
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Company promises more menu innovation to come


Bacon & Swiss Buttery Jack
Jack in the Box



Jack in the Box’s Buttery Jack burger, introduced in January, was the chain’s most successful product launch in recent memory and a harbinger of more menu upgrades to come, executives said Thursday.

In a call with analysts Wednesday, Lenny Comma, Jack in the Box Inc. chairman and CEO, attributed the chain’s 8.9-percent increase in systemwide same-store sales during the second quarter ended April 12 to the success of the premium Buttery Jack, a quarter-pound beef patty drenched in melted garlic-herb butter, with various toppings, served on a signature bun.

Same-store sales at company locations rose 7.4 percent, with about 2.4 percent attributed to transactions, 2.9 percent to menu mix and 2.1 percent to menu price increases, the company said.

Sales were strong across all dayparts, but breakfast and dinner performed the best. Jack in the Box’s long-time offer of breakfast all day boosted sales — a core competency that the company plans to continue to focus on, Comma said.

This year, the quick-service chain has refocused marketing efforts on the taste and appeal of its food, Comma said. That message is also seen in restaurants, where dine-in guests are served burgers in baskets with half-wraps, a more upscale presentation.

Comma said Jack in the Box is in the process of rolling out Coke Freestyle machines systemwide before the end of the year. The customizable beverage machines are currently in about 100 Jack in the Box units.

Menu upgrades will continue, as Jack in the Box focuses on building its reputation as a differentiated player with innovative food offerings rather than competing on value, Comma said.

Average unit volumes for Jack in the Box restaurants are above $1.8 million and expected to grow, he said. Climbing sales have also sparked more interest in unit growth by franchisees, Comma said. The company expects 15 to 20 units to open this year.

Fast-casual sister brand Qdoba Mexican Grill is also showing traction with brand revitalization efforts, despite a negative weather impact during the quarter.

The chain’s 7-percent increase in same-store sales for company locations during the quarter was driven primarily by a 7.4-percent increase in average check, resulting from a move last year to a simplified pricing structure.

Transactions at Qdoba declined 1.3 percent for the quarter, in part because of bad weather.

Jack in the Box Inc. executive vice president and chief financial officer Jerry Rebel noted one week in particular during the quarter when 90 percent of the chain’s restaurants were hit hard by weather, resulting in a 15-percent drop in transactions.

Nonetheless, Qdoba fared well because of ongoing rebranding efforts, which have included menu innovations like Bacon Jalapeno Queso, rolled out in March, as well as Quesomole, a serving of Queso with a scoop of guacamole on top, served with tortilla chips.

In a few weeks, Qdoba will bring back mangos for the summer season with a new spicy tequila mango smothering sauce, as well as the classic Mango Salad with mango-cucumber salsa and cilantro-lime vinaigrette.

In recent weeks, the chain has also debuted three new prototype restaurants with various elements of a new design to reflect the “bolder” flavors on its menu.

Comma said the design elements will be evaluated before releasing the prototype to the system, but all new units will incorporate some exterior and interior trade dress elements.

San Diego-based Jack in the Box Inc. operates and franchises more than 2,200 Jack in the Box restaurants and 600 Qdoba Mexican Grill locations in the U.S., Canada and Guam.




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