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What Drove Jack in the Box Brand’s Same-Store Sales Growth in 3Q16?

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Same-store sales growth

Same-store sales growth (or SSSG), expressed as a percentage, is a measure of a company’s rise in revenue from its existing restaurants over a certain period. SSSG is driven by ticket size and traffic. The Jack in the Box brand, which operates under the umbrella of Jack in the Box (JACK ), posted a system-wide SSSG of 1.1%.

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3Q16 performance

Jack in the Box brand’s company-owned restaurants posted SSSG of -0.2%, while franchised restaurants posted SSSG of 1.5%. Jack in the Box credited its focus on quality improvement for the better-than-expected SSSG. The company made changes to 30 of its core products to improve their quality. Also, in this quarter, the company introduced premium products such as the portobello mushroom buttery jack burger, and the triple cheese and hashbrown burrito. On the value front, the company introduced value priced combos, which featured the company’s new and improved burgers.

Peer comparisons

In 3Q16, Burger King, operating under the umbrella of Restaurant Brands International (QSR), posted SSSG of 0.6%, while Wendy’s (WEN) is expected to post SSSG of 2.3%.

Outlook

Jack in the Box has set the SSSG guidance of 1% to 2% for company-owned restaurants in 4Q16. The introduction of Jack’s brewhouse bacon burger, buttery garlic fries, and jumbo breakfast platter for just $2.99 in 4Q16 are expected to drive the brand’s SSSG. Analysts are expecting the brand to post SSSG of 1.8%, 2.2%, 2.9%, and 2.6% in 4Q16, 1Q17, 2Q17, and 3Q17 for company-owned restaurants. On the other hand, franchised restaurants are expected to post SSSG of 1.7%, 2.4%, 3.1%, and 2.7%, respectively.

Next, we will look at same-store sales growth for Qdoba.

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