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EBIT Expansion Drove Jack in the Box’s Earnings in 4Q16

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Earnings per share

So far in this series, we’ve looked at Jack in the Box’s (JACK) revenue, sources of revenue, and EBIT (earnings before interest and tax) margin. Now let’s take a look at Jack in the Box’s 4Q16 EPS (earnings per share).

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4Q16 earnings

In fiscal 4Q16, JACK posted adjusted EPS of $1.03, which is a rise of 41.3% from $0.90 in 4Q15. EPS was driven by revenue growth of 12.5%, expansion of EBIT margins, and share repurchases in the last 12 months. One extra week also contributed $0.09 to 4Q16 EPS.

In the last 12 months, the company has purchased shares worth approximately $292.0 million. By the end of fiscal 2016, the company had $408.0 million in its share repurchase program. Share repurchases lower the number of shares outstanding, thus boosting the company’s EPS.

Peer comparisons

In fiscal 4Q16, Restaurant Brands International (QSR), McDonald’s (MCD), and Wendy’s (WEN) posted rises in EPS of 36.0%, 15.7%, and -25.0%, respectively.

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Outlook

For fiscal 2017, JACK’s management has set the company’s EPS guidance at $4.55–$4.75. Analysts are expecting the company to post EPS of $5.10, which represents a rise of 29.3% from $3.90 in fiscal 2015.

Dividends

Jack in the Box has raised its dividends for fiscal 4Q16 to $0.40, taking the total for fiscal 2016 to $1.30 from $1.10 in fiscal 2015. That represents a rise of 18.2%.

Next, we’ll see how JACK’s fiscal 4Q16 earnings have affected its PE (price-to-earnings) multiple.

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