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What Drove Jack in the Box’s Same-Store Sales Growth in 4Q16?

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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.

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4Q16 performance

The Jack in the Box brand, operating under the umbrella of Jack in the Box (JACK), posted a systemwide SSSG of 2.0%. Company-owned restaurants posted SSSG of 0.50%, and franchised restaurants posted SSSG of 2.4%. SSSG for company-owned restaurants was driven by 2.9% product mix and 0.60% price rise. However, the fall in traffic offset 3.0% of the rise in SSSG.

Jack in the Box brand’s SSSG was driven by menu innovations and quality improvement. The company introduced Jack’s Brewhouse Bacon Burger, and on the value front, it introduced the Jumbo Breakfast Platter for $2.99.

In September, the brand introduced its Brunchfast menu, which features a brunch burger, a bacon and egg chicken sandwich on an English muffin, and a Southwest Scramble Plate. Earlier, in 2Q16, the company replaced 30 of its core products to improve the quality of its menu items, which also contributed to the rise in fiscal 4Q16 SSSG.

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Peer comparisons

During the same period, Jack in the Box’s peers Burger King, under the umbrella of Restaurant Brands International (QSR), Wendy’s (WEN), and McDonald’s (MCD) posted SSSG of 1.7%, 1.4%, and 3.5%, respectively.

Outlook

The company has set its fiscal 2017 systemwide SSSG guidance for the Jack in the Box brand at 2.0%–3.0%. Management expects promotions such as the BLT (bacon, lettuce, and tomato) cheeseburger combo for $4.99 and other menu innovations to drive the brand’s SSSG in fiscal 2017.

Next, we’ll look at Qdoba’s SSSG in fiscal 4Q16.

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