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What Do Analysts Expect from JACK’s Revenue in Fiscal 2017?

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Dec. 30 2016, Published 3:03 p.m. ET

Revenue sources

Jack in the Box (JACK) earns its revenue from company-operated restaurant sales, franchise fees, and royalties collected from franchisees for its Jack in the Box and Qdoba Mexican Eats brands.

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Fiscal 2017 estimates

For fiscal 2017, analysts expect JACK to post revenue of $1.63 billion, a rise of 1.9% from $1.6 billion in fiscal 2016. This revenue rise is expected to be driven by positive same-store sales growth (or SSSG) and the addition of new units. 

However, with the expectation of optimizing its operations, JACK is focusing on reducing the unit count of its company-operated restaurants to 10%. The company plans to sell some of its company-owned restaurants, a plan that may have prompted analysts to estimate a revenue fall of 7.1% in fiscal 4Q17.

The company’s management expects the SSSG of both the Jack in the Box and Qdoba Mexican Eats brands to be in the range of 2%–3% in fiscal 2017. The SSSG of the Jack in the Box brand is expected to be driven by its Brunchfast menu, which was launched in September 2016, and its value promotions, which include a BLT cheeseburger combo for $4.99.

Qdoba’s SSSG is expected to be driven by product innovations, the enhancement of customer experience, and the expansion of its catering service. In fiscal 2017, the company expects to remodel 70 restaurants and launch a mobile app for a catering service.

Peer comparisons

For the next four quarters, Restaurant Brands International’s (QSR) revenue is expected to rise 5.7%, while Wendy’s (WEN) and McDonald’s (MCD) revenues are expected to fall 25.7% and 7.2%, respectively.

Next, we’ll look at analysts’ earnings per share estimates for fiscal 2017.

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