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Jack in the Box’s Q1 Same-Store Sales Growth: Key Drivers

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Same-store sales growth

Same-store sales growth (or SSSG), expressed as a percentage, measures 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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Fiscal 1Q17 performance

In fiscal 1Q17, the Jack in the Box brand, operating under the umbrella of Jack in the Box (JACK), posted SSSG of 3.1%. Company-owned restaurants posted SSSG of 0.6% while franchised restaurants posted SSSG of 3.9%.

During the quarter, the product mix contributed 2% and the rise in menu price contributed 2.9% of the company-owned restaurants’ SSSG. However, the decline in traffic negatively impacted SSSG by 4.3%. For franchised restaurants, the rise in menu prices and product mix contributed 6% while the decline in traffic lowered SSSG by 2.1%.

Jack in the Box brand’s SSSG of 3.1% outperformed the QSR sandwich segment by 1.6%. The SSSG was driven by the launch of the “brunchfast” platform in late September 2016.

Peers’ comparisons

In fiscal 1Q17, Wendy’s (WEN), McDonald’s (MCD), and Burger King—operating under the umbrella of Restaurant Brands International (QSR)—posted SSSG of 0.85%, 2.7%, and 2.8%, respectively.

Outlook

For the first four weeks of fiscal 2Q17, the brand’s SSSG was -3%. Management blamed flooding in California and a delay in income tax refunds for the decline in SSSG. Considering this effect, the company’s management lowered its SSSG guidance for fiscal 2Q17 to-2%–0%. For 3Q17 and 4Q17, the company expects the brand’s SSSG to return to 2%–3%.

Next, we’ll look at Qdoba’s same-store sales growth in fiscal 1Q17.

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