Jack in the Box Stock Rose despite Weak Fiscal 3Q17 Earnings



Fiscal 3Q17 performance

Jack in the Box (JACK) posted its fiscal 3Q17 earnings results on August 9. The company posted adjusted EPS (earnings per share) of $0.99 on revenues of $357.8 million. Compared to fiscal 3Q16, the company’s adjusted EPS fell by 7.5% while its revenue fell 3.0%.

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Stock performance

Analysts were expecting the company to post EPS of $1.05 on revenues of $360 million. Despite failing to meet analysts’ earnings and sales estimates, the company’s stock rose due to the improvement of same-store sales growth (or SSSG) in both brands, Jack in the Box, and Qdoba Mexican Eats. During the quarter, Jack in the Box brand has posted systemwide SSSG of -0.2% compared to -0.8% in fiscal 2Q17. Qdoba has posted SSSG of 0.5% compared to -3.2%. As of August 11, Jack in the Box was trading at $97.98, which represents a rise of 3.5% since the announcement of fiscal 3Q17 earnings.

Year-to-date performance

2017 has been a tough year for Jack in the Box. The company’s stock price has fallen 12.2% since the beginning of 2017. During the same period, its peers Wendy’s (WEN), McDonald’s (MCD), and Restaurant Brands International (QSR) have returned 14.1%, 29.2%, and 26.0%, respectively.

Notably, the broader comparative indices, the iShares U.S. Consumer Services ETF (IYC) and S&P 500 Index (SPX), have returned 9.2% and 10.1%, year-to-date, respectively. IYC has invested 11.8% of its stake in restaurant and travel companies.

Series overview

In this series, we’ll look at Jack in the Box’s fiscal 3Q17 earnings call and compare its performance with analysts’ estimates. We’ll also cover management’s guidance and analysts’ estimates for the next four quarters. Finally, we’ll wrap this series up by looking at the company’s valuation multiple and analysts’ recommendations.

First, let’s start by looking at Jack in the Box’s fiscal 3Q17 revenue growth.


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