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

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Same-store sales growth

After posting systemwide negative SSSG (same-store sales growth) for the last five quarters, Jack in the Box (JACK) returned to the positive territory with an SSSG of 0.5%. During the quarter, the company posted an SSSG of 0.6% in company-owned restaurants. In franchised restaurants, the SSSG was at 0.5%. In company-owned restaurants, the SSSG was driven by 2.6% growth in the average check size due to more menu items and a favorable product mix. However, the transaction declined 2.0%, which partially offset some of the increase in the SSSG.

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To drive the SSSG, Jack in the Box is focusing on menu innovations, expanding the delivery service, and enhancing customers’ experience through implementing digital advancements. During the quarter, the company introduced the Cholula Buttery Jack to its Buttery Jack burger line up. The company also launched value offerings like the $3 bundle, which consists of tacos and a drink, and a $4.99 combo, which includes the Jack Spicy Chicken Club Sandwich. By the end of the quarter, the company expanded the delivery service to 75% of its restaurants by partnering with DoorDash, Postmates, and Grubhub. Along with these initiatives, various advertising campaigns drove Jack in the Box’s SSSG during the quarter.

Peer comparisons

McDonald’s (MCD), Wendy’s (WEN), and Burger King of Restaurant Brands International (QSR) posted SSSG of 4.0%, 2.1%, and 1.8%, respectively.

Outlook

For fiscal 2018, Jack in the Box’s management has set the SSSG guidance to be in the range of flat to 0.5% with its SSSG in the fiscal fourth quarter at 1.0%–2.0%.

Next, we’ll discuss Jack in the Box’s third fiscal quarter EPS.

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