Can Jack in the Box’s Q2 Earnings Boost Its Stock Price?



JACK’s performance

Jack in the Box (JACK) is scheduled to report its earnings results for the second quarter of fiscal 2019 after the market closes on May 15. On May 10, the company was trading at $77.89, a fall of 1.2% since its announcement of its fiscal 2019 first-quarter earnings results on February 20.

The stock is trading at a discount of 17.1% to its 52-week high of $93.98 and a premium of 5.0% to its 52-week low of $74.19.

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In the first quarter, Jack in the Box posted adjusted EPS of $1.35 on revenue of $290.8 million, beating analysts’ EPS expectation of $1.28 and their revenue estimate of $274.43 million. After JACK posted strong first-quarter earnings results, its stock initially rose. However, the continued feud between JACK’s management and the National Jack in the Box Franchisee Association, which represents ~89% of JACK’s franchise system, appears to have caused the company’s stock price to fall.

Year-to-date performance

YTD (year-to-date), JACK has returned just 0.3%, lagging the broader equity market. The S&P 500 Index (SPY) has returned 14.9% YTD, while the Consumer Discretionary Select Sector SPDR ETF (XLY) has returned 18.5% YTD. XLY invests 8.0% of its holdings in restaurant and travel companies.

JACK’s peers McDonald’s (MCD), Wendy’s (WEN), and Restaurant Brands International (QSR) have returned 12.6%, 20.8%, and 28.6%, respectively, YTD.

Series overview

With JACK’s second-quarter earnings around the corner, in this series, we’ll be looking at analysts’ revenue and EPS expectations. We’ll also be covering the company’s guidance and analysts’ estimates for fiscal 2019. In the end, we’ll take a look at analysts’ recommendations for JACK along with its valuation.


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