Jack in the Box earnings, sales down for Q2

by Meat&Poultry staff
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SAN DIEGO — Jack in the Box Inc. announced net earnings of $17.7 million, or 32 cents per diluted share, for the second quarter ended April 11, compared with $29,861,000 from the same quarter last year. Revenues for the quarter were $ 529,706,000 compared to $578,411,000 in 2009. Same-store sales at Jack in the Box company restaurants decreased 8.6% in the second quarter of 2010 compared with a year-ago increase of 0.4%.

“California experienced continued stabilization and was our best-performing market for the second quarter on both a one- and two-year basis,” said Linda A. Lang, chairman, chief executive officer and president. “Although both transactions and average check improved from the first quarter, we don’t expect significant improvement in underlying fundamentals until high unemployment rates in our major markets for our key customer demographics begin to improve.”

Food and packaging costs were 70 basis points better than prior year, according to the company. Overall commodity costs were approximately 1% lower in the quarter versus prior year. Beef was slightly favorable in the quarter, and the benefit of lower costs for poultry, shortening and potatoes offset higher produce and pork costs.

“More than 48% of the Jack in the Box system is now franchised, and we expect to cross the 50% mark later this quarter,” Ms. Lang said. “We remain on track to achieve our long-term goal to increase the percentage of franchise ownership to 70% to 80% by the end of fiscal year 2013.”

In early February, the company debuted a new platform, Grilled Sandwiches, with two varieties, each served on a new grilled artisan bread: Turkey, Bacon & Cheddar and Deli Trio, which features Genoa salami, sliced ham, roasted turkey, two slices of provolone cheese and two pickle fillets topped with a creamy Italian sauce. Grilled Sandwiches are generally priced at $3.99, plus tax.

In March, the company expanded its line of entrée salads by adding a Grilled Chicken Salad. The salad is topped with strips of grilled chicken and meets the nutritional criteria for HealthyDiningFinder.com, an online resource featuring dietician-approved healthy dining menu options.

“Our marketing strategy is to target multiple dayparts and balance our advertising and promotions to feature innovative premium products along with value-priced offerings,” Ms. Lang said.

Jack in the Box launched its Grilled Breakfast Sandwich in April. Featuring grilled artisan bread, the new sandwich includes two fried eggs and two slices each of American cheese, ham and bacon.

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