Jack in the Box exploring delivery

by Monica Watrous
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 Jack in the Box may offer delivery in the near future.

SAN DIEGO – Jack in the Box Inc. may offer delivery in the near future. Lenny Comma, chairman and CEO, told analysts on a May 12 earnings call that tests are lined up using internal and external resources in the coming year.

Lenny Comma, chairman and CEO of Jack in the Box

“When you look at the list of potentially all things digital and delivery, we understand that in order for us to be competitive going forward we will have to play in that space,” Comma said. “What we have been able to evaluate and get some information on is really this understanding of how much of that business is being led by the aggregators that are out there or the third party folks that do digital for major organizations and how much of that is being done internally. And what we see is there’s going to be a pretty decent contest with the aggregators versus the internal investment.

“Either way what you are going to see is every major brand, including us, will play in that space. Whether we do it all ourselves or partially ourselves we will be involved in everything from delivery to apps and digital applications that allow us to manage everything from CRM (customer relationship management) programs to mobile payment.

“I can’t tell you that we have decided on the path forward as far as how much of that we want to handle internally versus how much of that we want to use the aggregators for… So our plan is to wade into that water pretty deeply and get a good understanding of the path forward and make a firm commitment to that path.”

Many of Jack in the Box’s quick-service restaurant competitors already have dipped a toe in the water; brands including McDonald’s, Taco Bell, Starbucks and Chipotle have been testing the concept in select markets. Burger King has offered delivery for several years. And many more chains have launched mobile order and payment.

“I would say in that next 6 to 12 months we should feel a lot more sure about where we want to place those investments and how we want to move forward,” Comma said. “But I don’t feel like we are behind, and I feel like the information we have and the testing we have done is right on par with where everybody else is from the standpoint of understanding and figuring out how we move forward. I don’t think anybody has got it sorted out, but I do think that everybody is making that commitment right now.”

Net earnings for the second quarter ended April 10 were $28,682,000, or 86 cents per share on the common stock, up 25 percent from $23,005,000, or 62 cents per share, in the comparable quarter. Revenues increased slightly to $361,151,000 from $358,122,000. Same-store sales for the Jack in the Box brand were flat for the quarter. At Qdoba, the company’s Mexican fast-casual brand, same-store sales rose 2.1 percent.

“After a slow start to the second quarter we ended up with a 23 percent increase in operating EPS, which exceeded our expectations and guidance,” Comma said. “The improvement was largely driven by healthy margins and cost controls, along with some benefits from mark-to-market adjustments and a lower tax rate.”

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