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JACK Nasdaq· Jack in the Box Inc.
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JACK Nasdaq· Jack in the Box Inc.
Earnings report Q1 2024

JACK Reports Decline in Revenue for Latest Quarter

Segments of revenue

JACK in the Box Inc. reported total revenues of $487.5 million for the sixteen weeks ended January 21, 2024, compared to $527.1 million in the same period last year. The revenue is broken down into different segments as follows:

  • Company restaurant sales: $224.0 million, a decrease from $270.2 million in the previous year.
  • Franchise rental revenues: $113.2 million, an increase from $108.8 million in the previous year.
  • Franchise royalties and other: $73.3 million, a decrease from $76.4 million in the previous year.
  • Franchise contributions for advertising and other services: $76.9 million, an increase from $71.7 million in the previous year.

Strengths

Despite the overall decline in revenue, there were some positive aspects to JACK's performance. The increase in franchise rental revenues and franchise contributions for advertising and other services indicates growth in the franchise segment. Additionally, the company highlighted an increase in average check and the average number of company-operated restaurants, which contributed to the increase in company restaurant sales.

Challenges

The decline in company restaurant sales and franchise royalties is a concern for JACK. The decrease in company restaurant sales can be attributed to a decline in traffic, offsetting the positive impact of an increase in average check. The decrease in franchise royalties may indicate challenges in the franchise segment.

Noteworthy

It is worth mentioning that JACK received a payment of $7.3 million from a franchise operator in October 2022. This payment was made in order to sell the operator's restaurants to a new franchisee at a lower royalty rate. This one-time payment impacted the revenue for the quarter.

Summary

JACK in the Box Inc. experienced a decline in revenue for the latest quarter, primarily driven by a decrease in company restaurant sales and franchise royalties. However, there were some strengths in the form of growth in franchise rental revenues and franchise contributions for advertising and other services. The decline in revenue can be attributed to a decline in traffic and challenges in the franchise segment. The one-time payment received from a franchise operator also impacted the revenue for the quarter.

Source documents

Form 10-Q  filed on Feb 21, 2024
128 pages scanned

Reference data

Company financials Q1 revenue 487M
Analyst estimates Q1 EPS beat by 69.01%
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