American restaurant chain Jack in the Box has reported net earnings of $24.98m for the second quarter (Q2) of the fiscal year 2024 (FY24), down 5.6% from $26.51m in Q2 2023.
The company also reported a 7.7% decline in total revenues, which stood at $365.35m for the quarter ending 14 April 2024, compared to $395.74m in the same quarter of the previous year.
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Restaurant sales contributed $167m to total revenues, marking a 17.5% decrease from $202.6m in Q2 FY23.
Franchise rental revenue for the quarter was $85.83m versus $83.52m a year earlier.
Operating costs and expenses dipped 6.8% to $311.1m from $334.1m in Q2 FY23.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) for the quarter was $75.7m, down 6% from $80.6m a year earlier.
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By GlobalDataIn Q2 FY24, Jack in the Box’s same-store sales decreased by 2.5%, with a 2.6% fall from franchise sales and a 0.6% decline from company-owned sales.
With three new locations opening and none closing, Jack in the Box’s net restaurant count grew during the second quarter.
Between the inception of its development programme in mid-2021 and Q2 FY24, the company has signed 93 agreements for 409 restaurants.
Same-store sales of Del Taco, owned by Jack in the Box, fell 1.4% in the second quarter: a 1.1% decline in franchise sales and a 1.8% dip in company-operated sales.
Del Taco increased its restaurant count during the quarter by opening three new restaurants.
Jack in the Box CEO Darin Harris said: “Top-line performance was impacted by the shift in consumer behaviour and an unexpected delay in our Smashed Jack launch, but sales have improved since its introduction in mid-March.
“We have a clear plan to regain same-store sales traction through a strong marketing calendar, new LTOs [limited time offers] and an expanded value menu throughout the remainder of 2024.
“I remain confident in our long-term strategy to drive sales, margin expansion and new unit and market openings — as do our franchisees, who continue to grow our development pipeline and invest in the expansion of our brands.”
Despite the downturn, Jack in the Box has issued a company-wide guidance for fiscal 2024, projecting an adjusted EBITDA range of $325m to $330m.
The company anticipates operating earnings per share (EPS) to be between $6.25 and $6.40, with depreciation and amortisation expected to be between $60m and $62m.
In terms of sales growth, both the Jack in the Box and Del Taco chains are forecast to experience flat-to-low single-digit increases.
For Jack in the Box, the company-owned restaurant level margin is projected to be between 22% and 23%, while the franchise level margin for Del Taco is expected to be 27% to 29%.
