Jack In The Box Inc (NASDAQ:JACK)
Jack in the Box reported their 2nd quarter earnings after the closing bell on Tuesday May 16, 2017. Immediately after the numbers were made public, shares exploded higher- hitting a high of $115.00 in the after hours session- before trading sideways and closing at $113.30.
Shares have traded in a 52 week range from $72.39-$112.83 ; so clearly when shares open up for Wednesday morning trading they will be at new 52 week highs and well over a major resistance line which we illustrate in the daily price chart below.
The Numbers
Jack posted earnings of $0.98 per share, which beat the Zacks Consensus Estimate of $0.90 per share. Revenues were $369 million which beat the consensus of $368 million. The company will keep the 1.60 % dividend and they announced that they bought back 2.23 million shares.
The Charts
The above 15 minute price chart clearly shows the big green up candle at the time of the earnings release. Shares traded fairly flat most of the day and again after that initial 15 minute igniting candle stick.
The above Daily price chart shows how Jack has traded since January 2017. Note the two red resistance lines and the one green support line. The lower or near-term red resistance line appears will be penetrated to the upside when trading opens in the morning session on Wednesday.
Company Comments
Chairman and CEO Lenny Comma had this to say in a prepared statement:
“At our investor meeting last May, we said one of the factors that would cause us to reconsider our strategy with respect to Qdoba was valuation,” It has become more apparent since then that the overall valuation of the company is being impacted by having two different business models. As a result, we’ve retained Morgan Stanley & Co (NYSE:MS). LLC to assist the Board in its evaluation of potential alternatives with respect to Qdoba, as well as other ways to enhance shareholder value.
“After a sluggish start to the quarter, which we believe was attributable to delayed tax refunds and record rainfall in California, Jack in the Box system same-store sales improved to positive territory as these transitory issues passed and we pivoted our advertising towards value messages,” .”However, same-store sales at Qdoba company restaurants worsened in the latter two months of the quarter, as we lapped more aggressive discounting in last year’s second quarter.”
“Lastly, we continue to make good progress on our Jack in the Box refranchising initiative, with the sale of 60 restaurants in the second quarter. In addition, as of today, we have signed non-binding letters of intent with franchisees to sell approximately 70 additional restaurants.”
Company Profile
Jack in the Box Inc. operates and franchises Jack in the Box quick-service restaurants (QSRs) and Qdoba Mexican Eats (Qdoba) fast-casual restaurants. The Company operates in two segments: Jack in the Box and Qdoba restaurant operations. Qdoba is a fast-casual Mexican food brand in the United States, offering food items including burritos, tacos, salads, and quesadillas. Jack in the Box is a hamburger chain, which offers a selection of products, including classic burgers such as, Jumbo Jack burgers, and new product lines, such as Buttery Jack burgers, and its Brunchfast menu. As of October 2, 2016, the Company operated 2,954 Jack in the Box QSRs and Qdoba fast-casual restaurants. As of October 2, 2016, Jack in the Box system included 2,255restaurants, of which 417 were company-operated and 1,838 were franchise operated. As of October 2, 2016, the Qdoba system included 699 restaurants, of which 367 were company operated and 332 were franchise operated.-