Investing.com -- Shares in Jack In The Box Inc (NASDAQ:JACK) surged 7% in after-hours after reporting stronger than expected same-restaurant sales at Qdoba Mexican Grill over the previous quarter, providing some optimism that the fast-food restaurant chain can overcome a difficult patch for numerous companies in the industry.
During Jack in the Box's third quarter of Fiscal Year 2016, which ended in early-July, the company reported $30.2 million or 0.91 per share, up considerably from net profits of $26.8 million or 0.71 per share from the same quarter in 2015. While comparable restaurant sales at its namesake division fell by 0.2% for the period, the company expected the metric to decline by as much as 2% on the quarter.
At the same time, same-restaurant sales rose at Qdoba jumped by 0.6%, far above low ends of Jack in the Box's guidance. Jack in the Box also saw revenues increase by 2.6% to $368.9 million, topping analysts' estimates of $367 million. Jack in the Box also benefitted from widespread declines in food pricing, which was somewhat offset by rising labor costs.
Notably, the company unveiled a comprehensive plan to lower general and administrative costs earlier this year which includes the consolidation of the Qdoba corporate support center, a host of refranchising initiatives, and significant cost savings across both brands. The restructuring charges resulted in a loss of $7.7 million or 0.15 per share over the quarter.
"Operating earnings per share for the third quarter exceeded our expectations, and resulted primarily from healthy margins combined with proceeds from a legal settlement, mark-to-market adjustments and a lower tax rate," Jack in the Box CEO Lenny Comma said in a statement. "We were particularly pleased that Jack in the Box system same-store sales closed the gap as compared to the industry, with results steadily improving throughout the quarter. We also began implementing our G&A cost reduction plans, and are happy with the progress that has been made thus far."
Moving forward, Jack in the Box anticipates comparable restaurant sales growth of 1-2% for the current quarter, along with 1-2% growth at Qdoba Mexican Grill.
Shares in Jack in the Box gained 6.77 or 7.72% to 94.50 in after-hours trading.