New menu items, lower costs lift Jack in the Box
Jack in the Box Inc., the operator of its namesake restaurants and Qdoba Mexican Grill, said Wednesday that first-quarter earnings jumped 48% as it added menu items and costs fell. Profit beat some analysts’ estimates, sending the shares up 10% to a record.
Net income rose 48% to $37.4 million, or $1.03 a share, from $25.2 million, or 70 cents, a year earlier. Sales rose 5.4% to $856.7 million, the San Diego-based company said. Analysts surveyed by Bloomberg had estimated profit, excluding certain costs or gains, of 78 cents a share on average.
Chief Executive Linda Lang is upgrading restaurants and adding steak sandwiches and mozzarella sticks, helping to boost profit margins to 18.4% from 16.4% a year earlier.
Jack in the Box used a new $625-million credit facility, which includes $150 million in revolving credit and a $475-million term loan, to clear a $268-million term debt and fund a tender offer.
Jack in the Box expects to earn 67 cents to 70 cents a share for the second quarter, which reflects the tender offer. Analysts estimate that it will earn about 66 cents a share, according to Bloomberg data.
The company plans to open more restaurants in existing markets throughout the year.
Shares had their largest percentage gain in a year, jumping 10%, or $6.45, to $71.02.