Jack in the Box reports 6.6% increase in same-store sales thanks to check growth and menu innovation
Article shared courtesy of NRN.com
New CEO Darin Harris discussed how the company quickly pivoted during the coronavirus pandemic to come out on top at a rough time for the industry
Joanna Fantozzi | Aug 06, 2020
Jack in the Box reported a 6.6% increase in same-store sales to round out a strong third quarter ended July 5, 2020, despite the company’s “substantial decline in traffic.” New CEO Darin Harris — who just came on board in June, replacing Leonard Comma, who announced his exit in December — attributed the company’s positive results, even with COVID-19-related traffic struggles, to average check growth of 20% and menu innovation, as well as the company’s ability to pivot quickly during a crisis.
The same-store sales performance — the strongest Jack in the Box has seen in five years — has continued into the company’s fourth quarter.
“We will apply what we’ve learned to future strategies to help preserve this momentum,” Harris said during Thursday’s earnings call. “One of our success drivers is dialing in the right value equation to drive overall sales, including bundles and up-sale strategies, which are appealing to our customers at this time.”
Harris said that in addition to creating meal bundles for families looking for options during the pandemic, they also relied on menu innovation to bolster performance. Newer items like the Tiny Tacos and popcorn chicken were popular over the past few months since they are so portable for grab and go options. Harris hinted that the company had more menu items “coming down the pipeline” to match customer need for variety, though the team would not divulge further information.
He said they also quickly pivoted to match consumer behaviors like customers demanding and noticing speed and service improvements and shifting their breakfast sales to later parts of the day as the daily commute rush largely disappeared while the country was shut down.
His biggest goal for the Jack in the Box brand moving forward, however, is expansion — a strategy that Harris first outlined when he was introduced to Jack in the Box.
“I am working on getting the team, process and tools in place to jumpstart growth but it will take some time,” Harris said, indicating that it takes 18 to 24 months to complete a major expansion plan and that they will be looking at their familiar regional markets, as well as new growth opportunities. “We’re feeling bullish about our current trajectory, especially in light of our current performance and continued momentum.”
Revenues for the third quarter increased to $242.3 million, from $222.4 million in the same period a year ago. Net income increased 60% to $32.6 million, or $1.42 per share, from $13.2 million, or 50 cents per share in the same quarter a year earlier.
Jack in the Box opened one net new store during the quarter and currently operates 2,244 restaurants in 21 states and Guam.Back