Jack In The Box Stock Gains Post Q3 Top-Line Beat

Jack In The Box Inc JACK reported third-quarter FY22 sales growth of 47.8% year-on-year to $398.31 million, beating the consensus of $397.71 million.
Jack in the Box Systemwide sales fell 1.4% Y/Y, and System same-store sales decreased 0.6%. Company-operated same-store sales grew 3.5%, while Franchise same-store sales dropped 1%.
Jack in the Box restaurant-level margin was 15.8% versus 25.4% last year, driven by increases in food and packaging costs, wage inflation of 13.2%, and increases in utilities and maintenance and repair costs.
Del Taco same-store sales rose 3.5%. Systemwide sales increased 3.3%, driven by positive franchise and company-operated same-store sales results.
Selling, general and administrative expenses rose 83.9% Y/Y to $40.1 million.
The operating margin was 13%, and operating income for the quarter declined 23% to $51.8 million.
Operating EPS of $1.38 missed the consensus of $1.43. Adjusted EBITDA fell 7.4% Y/Y to $73.2 million.
The company held $92.9 million in cash and equivalents as of July 10, 2022. Cash flow provided by operating activities year-to-date totaled $103.8 million.
On August 5, 2022, the JACK board declared a cash dividend of 0.44 per common share, to be paid on September 9, 2022, to shareholders of record on August 24, 2022.
The company did not repurchase any shares in Q3 but plans to execute $25 million in share repurchases during Q4.
Outlook: Jack In The Box expects an FY22 restaurant-level margin of about 16% (previously ~17%).
Price Action: JACK shares are trading higher by 6.27% at $80.21 on the last check Wednesday.

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