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Category: Jack in the Box (JACK)
Date: 22 November ber 2020 Stock Price of Jack in the Box: $91.24 We take a look at the 4th quarter 2019 earnings report of Jack in the Box, one of the United States largest hamburger chains with over 2200 restaurants. The group reported revenues of $255.4 million and net income of $37.84 million.
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Darin Harris, chief executive officer, said - Our ongoing strategy of offering guests value combined with indulgent and flavorful products continues to drive overall performance for the brand. I am proud of the way our franchisees, the teams in our restaurants, our employees, and our partners have remained focused amidst this pandemic, and are delivering outstanding results. This momentum has continued into the first quarter of 2021, and I look forward to building on these learnings to enhance long-term performance of the company"
About Jack in the Box (JACK)
Jack in the Box Inc., based in San Diego, California, operates and franchises 2,243 Jack in the Box ® quick-service restaurants (“QSRs”). Jack in the Box opened its first restaurant in 1951 and has since become one of the nation’s largest hamburger chains. Based on number of restaurants, our top 10 major markets comprise approximately 70% of the total system, and Jack in the Box is at least the second largest QSR hamburger chain in eight of those major markets. As of the end of our fiscal year on September 29, 2019, the Jack in the Box system included 2,243 restaurants in 21 states and Guam, of which 137 were company-operated and 2,106 were franchise-operated. Through the execution of our refranchising strategy over the last five years, we have increased franchise ownership of the Jack in the Box system from 81% at the end of fiscal 2014 to 94% at the end of fiscal 2019 as we completed our refranchising program. In fiscal 2019, our franchisees developed 19 new franchise restaurants, and we expect the majority of new unit growth will be through franchise restaurants. Our long-term goals are focused on meeting evolving customer needs, with emphasis on improving operations consistency and targeted investments designed to maximize our returns.
Overview of Jack in the Box's 4th quarter 2020 earnings report
The data refers to the latest quarter unless specified otherwise
- Total revenues: $255.4 million (up from $221.2 million for the same quarter of the previous year)
- Total revenues increased by 15.5% over the last 12 months
- Operating costs and expenses: $189.4 million (up from $172.7 million for the same quarter of the previous year)
- Operating costs and expenses increased by 9.6% over the last 12 months
- Some margin gains for Jack in the Box as revenues growing at faster than operating expenses
- Net earnings: $37.8 million (up from $22.06 million for the same quarter of the previous year)
- Diluted earnings per share: $1.64 (up from $0.86 for the same quarter of the previous year)
- PE ratio of Jack in the Box: 23.6
- Diluted shares in issue: 23.012 million (down from 25.721 million for the same quarter of the previous year)
- Cash and cash equivalents: $199.6 million
- Cash and equivalents per share: $8.67
- Cash and equivalents makes up 9.5% of Jack in the Box's market capital
- Cash and equivalents makes up 10.4% of Jack in the Box's total assets
- Accounts receivable: $78.4 million
- Accounts receivable makes up 4.1% of Jack in the Box's total assets
- Cash generated from operations (for fiscal 2020): $143.5 million
- Cash generated from operations per share (for fiscal 2020): $6.23
Jack in the Box's management commentary on their 4th quarter 2020 earnings
SAN DIEGO--(BUSINESS WIRE)-- Jack in the Box Inc. (NASDAQ: JACK) today reported financial results for the fourth quarter and fiscal year ended September 27, 2020.
Jack in the Box® system same-store sales increased 12.2 percent for the quarter. Company same-store sales increased 9.6 percent in the fourth quarter driven by average check growth of 21.9 percent while transactions decreased 12.3 percent. Improvement in company same-store sales as compared with the third quarter was primarily driven by a sequential improvement in transactions.
Darin Harris, chief executive officer, said, "Our ongoing strategy of offering guests value combined with indulgent and flavorful products continues to drive overall performance for the brand. I am proud of the way our franchisees, the teams in our restaurants, our employees, and our partners have remained focused amidst this pandemic, and are delivering outstanding results. This momentum has continued into the first quarter of 2021, and I look forward to building on these learnings to enhance long-term performance of the company."
Jack in the Box® system same-store sales increased 12.2 percent for the quarter. Company same-store sales increased 9.6 percent in the fourth quarter driven by average check growth of 21.9 percent while transactions decreased 12.3 percent. Improvement in company same-store sales as compared with the third quarter was primarily driven by a sequential improvement in transactions.
Darin Harris, chief executive officer, said, "Our ongoing strategy of offering guests value combined with indulgent and flavorful products continues to drive overall performance for the brand. I am proud of the way our franchisees, the teams in our restaurants, our employees, and our partners have remained focused amidst this pandemic, and are delivering outstanding results. This momentum has continued into the first quarter of 2021, and I look forward to building on these learnings to enhance long-term performance of the company."
Capital Allocation and Liquidity Position
The company did not repurchase any shares in the fourth quarter of fiscal 2020, and as announced on April 15, 2020, temporarily suspended its share repurchase program. On November 13, 2020, the Board of Directors authorized an additional $100 million share repurchase program to more than offset the $22 million authorization that was set to expire at the end of November 2020. This brings the total remaining under share repurchase programs to $200 million, consisting of $100 million which expires in November 2021 and $100 million which expires in November 2022. The company also announced today that on November 13, 2020, its Board of Directors declared a cash dividend of $0.40 per share on the company's common stock. The dividend is payable on December 18, 2020, to shareholders of record at the close of business on December 2, 2020.
As of the end of the fourth quarter, the company had $236.9 million in cash, of which $199.7 million was unrestricted cash.
Guidance
Given the uncertainty associated with the COVID-19 pandemic, the company has not provided any guidance for Fiscal 2021 at this time, but will evaluate on a quarterly basis, with the intent to return to providing guidance once the visibility into sustained trends becomes more clear. Fiscal 2021 ends on October 3, 2021. Fiscal 2020 contained 52 weeks, while Fiscal 2021 contains 53 weeks. Fiscal 2020 contained 16 weeks in the first quarter, and 12 weeks in each of the second, third and fourth quarters. Fiscal 2021 contains 16 weeks in the first quarter, 12 weeks in the second and third quarter, and 13 weeks in the fourth quarter.
The company did not repurchase any shares in the fourth quarter of fiscal 2020, and as announced on April 15, 2020, temporarily suspended its share repurchase program. On November 13, 2020, the Board of Directors authorized an additional $100 million share repurchase program to more than offset the $22 million authorization that was set to expire at the end of November 2020. This brings the total remaining under share repurchase programs to $200 million, consisting of $100 million which expires in November 2021 and $100 million which expires in November 2022. The company also announced today that on November 13, 2020, its Board of Directors declared a cash dividend of $0.40 per share on the company's common stock. The dividend is payable on December 18, 2020, to shareholders of record at the close of business on December 2, 2020.
As of the end of the fourth quarter, the company had $236.9 million in cash, of which $199.7 million was unrestricted cash.
Guidance
Given the uncertainty associated with the COVID-19 pandemic, the company has not provided any guidance for Fiscal 2021 at this time, but will evaluate on a quarterly basis, with the intent to return to providing guidance once the visibility into sustained trends becomes more clear. Fiscal 2021 ends on October 3, 2021. Fiscal 2020 contained 52 weeks, while Fiscal 2021 contains 53 weeks. Fiscal 2020 contained 16 weeks in the first quarter, and 12 weeks in each of the second, third and fourth quarters. Fiscal 2021 contains 16 weeks in the first quarter, 12 weeks in the second and third quarter, and 13 weeks in the fourth quarter.
Jack in the Box (NASDAQ: JACK) stock price history over the last 5 years
The image below, obtained from Google shows the stock price history of Jack in the Box (NASDAQ: JACK) for the last 5 years and it's been an okay time for Jack in the Box stockholders over the last 5 years. 5 years ago the stock was trading at $77.90 and its currently trading at $91.24 That's a very average return of 17.1% provided to Jack in the Box stockholders over the last 5 years.
Jack in the Box (JACK) vs McDonald's (MCD) vs Shake Shack (SHAK) stock over the last 5 years
The image below shows the stock price performance of Jack in the Box (JACK) and Mcdonald's (MCD) over the last 5 years. While they are both active in the quickserve restaurant industry and predominantly sell burgers, their stock price trends and returns are very different. The summary below shows the stock price returns over the last 5 years
- Mcdonalds (MCD): 101.7%
- Jack in the Box (JACK): 9.1%
Recent coverage of Jack in the Box (JACK)
The extract below covers the latest regarding Jack in the Box as obtained from marketwatch.com.
Jack in the Box Inc. JACK, +0.56% shares were up 4% in after-hours trading Wednesday after the fast-food chain reported better-than-expected fiscal fourth-quarter results. Jack in the Box reported net income of $37.8 million, or $1.64 a share, compared with net income of $22.1 million, or 86 cents a share, in the year-ago quarter. The company said same-store sales increased 12% during the quarter, and its board of directors declared a cash dividend of 40 cents a share on its common stock. Revenue jumped 15% to $255.4 million from $221.2 million a year ago. Analysts surveyed by FactSet had expected earnings of $1.14 a share on revenue of $249 million. Jack in the Box shares are up 11% this year. The broader S&P 500 index SPX, -0.67% has improved 10% in 2020
Read the full article here
Jack in the Box Inc. JACK, +0.56% shares were up 4% in after-hours trading Wednesday after the fast-food chain reported better-than-expected fiscal fourth-quarter results. Jack in the Box reported net income of $37.8 million, or $1.64 a share, compared with net income of $22.1 million, or 86 cents a share, in the year-ago quarter. The company said same-store sales increased 12% during the quarter, and its board of directors declared a cash dividend of 40 cents a share on its common stock. Revenue jumped 15% to $255.4 million from $221.2 million a year ago. Analysts surveyed by FactSet had expected earnings of $1.14 a share on revenue of $249 million. Jack in the Box shares are up 11% this year. The broader S&P 500 index SPX, -0.67% has improved 10% in 2020
Read the full article here
Jack in the Box (NASDAQ: Jack) latest stock valuation
So what is Jack in a Box stock worth based on their 4th quarter 2020 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for Jack in the Box at $81.50 a stock.
But based on their earnings and their share buy back programs we believe the stock of Jack in the Box is overvalued
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price, which in this case is $81.50, thus a good entry point into Jack in the Box would be at $73.40 or below.
We expect the stock of Jack in the Box to pull back slightly from current levels in coming weeks and months to levels closer to our target price (full value price). We therefore rate the stock of Jack in the Box as a hold
But based on their earnings and their share buy back programs we believe the stock of Jack in the Box is overvalued
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price, which in this case is $81.50, thus a good entry point into Jack in the Box would be at $73.40 or below.
We expect the stock of Jack in the Box to pull back slightly from current levels in coming weeks and months to levels closer to our target price (full value price). We therefore rate the stock of Jack in the Box as a hold
Next earnings release for Jack in the Box
It is expected that Jack in the Box the will release their 1st quarter 2020 earnings report in late February 2020.