Jack in the Box’s Outlook for 2016 Looks Moderate
Jack in the Box's Lukewarm 4Q15 Earnings
JACK’s 1Q16 performance
Based in San Diego, California, Jack in the Box (JACK) operates the Jack in the Box brand, a fast food restaurant chain, and Qdoba Mexican Eats, a Mexican-style fast casual restaurant chain.
Jack in the Box announced its 1Q16 results on February 17, 2016. JACK posted revenues of $470.8 million, an increase of 0.5% from its 1Q15 revenues. Its EPS (earnings per share) of $0.92 was a 1.1% increase from $0.90 in 1Q15.
Market response
After the announcement of its 1Q16 results, JACK’s share prices fell, as the company failed to meet the analysts’ expectations. The analysts expected JACK’s revenue to be at $475.5 million with an EPS of $1.03. With the negative surprise of 10.7% in its EPS, the company ended February 18, 2016, with its share price at $64.50, a decline of 16.2% from its previous day’s closing price of $76.90.
On the same day, JACK’s peers also fell. McDonald’s (MCD) was down by 1.2%, Wendy’s Company (WEN) was down by 5.2%, and Restaurant Brands International (QSR), which operates Burger King, was down by 3.4%. The comparative benchmark index Consumer Discretionary Select Sector SPDR ETF (XLY), which has invested more than 10% of its portfolio in restaurant stocks, was also down by over 0.6% due to tension in the broader market.
Series overview
In this series, we will discuss Jack in the Box (JACK) 4Q15 performance by comparing it with 4Q14. We will also explore the factors that could drive the company’s revenue in the coming quarters. Finally, we will wind up the series by looking at the company’s valuation multiple and analysts’ estimates and recommendations.
Browse this series on Market Realist: