JACK - Jack in the Box rallies after same-store sales sizzle in FQ1

Jack in the Box ( NASDAQ: JACK ) reported same-store sales were up 7.8% in FQ1 with franchise same-store sales of 7.4% and company-operated same-store sales of 12.6%. Company-operated restaurants experienced growth in both average check and traffic during the quarter, while franchise restaurants had growth in average check, partially offset by a decline in traffic. Del Taco same-store sales increased 3.0% in the quarter, comprised of franchise same-store sales growth of 2.8% and company-operated same-store sales growth of 3.1%.

Restaurant-level margin was up 150 basis points to 19.8% of sales, driven by strong sales leverage and change in mix of restaurants. Franchise-level margin was up 280 basis points to 44.4 of sales, driven by higher sales and rent contribution, additional revenue from the Hawaii transaction, and lower costs toward bad debt expense.

The restaurant operator's net restaurant count was positive in the quarter, with six franchise openings and one company-owned closure. JACK ended the quarter with 2,046 franchised locations and 140 company-owned locations.

CEO outlook: "Traffic improvement and robust comps, combined with anticipated positive net unit growth, position us to drive meaningful systemwide sales growth in 2023, and improve franchise profitability in an operating environment that remains challenging."

Shares of Jack in the Box ( JACK ) broke 5.57% higher in premarket action to $82.77 vs. the 52-week trading range of $54.80 to $94.68.

Read why Seeking Alpha contributor Geoffrey Seiler is cautious on JACK.

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