Jack In The Box (JACK) Stock Pops After Q2 Earnings, Will Reconsider Qdoba

Jack in the Box Inc. (JACK – Free Report) just released its second-quarter 2017 financial results, posting earnings of $0.98 per share and revenues of $369 million.

Currently, JACK is a Zacks Rank #3 (Hold), but this ranking could change based on today’s results. The stock is up 10.81% to $112.97 per share in after-hours trading shortly after its earnings report was released.

JACK:

Beat earnings estimates. The company posted earnings of $0.98 per share (excluding $0.09 from non-recurring items), beating the Zacks Consensus Estimate of $0.90 per share.

Beat revenue estimates. The company saw revenue figures of $369.4 million, just edging out our consensus estimate of $368.8 million.

JACK reported fiscal second quarter earnings of $33.1 million. The company also repurchased roughly 2.23 million shares of common stock.

Before Tuesday, shares of the fast-food chain had dropped almost 9% since the start of the year. However, in the last 12 months its stock rose 34%.

For the third quarter, JACK expects same-store sales to move up or down 1%. JACK projects a full-year same-store sales increase of approximately 1%. The company expects full-year earnings in the range of $4.10 to $4.30 per share.

“At our investor meeting last May, we said one of the factors that would cause us to reconsider our strategy with respect to Qdoba was valuation,” JACK chairman and CEO Lenny Comma said in a statement. “It has become more apparent since then that the overall valuation of the company is being impacted by having two different business models. As a result, we’ve retained Morgan Stanley & Co. LLC to assist the Board in its evaluation of potential alternatives with respect to Qdoba, as well as other ways to enhance shareholder value.

“Lastly, we continue to make good progress on our Jack in the Box refranchising initiative, with the sale of 60 restaurants in the second quarter. In addition, as of today, we have signed non-binding letters of intent with franchisees to sell approximately 70 additional restaurants.”