JACK - Earnings call transcript Q4 2020

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Operator

Good day, everyone, and welcome to the Jack in the Box, Inc., Fourth Quarter Fiscal 2020 Earnings Conference Call. Today's call is being broadcast live over the Internet. A replay of the call will be available on the Jack in the Box corporate website starting today. [Operator Instructions] At this time, for opening remarks and introductions, I would like to turn the call over to Carol DiRaimo for Jack in the Box. Please go ahead.

Carol DiRaimo

good and Mariama, you, morning, everyone. Thank

Bogue. on Darin Harris; me Treasurer, amounts of Analysis, refer the per earnings this Dawn call Officer, Executive VP Sean and Planning share. Chief to are Financial our Interim share and comments morning, today Hooper; Joining In per Principal diluted Officer, Financial

provided and per EBITDA as reconciliations well We will throughout yesterday's items the adjusted non-GAAP in Please today's call, to restaurant-level share, margin franchise-level release. refer to including margin. refer operating earnings earnings as non-GAAP

in Box and Virtual Morgan A to of in Following we provide participating this XX-Q on Please filed to considered information business. management's potential our Investors documents management reflect our at X. make most on our and environment, risks presentation, other information. this call. current the our will couple Retail and are recent the given will as today's in may of the are Stanley the take www.jackinthebox.com. the nature considered Material our on management around XX-K, yesterday's that based the Form to thinking forward-looking and may based financial with be Jack are course well The of be public December company's risk available operations call expectations differ section any as These items And relating while the XX-K Consumer SEC. of questions from news harbor statements calendar for conference community. note, this rapidly of COVID-XX in on these Global question-and-answer presentation the Conference detailed safe the current documents part during pandemic recent on materially we business, statements from impacts session be a website the expectations today, advised may most statement the uncertainty. Actual the of factors with and changing future, that forward-looking release cautionary elevated results are of statement this company level filed unprecedented in the should on which yesterday

quarter after Wednesday, first ends close. to Sunday, XX, XX, on February announce plan XXXX, and results market Our we on January tentatively

is be turn held at XX. call And scheduled on Pacific that, call will tentatively Thursday, conference Time Our over AM to with Darin. to X:XX I the February

Darin Harris

not first our good morning. to employees, results, needs and responders. of Carol, safety during suppliers I’d guests our keeping take my first, express everyone's these for for the members as their strong you, like provide top our to to and search. only a Thank our to have of and times. provide fourth a flexibility a quarter we like I'd restaurant discuss but At also like excited you, corporate continued of development ingenuity strategy heartfelt be some I’d moment for thank update I'm our strategy, team our as role the quick will leadership to tremendous positions tell and where have key several candidates with can a process great first, I pivotal terms on and in filling. CFO but I on company. am of to CFO, long-term in to onboarding made also talked we progress the partnership, unprecedented to thanks franchisees and priority, This Jack's we're growth and

including and Development franchise Corporate as Tim recent some most He hired sales will As real leader and when sales at Linderman I with directly and exceptional Tim's innovative into franchisees. Senior restaurant Primrose Global approaches strategies have Schools. for existing leading Officer record Jack. also both who Vice at be has Arby's fostering impressive through have and worked as will He that and of Tim him and execution President, in Group. dedicated relationships Huddle to before Development, Franchise and potential Franchise an the initiatives growth of the with House, to extensive Chief franchise and did together experience of and development We report development, I to we his track have prior estate recently background a me. responsible previously accelerating industry, recruited not

excited him existing very pipeline are and with we So him on new to franchisees, grow get board and to future. both units of the bring started our

have that initiated has for last few also position CMO search, been a a We vacant the years.

very the a come leg with brand; fantastic as time, I overall three have like a a in done the uncertain and on through of lawsuit race. two-year have in think SVPs historically pleased digitally-enabled strategy, continued we fourth more with the made brand significant succeed. a to core the with customer our the the the leader relationship experience Association. to evolution marketing passed looking product and our innovation. focus I'm two areas the splitting National for to success this progress long-term and strength the to the resolution report race. putting role job strengthening we to our including at this While unless of we're first in franchisees, the for Jack baton cannot our succeed franchisees of a And that franchisees Franchisee of

so, growth starting into Box the brand. the the the seeing to further us. Now re-energized and with of line bringing forward have in Jack And relationship doing we're we them look transpire this to by

extensively seven CFO excited better Lastly, can far take been how being Today's on quarter be the focus has primarily plan I the will with past has a just is in months first next I'm the formalized. where of which have four’s details my Jack outstanding brand met continued through share handle to I weeks performance, the that quarter. the onboard. on we more is and these a about five strategy of get leadership after first the year Box. over to team

indulgence. and to of higher about consolidation We have the lot of headed where – consumers more this transactions certainly drive gains pandemic, learned a digital, are for desire importance continued check the during the

in and Many through items. consumer Jack on into As the pandemic of early changing for were our leaning these mentioned the fourth pivoted consumer including menu capitalize quarter offering last XX.X%. trends, Same-store increasing held quarter. result media direct trends strong portable changing to fourth indulgent, of sales the placements, and this, delivery quarter, flavorful

quarter. product very company in this more strong check will cash Dawn the Sales remain detail flow the the from in very consumers more amidst Transaction on pleased the robust although and growth transactions, quarter share driven our as a sales differently. with was purchases is by are pandemic. sequential same-store remain drove brands and third This improvement and negative We consolidation X.X%. of strong premium primarily throughout a minute. position improvement are using they

we a were the in of XXXX. fourth over to the As XX quarter, success will take results look key the the at drivers. since some outline I minute for same-store years, sales strongest

Over to the our equation past success XXXX, drive strategies. in years, and bundles, right few $X.XX with add-on value sales. has In the we in an XXXX team dialing in overall been the experienced upsell

price-pointed We to to during customers see continue core this appealing our these time. offers

Strips guests’ of check strips craveable, of check We Spicy Sticks Mozzarella to remained our our to re-launched a benefit from Mini snackable sizes We and menu four, our Since offered highly as Tacos back performance onto Strips drove Munchies and frequently Meeting upsell guests’ bolstered in response featuring bolster strategy, brought were continue item. Tacos transactions mid-January, further enabled August. Consumer Tiny different as in our We popular the for also innovation. thoughtful quarter overall for remains orders. shareable needs as they're strong. add-on. chicken and up in added size Spicy have us to in We with more more. the found permanent sizes their return incremental our we success Chicken the $X quarter. launch promotions Tiny $X two no

to only they promotions consumer leading We are the a ensure improved the related support a while easy Chicken also to strips frying only XX Strips crews delivery. upsell our we can what our available piece and better chicken faster. digitally-enabled enable Operationally, quality trends, reducing for franchisees. of guests Spicy they favorite through for these and spicy want guests their value, time our get strategies the These focused strips, option procedures the at us get to great spicy on profitability offering to execute; not

of fourth quarter. improved perceptions service, customer the speed again to in As

holding faster quick. an speed products, quarter, the rollout to enhancements our restarted it the of also quality experience we the and our restaurants. guests focus of bin service continues is giving This During consistent higher and initiative enable will on that

as Aside shifts our a result we're also in behavior from business of changes amidst continuing COVID. consumer from these strategies, seeing

one XX% least more utilizing providers, were consumers prior sales the of in restaurants as what with First, a our by ever. at covered of approximately of utilizing least reminder major the the pandemic, at to in than major three delivery are mobile over XX% they double app four are app remain our delivery mobile Delivery providers.

systems for third-party for the these continue restaurants. We purveyors our POS to with allowing simpler integrate procedures

Second quarter. fourth while pandemic, night away significant in our late the five and we the from dayparts in all have earlier were breakfast dayparts positive shifts of

dayparts, of late them, breakfast remains significant all traffic and these including negative across across While seen have we both night. rebound

Classic larger for orders sizes Third significant led our items a Sandwich These we've check in sustained now such consumer typically experienced Chicken Consumers items, have our placing and Homestyle continued in increased the behavior as as premium Buttery people. pandemic. more sales on and our shifts Jack. multiple during indulgent are to well, increase

really improve in the fourth sports into presence in all increased this marketing we and of them they spends. converted nimble, team shifts trends are around shifted and to to As our content gaming during to leading has quarter, our consumer our sponsorships digital continue social The consumption extremely formats. remained sales where time. some media our We've video media the meet consumer

restaurants growth. in year. for seven quarter Franchisees the XX opened that's restaurants Lastly, the new new and unit the

look quarter work the and we our closer to of more for to in over about the strategy continued ironing to the Financial franchisees. out a XXXX. this strategy long-term fourth new our Officer look for them turn our and invigorate on sharing Dawn, Principal With us the development forward I'll the now call are We at addition results. prototype, growth

Dawn Hooper

everyone. and Darin the the higher with results was XX% strong Operating EPS roughly year. primarily morning driven by the compared sales coupled restaurant with quarter margins The across for last system you, increase in good level $X.XX quarter. as $X.XX fourth Thank was

transactions. that X.X% The sales Those increased driven sequential Company and The comp Franchise XX.X% system-wide sales. primarily company point improvement locations sales sales in and XX.X% was QX. XX.X% comprised in Our heavily increased upon quarter. had transaction sales are company-owned of the on of and was QX X total locations in drag same same XX.X% fourth system-wide QX the XX.X%. over dependent for between declines of from of a increased increased sales difference increases check comp driven quarter comparable store by a store percentage just few dine-in company by traffic. an overall primarily improvement to franchise

seven costs and restaurant mentioned and to quarter, basis Labor the of XX%, driven expenses. primarily packaging of year. also decelerated the by other quarter sales. was first driven more yesterday's the leverage. average due basis points level XX million quarter Commodity cost XXXX. last costs increasing partially in store to fees by mix for approximately purchases items margin XX.X and lower points, same quarter margin This improved shift inflation X% in strong occupancy release, XX has increased continued the compared XX.X% higher sales in basis to by the basis pressure supplies level check. improved which by which points, performance through XXX the the to basis from franchise wage weeks with maintenance were roughly increase as As repair improved was as a and of fourth XXX fiscal points delivery the related points offset Food our was by first Company prior costs inflation decreased primarily XXX in quarter. continued offset favorable by increased Franchise COVID-XX in year increase when premium from

$XXX,XXX year, have would As year. X.X legal we Without included policies versus for constant policies approximately fees from were in accounting are settlement Advertising refer company increased reduction to but level which standard, as the a was favorable prior fourth related XX.X%, which million remain quarter, X prior in year by in company-owned in new X a level percentage quarter card of the year. costs, a reversal quarter SG&A compared quarter was Mark-to-market of a G&A restaurant the related COLI favorable margin to prior by driven them, prior X.X% the the X.X XX.X%. settlement the changes sales. drove total current adjustments favorable credit the offset partially the XX.X% to percent franchise franchise life of the G&A year in been at franchise revenues, insurance or the largely a with million million in point in in versus increase quarter, a margin lease

we've are sensitive swings As the discussed, policies to market. these in stock

a X.X%. year of percentage system sales in For the G&A as full at came

rate tax in was and fourth number of takes. with effective Our a quarter XX.X% the puts

just will million and roughly position. in million on liquidity cash bolster XXX the to The while duration around the of up continue of uncertainty total and it maintain balance impacts company prudent debt, healthy ended Now XXX magnitude to to under with to well, liquidity has given and take turn believe our the pandemic, caused by the we held the unrestricted. our is fourth actions financial was sheet, the which performance that quarter

quarter. reinstated we As expect do to we did cash do committed shares a any repurchase fourth in any We We third quarter however and reminder, to shareholders. not remain not in this the returning quarter. shares the in dividend repurchase our to

total You XXX will yesterday's can clear in our million, XXX resume as press so release bringing buyback visibility the authorized to we an repurchases. the million becomes additional board that stock program, that see

spent also improvement capital for between full mostly back spending We and and million for spending capital scaled tenant roughly spent essential We allowances year projects. the XX year. on the

to We remodel expect in our resume XXXX. program

defined X.X the agreement of Our leverage at times the in ratio as debt our quarter. was fourth end

respect liquidity. a strong We and with to continue to covenants be debt our in position

of same trends We to X% guidance when into evaluate a due guidance year. sustained providing results the just impact the time basis do to XX Every points of XXXX in And XXXX at sales shy interaction company every with on provide equates results intent in $X to two, in clear. from call Every impacts in over just the to $X COVID-XX, not this EBITDA. week. [Operator store we While economic franchise surrounding million Thank to the impact uncertainty increase in XX more providing roughly restaurant want the a EBITDA. EBITDA, of in million X% basis EBITDA. fiscal fiscal million we as $X.X and visibility lastly, margin return G&A the sales are sensitivities while to roughly points to however to equates will store Brian the Oppenheimer. EBITDA increase for level in concludes $X a you becomes million same Every line our is reminder, over basis first to prepared I'd turn for the our the Our to the remarks. operator Bittner Mariama? much. XXrd Instructions] That now comes with open like questions. question quarterly very in

open. is line Your

Brian Bittner

And results taking so And to the operating for performance, if up quantitatively wondering against or to of impressive which boost business. the your are the better question. understand just we the outlined here. help or prepared sales for would Thanks impact you're your can in strategies performance in just I the industry, be Darin, understand extent qualitatively, us outperforming you on this you self-help remarks it on I'm better and having congratulations the the very maybe your either possible would think try that the same-store terms frame category.

Darin Harris

Well, the seeing and significant we we're to can't competition outperformance. definitely MPD specific improvement numbers, share but compared

Brian Bittner

just aren't with settle the between prepared NFA. you've alignment you share all since And and as give relates your the And I future we're you it on could growth XXXX, franchisees Okay. unit a to some on Investors from seeing enhanced you specific growth? to sentence. hearing reports, talked in role. to in come in again, used general why flavor leadership certainly aren't as clearly in lawsuit you different able same until can into but did growth unit be the remarks, franchisors the in your about views And unit know us Jack the possibly maybe sometime Box the

potential biggest of change So drivers what maybe the on touch can this are. you maybe

Darin Harris

to Great looking question. forward answering I'm this.

about like – of it's It the but potential, some the period a enthused why they've them their been of think franchisees take said, so key the you grow. we've time to find clears I'm hand and pipelines we our of lawsuit In to to two-thirds for want the has path points surveys the so we expressed raised some existing need As for franchise grow, develop, the to desire completed what we recent opportunities right resolved. to about typical that of of saying grow, them.

development at is higher the in Last the XXXX Despite have with in the that supporting stores, Beyond a franchise the and system new last hunt average. in is opened XXXX year not that, previously. of than This focus which and open XX AUVs recruitment position franchisees we new more partners aggressively than for a sites. our XX years. head pandemic, existed on our a

and that's focus. fit experience sites, path, be to focused on on their out drive-through enhanced franchisees able potential consumers kitchens and want as recruiting that many only, to both chains That's different cost So flexible then a closing in will really to of as We've supporting some see be rolled prototype. dark restaurant line, we new non-traditional, in focus such franchisees just our where for new doors. opportunities Jack lower conversion a existing part our our

ways our $XX,XXX grow with we per of we franchise final aggressively Our focus our help but part them to of will have seek lastly, existing is to will then at quarter four yet capital. but have base be don’t And profitability already out rapidly. capital profitability existing franchise to QX stores, capital more our them Many providers, secure partner store. average from franchise the system, numbers up

plenty on put can our in think markets existing if in existing of around some you country it. we reasons. If opportunity we we markets, to the of our just another have just XXX just existing the X,XXX locations focus footprint. about our are those So then And

I'm lot just encouraged. would a So is upside, And I focus. of point last make extremely the

Box Jack change do years, know, the many And grow we all focus support growing as in our for and they about will be footprint. expand Qdoba. Qdoba, you franchisees how As in this focused focused on on growing to and Jack our

Brian Bittner

That's Thank Darin. great you, color.

Operator

question with Chris Stifel. comes next from Your O'Cull

is line open. Your

Chris O'Cull

the great I'm on but morning, product and have promotions. a nice Jack a has on streak new change. with been clearly strong you congratulations outlined introductions reasons and to a seems heard good fundamental been there more I for the comps, And Thanks, Darin, wondering if quarter.

the For and or changes product any development helped team to that example, made the company processes planning? has has the support promotional

Darin Harris

I we think into that is our strategy brand our focus and can the communicate around and biggest menu alignment around how that our execution. change our operational strategy rolls

you when and the So drive operational combination hand-in-hand, value add-ons, and have innovation results. the better working upsells focus, you all with in of execution,

And is thing, the beyond that's so And think since that, of is spent clarity differently I I've joined, intensely to we a we've what brand our our biggest then done on guests. focused time, just lot around strategy. listening

they We to ways I Jack have Box. the And will in our the value come a clarity, related innovation, understanding with find to communicate to about this effectively we to continue mentioned. why better our variety,

team from same get the guests sure at taste time, they're and well-trained members. received ordered they they quickly While friendly that great making and the products

working are part I in So those all driving of what's think outcome. this conjunction things

Chris O'Cull

for developed? have those know franchisees? rooms. any you have expect you're That's what's And size hearing opportunities that locations, on to of one, quarter you you great. when smaller footprint different from you then dining do just you're the in developing maybe can that made I and the about feedback Do And mentioned, box updates but one the you prototypes evaluating comment fit see of one the footprint? last other what the

Darin Harris

XX% one prototype, prototype. We interest are prototype. we're we in the this seeing Tulsa of Franchisees this franchisees. went in already And did lot expressing smaller We've a Yes. reduced out approved costs. of seen from in anywhere to develop site our XX% a new, to and and

we economic and our focus the definitely enhancing will So aggressively model enhancing on model.

Chris O'Cull

guys. Thanks, Great.

Darin Harris

for to approved as we also lead learn can the to site and have prototype well. we then company California the that experience give lastly, them from our way chance so franchisees our a develop in And

Carol DiRaimo

question? Next

Operator

Your next UBS. question with Geiger comes from Dennis

open. is line Your

Dennis Geiger

Great. stickiness for thoughts the ask Thank it new is if have much And into that going sense is customers. And thinking you. a menu Darin, customers, of about sense that. affordability existing convenience? if customers some about discovered bit frequency around the have I’d actions next more you're how where new any How credibility, increased a year? rediscovered versus greater maybe you curious Just the for quarter. or from customers improvement that of in the the on it

Sean Bogue

chime Darin let Sean. in a Hey, bit in Dennis, is before weigh little this as I'll well. I

through the we're income a of in the customer profile Some things with in particular is changing pandemic that some seen higher we've gains customers. that seeing

to of attract around Our through moving more are we're the customer [indiscernible] I'd with about in product say in the $XXX,XXX. We've mentioned prepared customer, But two behavior. and them these managed really things the we've other changes remarks. where like

with significantly. have appeal we've efficient compelling intersecting delivery these then only off-premise we're is increased And thresholds. mobile, customers leading not but and well our lastly, of value expansion always offering, is safe other well-executed a income where we'll the items options drive-throughs, like and add-on of higher with premium While as which our the definitely and

at point these that us some as positioned customers dine-in. change retain all confidence more continue to they behavior, So well in this we're that as through as return attracting will us to gives that's well some

Dennis Geiger

to curfews implemented rooms wondering spikes, just well seemingly been areas could dining you different then harder those or recently country, I'm as all positioned relates if how that's performing. And – thoughts that. given are where much you or hit have are not of sure have just have any Thanks. spikes that Great. areas manage by closed on case employed it that exposure areas in through regional in at areas and late-night the certain have case if wondering share how performance, to or most that to you're COVID

Just if thank there's there, any you. insights

Darin Harris

to to all keeping customers that, control what with And strong employees on even we macro It's and great what Sure. focus can that's that's continue geographies we changes, safe. see across our and question. we factor we're seeing continue safety, the a really performance is and

in said, the to example, are they're like providing employees experience, a And dining value, providing to well-trained during I make from that continue success, concerned pandemic. are drivers sure innovation, safe around the open then, they a can We guests. best hurry want are who execution what experience we're we make key improve not our to and execution those going this rooms. to they're we've For and to our – we're guests that we're and our all sure to lot done our of a service standpoint the

additionally train mentioned the example, so some product a an members and be procedures to in platform quality even re-engaged that better as So, this provide improve opening we of our more that And out just help bins our think I during team focused around we guests. holding training out timeframe. we even new have remarks. rolled that to We safety will supportive my then new the rolling product, the new also cooking that

So are things enhance all restaurant. of our within working to the three execution these

Dennis Geiger

Great. and congratulations. Thanks

Operator

Glass from comes Stanley. Morgan question next Your with John

Your line open. is

John Glass

Can last two morning. that quarters. experienced little more, try you've in Good check Thanks. maybe first you unpack to increase the a the just

core way to are what sandwich count benefits sort those sales add-on If you from getting any maybe about like of of business? versus providing, on the in counter versus what of dimensionalize add-ons it, sort think you're terms trade incremental

Darin Harris

a anything from Sean order the order, from to and I’ll of upsells. over per moved over big same-store items X.X. Items X.X I'll And first you both Dawn to Dawn, I'll add-ons And part it we're that. it turn of Dawn, portion to turn – increase answer per did seeing or that to coming have it seeing I Sure. we're then apologize. really add? sales

Dawn Hooper

just we've that into product a we're in currently $X.XX to ago. check, year look core I a Yes. premium add seen QX, prepared at compares noted would And mix as his entree you in overall our about shift Darin if that $XX.XX and products. tracking more remarks,

John Glass

your you And growth on franchisee a Darin, Or you really maybe about want remodel detail. emphasis then Have the assets? think and helpful the for to both on on that great. new franchisees, drive-throughs remind And prior the That's forward? journey total maybe example. re-thought this modeling joining buy company. just us That's an you remodels, you're were is think was I into going remodel the to the a there package think in where negotiating how that? of the there a also image Is basis the you about something of just the

Darin Harris

their and At would say trying are point, franchisees about providing now without as some insight what give this much Yes. right color, lower starting refresh excited re-investing point. to too but I is you providing a in restaurants we're a cost

the is that out around into future addressing designs in And new of needs. speak we're And the to the that addition innovating this the part New system. that going guests’ to we'll so – our midst of into the rolling next our Year, throughout in strategy forward, and of talk about more

John Glass

Okay. Thank you very much.

Operator

with comes question Gregory Francfort America. from next Bank Your of

Your line open. is

Gregory Francfort

decision? couple system the of question the is We've G&A that lower quarter than if be last And long-term into maybe two it's Can higher or G&A, that and the you've larger or I Thanks. is is plan G&A couple for you X.X%? around recent a still and X.X% will the thanks around think about as a question. the drivers to the and think to going target target percentage sales. of a of run below the digital. talk substantially of My Hey, quarters had what players be X.X%, where X.X% really most or lean you seen you've technology

Dawn Hooper

a look we're give guidance you for prepared XXXX suggest that one. not at this Yes, to At I I'll or would basis. take full-year time, that it long-term. on

said were during lastly, to So, discrete the no X.X% on just want full-year, has coming things have we like sales. low pandemic, to QX is where X.X% of travel G&A historically And we a been items. at have we was But we there a few system-wide be. lower. seen however, significant cuts,

Gregory Francfort

to not plan food you a technology I of Thanks. outsource? Maybe And just or mean, have little whether on a bowls any that. follow-up can it. changing pandemic the plans? about those talk for the Got insource versus bit

Darin Harris

Yes.

to continue intent is roadmap. Our utilizing clear technology a

to moved things have cloud. We some the

of to some we we And so shifts our more address out we're and some fast through through But items. to a to versus redesigning recrafting during made efficiently. roadmap those be going storage. our technology speed the restaurant, following industry restaurant the run our help some of up want operators with technology and now far data as right the pandemic to in level restaurants as effectively restaurant at and Clearly,

Gregory Francfort

Thanks, Darin.

Operator

Bernstein next comes Your Barclays. question with from Jeffrey

open. is line Your

Jeffrey Bernstein

Great. very much. Thank you questions. Two

Maybe share perhaps re-energized. has that they're that the have the franchisee been or up First, is could even and relations how perhaps franchisees. performance if you of I the greatest you now can wondering Darin, you share those its enhance that maybe the more And in discussions corporate growth now encouraging. It critical is re-acceleration and sounds gives the then of you what these long-term unit the mending that just with early those you've had easing follow-up. just like a any on little roadblock learnings like was frustration confidence relations. bit sounds following to in franchise reinvestment. it the maybe terms I'm mentioned one

Darin Harris

were how some number franchise to conducted recently learn taking these a of that minds at. what's what it's is question. I've things. and around learned our a those. survey about important these their that we franchisees about that discussion listen concerns process of long-term a for And we're we have by been Yes, and sheer strategy address and account And talked address we what the how we'll our franchisees and effective the just encouraged the what with that really in engaged We great we've of conversations into just and on it, lot through in

excited frankly, around a so that of And what our quite organization I'm out and learned, serve can customer we the the focus franchisees well. treating as

the out here's making earlier an beginning piece partners developing go we're the and we as our our till into strategies the communicate you bring franchises and mentioned, that reason new – bring and into leadership sure franchisees of in saying outside the biggest forming to along it, our our promotions. that end partner I strategy when formed rolling So programs And I as a organization, our process advisory execute. that process we're any biggest in can the change want do so council as waiting we rollout, and is of versus from or like that's

Jeffrey Bernstein

it. more a smaller, of in as national Got currently And a burger regional you then just a follow-up of very question much player presumably theoretical think yourself, segment. as

defense about about promotion you wondering marketing you and that versus how you're playing Just think doing. offense the when talk

adjust the been in your marketing example, and play if to have nimble past one your that breakfast you're response? is making feel you your if respond you marketing clear and based play your you what For them be makes some game ability like of push of promotional so as to inclined. you of game established and a big chicken. do in I Or It then in Do larger on your in players your competitive and doesn't role with landscape? do What have national challenge steer spend plan? that's terms value of plan, same as your peers have of a like to regional adjustments a guess think or just maybe kind the seems or you seeing are the you

you Just wondering think how about broadly. that

Darin Harris

really it rapidly. address we challenger more nimble a being enjoyed face a great being us marketplace enables because question. position I think of brand and address, I that in more in be and issues to Yes, the

us – We promoted you of the to to seen marketed to switching our quickly us, what and the way more and helped you’ve just so we during the consumers, And pivoting seen pandemic able the and digital and by digital. just consumers to and hearts being minds able of capture and and win many were entertainment around being to focus sponsorship quickly. sports gaming pivot

premium, So around to or pipeline consumers. and promotions, snackable of innovation, add-ons And that's items, a just years, lot of it the out of in around flexibility one gives strong that types by our of value around out area. having that's mind built different us over value, create such two in then a go of

the that, what introduction soon, major game. chicken of one we coming of I peak have would the under new a give and I'm just encouraged into product by that beyond And things get line to we're you say, a tent to so kind is is is, going really

happens the who working to program by a And what in thickness here dance. so well my few chance been a a the and weeks, hope we're on quality, improved knows, eager And team chicken new a as and has see new flavor. focused with doing chicken on get we'll is celebrate to that

Jeffrey Bernstein

you. Thank I to Darin. look forward that,

Operator

comes Jefferies. Alex Your with from Slagle next question

open. is line Your

Alex Slagle

things mean, like you performance a the an of running if Thanks. As making imagine, you've through did forward? restaurants out enhancements operationally. still could And provide are huge the then address in more on waiting progress I that what Good the pull or related I the color rest the receive and to update the are the there it the process system. any are challenging wondered that and you'd volumes morning. to I to drive-thru rolling those the now seen probably on bit equipment adjustments drive-thru you're

Darin Harris

a Yes, question. that's great

bins, – increase that through called type such new new Also we on to rolled order it focused focus Speed time we really responded has been like the cooking mentioned, chicken challenges, new focus our I different X.X tools the has in creates and procedures around XXX. the and as things but as giving what reduces just training. restaurants, our some definitely X.X, well. on training demand think platform and on And half. of to holding With the team whole moving a behaviors the average in We out drive-thru from just on

more we improve experience and focus be the So giving do on techniques the at how to drive-thru tools them consistent. really and the

focus at than being consistent Our is on quick. speed just more

in is what last improved being around quarters. has of of And so perception our we've two service said that seen The with guests speed already the quarter-over-quarter.

Alex Slagle

Got quarter incremental any we it. headwinds leverage potential and margin and think did in And wage margin reopening then how should from inflation how labor, benefit just the really the closed the rooms dining and much impressive about the follow-up a X% on given that?

Darin Harris

So, Sean, would you address that please?

Sean Bogue

some Yes, generated on of drive-thru by really the to we've being biggest efficiency labor but of able business, just general we're labor there more sales, volumes, higher can efficiency in they stores out hour obviously there's more the in in piece crew. per say the seen is efficiency the just and the at to be definitely the I'd are the higher when transactions of focus had running those, portion get

Alex Slagle

great. you. Thank That's

Operator

Your Jeff Gordon next question with Farmer Haskett. from comes

Your line open. is

Jeff Farmer

you. Thank

Just having quick a follow-up. couple of

at in state if indoor that Jack So shutdown guess check when Box? or what you home differently California I is Jack the does relationship any dining your a benefit is transaction trends and between there in dining So restrictions the largely California? of see said indoor increased in

Carol DiRaimo

one will I Yes, Jeff. that take

when seen say round latest any we've or into this just not a general, that would And restrictions options Box Jack the less weekend. that have So really I QSR effect the the of players. negative in on front, that's of consumers came in for

Jeff Farmer

Okay. And then one more follow-up.

As gets do check transaction road, is expect transaction both trends and meaning you see opportunity potentially an benefit further growth? check Jack from growth Jack come a average to with that improving average down will simultaneously the growth or there lower

Carol DiRaimo

as see Yes, we using forward, we how just resumed I the right. to brands go think have consumer

increased of incidence have premium by from As X.X menu. have seen XX%, per the higher on And that mentioned you've to in our when go ticket right, roughly then a X.X we times. Darin you the items items

clearly brands consumers are income as differently consumer. we So higher Darin the are mentioned, using attracting a

back trends environment”. “A how sustain early of many normalized kind of too as it's say, more to those we to So get

Darin Harris

is ways finding in transaction Yes. say what communicate our the again, continue their segments to right count that as different Carol's may distinct saying, able we would be I a for in research lot to we around of moving and guests addition needs do that direction. and in some And listen to with that, what to to keep

Jeff Farmer

you. Thank right. All

Operator

And question with Credit from your Silberman Lauren comes Suisse. next

open. Your line is

Lauren Silberman

question. Thanks the for

So across of holistic digital beyond greater facing the are notion strategies digital extensions focus consumer the ecosystem space of channels. a and a seeing we around just

know I technology you do but Darin Could level the to need So, roadmap, talked appropriate you around is Jack's efforts spending And digital there infrastructure? build for the of would how capital you about more? current believe evaluate that Jack technology? reassessing be

Darin Harris

job their nice orders digital guest is a way boards done to I has the of do equal all Jack industry think I and us Yes, digital. enter for do experience our think We great overall – means of communicating them a understanding from time think menu like being you're a And into support communicating seeing other and the lot, POS we're innovate the through systems from via just to a effectively of I We've integrated from But question. the to providers. to channels. there social digital experience. they four overall continue to parking and standpoint

going an to on investment the digital technology So loyalty necessary be space. there's from a think technology I opportunity as Things do into standpoint a an for as example, some us. like

continuing app to Our it's where agile. it mobile evolve to

Lauren Silberman

Thank you. Great.

Operator

question Your from Wells comes next Jon Fargo. Tower with

open. is line Your

Jon Tower

Great. Thanks.

while, XXXX to you're I company would and openings fiscal on fiscal for following growth maybe from level gross prevent unique stuff that impact around little in anything perhaps there the your the a is about Darin, Just a seeing openings likely up of unit unit similar XXXX? felt growth. be some in relatively know will fiscal earlier new but XXXX, you gross

Darin Harris

is also restaurants XXXX. heavily in related even what say any give year I managed COVID, delayed these and that, by to to But year. into had impacted XX can't I we open guidance will No, we this a restaurants

I level of up think future. a it at So kind of think standpoint development is in the point of – that's the to while focused this from sustaining growth where we we're of a ramp

Jon Tower

I advantage you the too Thank And A this little ABS on sheet. Great. the your up the in lower balance competitors up space you today? get at the rates. have rates even the lower of in structure, in obviously I few looking a so had that the moment many the taken market, could would but some years at down know appears that set bit you you. like seat that then know something does line? of CFO stand that, be following And where service formal not potentially don't it quick a just ago,

Darin Harris

Sean…

Sean Bogue

I entered structure to add. going color we I and to to line, feel, would mean securitization the use there's add more we've away least us we far for many into the cost continue structure Jon, Hi Sean, that that is on is feel forward. just that still this

time, our our as adding with think probably continue additional continuing grow So you'd structure us debt I that over to we capacity. see use leverage as explore we evaluate EBITDA to

Jon Tower

Okay.

refinancing? on nothing but So

Sean Bogue

Not in the short-term.

Jon Tower

And any market lastly wouldn't the in now shares. why be you Okay. then just reason repurchasing

Darin Harris

for think share noticed, we're you've an additional $XXX million focused we remain on I for repurchase, point this as repurchasing. the just to is future, cautious share what but approved at around additional

Jon Tower

Yes. be I but of understood. preventing would there stock didn't know if taking first the that fiscal there price was now, you. Appreciate Thank time. the getting advantage anything you from out the and in quarter

Operator

from Charles comes Cowen next question with Your & Company. Andrew

open. Your line is

Andrew Charles

or asked, to you. helpful? new roll I markets scale product of are pilots be attracting, to be two you the Most are this would in to a that Thank my to these would lot love of see I using learnings and are Great. you'll as want in sandwich questions looking have what going but you around publicity. the the month, last customers, system, entire been recognize recent testing the you just guys if as to the to guess you're out Unchicken understand generating who but well judge insights it's something any brand you

Darin Harris

on us what Yes, to will think I how innovation that always the is push envelope the relate us. is key to for and continuing

have we an that focus, products sandwich perform, criteria or whether Unchicken it's new a how we our So burger. evaluate

is sales sold, and we'll level objective and it to those And restaurant so lines, evaluate our multiple increase at so the units to two. count including

strategy not does point how in ready on make we've this is positive, our from decision so menu change our response point time. at And we're to guests overall a a but seen overall, at that that

Andrew Charles

similar doubtful those are that's passed reclaiming allowance then Got quarter. of receivables, to it. getting trade for of in when into to? the receivables it Is that about accounts there And last what structural calculating was anything X% way

Carol DiRaimo

definitely and was in tell can that QX of we've the franchise increased deterioration been since of since the year. that profitability I matters Well, half real our the bad this of but XXXX seen no you to couple has of are elevated as debt in specific QX due resolved, pandemic year franchise definitely back

Andrew Charles

you. Thank Great.

Operator

question next comes Truist Securities. Your Jake Bartlett from with

line Your is open.

Jake Bartlett

you The about of this to is quarter. into from momentum Mine was quarter, quarter, us now, Can the again the helped in better saw third seems momentum the quarter, that? throughout we of the month help the in should results the back like or same it from you half that question. sales the last taking the end that you clarifying the the momentum. for fourth is interpret accelerated Thanks store continuing momentum Great. quarter quarter reference towards by how continuing

Darin Harris

seven digits. we're run the first in to continuing In low-double the weeks

Jake Bartlett

then should that strong, forward, of Was should acceleration happened on pull And level but quick years it and color think new we around a a Okay. in clarification going forward? but closures units then continuing development forward closures, expect any there upcoming going or the of maybe great being to see that? we what that more be there seemed very of was kind and an that to of also is closures was might've

Darin Harris

a for to we're we're to Yes, portfolio our us, growth, evaluate to right. I sure think enhance position in going make

sales transfer So there's those and of to us in areas our different to unit. opportunity take guests a loyal some for some

should we're locations so overall pandemic, through to our evaluating that closed have going even us enabled a it probably today And process And close this of some ago. that portfolio. with while

Jake Bartlett

the item are you're more as just should sandwich kind expect more innovation gravitating noting come XXXX, then promotional more a question, that for of items the $XXX working premium it out towards instance, that on think in standalone seems Okay. that crisis of combo? the last you premium of approach kind here, premium like higher-end the And your that on, during we kind would side or would chicken customers

Darin Harris

we aggressively I as going that's would around core amplify continue also menu. part around to core innovate is we're we well. focus And also innovate going address as to sure snack our would premium, what I Yes, and that of means items say value We're really – it a innovation. our menu make to or and on

on to experience, overall guest we just menu want the start product. beyond that, across and So framing not the the our innovation

experiences, innovate brand support to beyond the better think lot a one support a there's just there's person we for of how help. we're some product. resources around we additional it's know about of whether we this in asks a to a clear digital of And giving us innovation packaging areas them lot environment, in said, So as some we opportunity to their opportunity, around really pipeline. But brief question do brought and our that want

guests, – with back We've third-party to we And ideas more help generate our additional vendors resources in pipeline. more utilizing to want partnering drive overall it we model. key our for to want some product which started the So more brought even best-in-class are want We where it'll don't ideas. their on using to to across restaurants and We even do bringing segment daypart. very or them different areas limit premium. our by aggressively innovate back to providers again to in core with to just to, also it our coming

Jake Bartlett

Thank you very much. Great.

Operator

comes next from Derrington Telsey Group. with question Your Robert Advisory

open. is line Your

Robert Derrington

system for question. Darin. curious within restaurants, you. visiting franchise. I'm both time the had and the you've Yes. the Thank company Thanks to spend some some of now

which to, restaurants? is within company's system, a at at your the referring extensive look that restarting remodel fairly the for the Or improve level some trying of program. what prepared refresh trying two, you it low visibility higher-priced that of and is rolls earlier, You as in roughly more just been the remodels, out something to basically a timing helping you're mentioned cost and understand that level the I'm of extensive some has plan of lower and refresh your the that look substantial remarks, a is to? at I'm past, how one, remodel your –

Darin Harris

process it through way focused especially traffic been Great piece level lower the around Yes. the is exterior, about since mostly still is but drive-thru. all a increase strategy, I question. most that's the of reimage in details recently We're refresh, the enhanced in we've the finalizing think on the

type three However, type are that of of behaviors on traffic, investment, restaurant. reimage depending what teams said is, three the at our strategy, the of which the with it tiered is that on site, would I levels being different working call

do which we a complete to costly go exterior spruce and the about some reimage the and up just need more and of interior. the some some is the reimage So to a building talking I'm needs of refresh.

Robert Derrington

you, Thank Super. Okay.

Carol DiRaimo

for we question. think one time more I have Operator,

Operator

Thank Okay. you.

James comes from Your Northcoast final Sanderson question Research. with

open. Your line is

James Sanderson

Hey, you for thank question. the

delivery wanted mix average little changed this sense a if Just delivery I through how directly allow how other follow-up platform. strategy. influences if Thank or check? of to you of you're in more considering bit any describe white and provide transactions Jack pandemic a solution app Wonder type could of to has you. on that Box the the some then the the a what since the digital And would as consumer mobile label would order

Dawn Hooper

double Do to I'll have we've there? what and sales then take add our that to in pre-pandemic, it the digital hand over Overall the first were part they're of Darin. digit seen anything from you they mid-single range.

Darin Harris

that that on view now pipeline. to is Yes, innovation our so use the an white as far label, as as right

So innovative new more tested at what us we to restaurants, have across we out it's something as in it for to test and brand. great six would a the that point But about not a a get this We're seeing way virtual receptivity. call system. products roll plan

where that's so is products. with label And our white focus virtual the

James Sanderson

Is And is follow-up mix, way at that? to mid combined. that right the the and both that orders quick look digit just a mobile single delivery

Dawn Hooper

That is correct.

James Sanderson

of Can the what component you – third-party any sense is?

Dawn Hooper

about It's X%.

James Sanderson

Thank much. – very right. good. Very the you So, All majority okay.

Operator

call I for to will back closing the over turn Carol now remarks.

Carol DiRaimo

Have safe and us Thank you today. everyone joining very a for happy Thanksgiving,

Operator

call. Thank today's participating. Ladies concludes and gentlemen, for conference you this

now may You disconnect.

Jack in the Box (JACK) 19 Nov 202020 Q4 Earnings call transcript