JACK - Earnings call transcript Q2 2024

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Operator

At this time I would like to welcome everyone to the Jack in the Box second quarter 2024 earnings webcast. [Operator Instructions] I would now like to turn the call over to Chris Brandon, Vice President of Investor Relations. Chris, please go ahead.

Chris Brandon

Thanks, operator and good afternoon, everyone. We appreciate you joining today's conference. our XXXX. from results highlighting second quarter Call our With and items. Scott.Following our our both Chief our questions their that Q&A analysts, Darin to Harris, Executive Officer certain from take Chief to may remarks, discussion be me sell during we'll side know today prepared happy covering we Financial refer and Officer Brian GAAP non will Relations which non be jackinthebox.com.We Please provided release, management's reflect on reconciliations future. looking the forward and based also the earnings GAAP current is refer website our statements Investor to the in available outlook information for at that making on judgments

with I Officer, our over to at held the turn June On York be actual most will documents in However, the conference and X, and as City. Baird cautionary would June well weeks. XX-Q our virtually. look on like On Conference our most company plans the in XX-K, Boston. differ And like consider seeing Tuesday, website.And New Darin will the Cowen to forward lastly, upcoming you we and New that, XX, safe RBC factors expectations attending events.And both these operations to to on -- Thursday, harbor Oppenheimer next attending be discussion.Material be the June recent for be statement SEC. participate you conferences X, conference risk Executive attending XX-K statements City. event recent the I'd update public because in to will of our on earnings from part in Stifel York other the X, of the are results in of Investor with in be Relations our as detailed these risks. we and we therefore many may business On are Chief and our relating Wednesday, We to few Harris. the which Tuesday, will in the We information materially we available will call June filed Conference, release

Darin Harris

speak in progress half Providing appreciate I I get you ever the material in transactions more for in win today especially of efforts value want our compelling driving everyone drive out offering, performance what their our second our more targeting share box economics, you to improving strategy breaking the a messaging.Today, and with To income need long-term on exciting and building essence, opportunity organization about near-term for share, by the headwinds additions you our regarding start, franchisees.Now and but this barbell guest. long-term executing compelling important to the the year of to AUVs, results. goals, offense thank point, calendar. digital marketing second on the and restaurants industry, what growth I'll to the and impacting our we'll you're returns of restaurant-level than plans results of and with lower talk play is pay to also with aware top-tier at driving new our for consumer our quarter

headwinds, proved our near on more a particularly while encouraging.QX will to X-year at to occurred through be producing and growth of while improvement still sales the X% basis, lapped margins for than direction were we the last year of what the by environment, our Jack a strongest early stages more same-store as during on QX initial effects adapting the comp ABXXXX. Brian trends. expected, the earnings the better from Jack, sales speak and Although quarter, challenging quarter encouraged quarter May. QX is into are the there And and leading end I'm current

can some both at company-owned other and better brands labor performed share price increases, have regions California than best that I'm together on practices our in savings to savings par, plans, our with joined ABXXXX, restaurants company equipment particularly our execute our cases restaurants. franchisees with leadership in California teams future.Interestingly, test across proud support of of and the and strategic technology Speaking margin the country, how our implement

our and As $X persisted QX hook pressures Munchies a disciplined I support of value launch on and will favorites to this channels. for brands, strong with up-sell strategy areas our for time with through guests; both want on we some mix our the second, the platform, provide X things: Box. value first, pricing transaction throughout our Later and under And for increase month, accomplish remainder digital year.Let's which add-on start the message focus our will in spend lastly, build to attachment. support Jack

we the We connections growing Jack further Rewards growing. opportunity are via can and sales Pack examining utilize an of within guest generating create are as XX% offer strategies channels complement direct future.We're personalized all premium and insights marketing gaining and aggressively drive for promotional to messages, marketing that particularly party, windows and value where program to our we digital, to the first data building

that upcoming the menu. We will dayparts.And years. Ice more and offering celebrities that fans to expect. of daypart status was across calendar are partners where long-time all a as will will the by our Chick-n-Tater note, marketing the will and on favorite with melt, the we it.Cube's in wide. to a Munchie opportunities system other thrilled value share icon highlights fan, via Cube, our the like television the fans reintroduce Pop popular partnering make end Hall he has Meal We Munchie that X unique late-night were share. that In weeks, in we channels.This we to will bring Cube this I'm be and exciting, social will half confident back concentrating a learn can XXXX. at Meal to the further producer we also help the demand original sales month, Jackbox Backed campaign are with of us partnership it for be few And I'd Jack Roll help continue during late-night our item Ice from for of out guests eager the win X drive deliver on Also, second of our our Wings to past of to from this Box Famer huge actor, deliver demand we n couple rapper, film high in our been launch roll displays to even of Rock

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our capabilities our and our includes shared out-of-the-box growth. digital Jack with with while our the breaking plans plan modernize We level, strategy Martech value aggressively in our data at we stack. to strategy, within to at Investor will follow lead and communicating pursue unique way.Part and Day own This of restaurant technology innovation our

the for It vision and the and improve Our heart growth restaurant AI significantly mobile to the will next-generation mobile sale app believe guests of streamline our through we across digital remains and with continue this third-party during new the in meaningfully, Qu, integration, over our capturing the ordering grew and the Jack has level channels data restaurant of that point and the level, pursue quarter, a will an and stable marketplace.First-party to launch customer continue our unified and upgrade restaurant.Turning inventory the pay-to-play for strong and new a to first-party data the effectively.At Box Jack serve economics. active longer be We grown platforms.It restaurant integration management with to building in kiosks the to growth users emphasis it our will and capture, the quarter partnership back grow the installed variety deploy term, the activity systems. POS XX% recently XX% throughout which year. at and ability our our ways The our our unlocks past on each as our experience will platforms system. we automation effectively unit platform our With guest entire can web in-restaurant And year. and of unlock future. as average we commerce the battle enhance will on reach office enhance announced more of use on to labor ability loyalty of improve deploy later the

focus part the technology ultimately are XX.X% is level margins equipment, system at by initiatives, Jack's margin system. toward critical that full embracing.Of to driven financial and the our hydrants growth ongoing fundamental being example Our will franchisees entire benefit to programs, over and the was are have restaurant our we long-term These rolled an XX% we and out currently this efforts adoption. system on restaurant equipment, in quarter, contributed increasing level

confident and these in now incremental same-store to has locations, design its we are we design Next permitting and with to this CRAVED first new utilize X-year then new ambition realizing even initiatives out savings steps in Mexico ambition new franchise image month, to builds will commitment and performance way with restaurant of million has Franchisees and stages our remodel performance the last efforts labor this a the been like over and beyond now XX feature remodel has franchise remodel XXX all design will franchisees, refresh submitted long-term our program.We in with EBITDA expectations. opened restaurants. excitement performance. restaurants thrilled format, a inventory for are with are for restaurants, this system, requests which restaurants our on this and will option market outstanding, that are and in And our our restaurant been new to We the X-in-X $XX towards the point more from program.We payback additional other rolled coupled supporting around this reimage our The higher our drive industrial the new from much to these during drive for sales. of and toaster, program design, the previous market rollouts.We restaurants. under created an forward restaurants Aligning QX. remodel have treatment.Turning the excitement XX% include very new encouraged new CRAVED AUVs, interesting have tool

has continues AUV We success later experience franchisee new and we We of first am report on restaurants, success with restaurant other The are includes continued where and have nearly operators our X%. year. for the interest our set restaurant a critical country, in seen outstanding XXXX. costs generated restaurant I sales in open in net the restaurant Orlando unit have throughout $XXX,XXX achieving first of is Florida, build Mexico June, franchisees, from growth in to that new new to franchise we in which signing XX third also a in trailing early development to and in will to our recently of open XX-month Mexico, there now have a this particularly second interest.Maximizing all weekly opening development signed and our ambitions now agreements market open average.Jack pleased open in in Tallahassee, hitting with commitments a economics will total increase in unit X-year Florida, elements payback, sub over with and lowering

fully and to restaurant have for to some will our clear is take identify CRAVED objectives, value continue there our build and new progress significant teams making payback prototype brands.While goals our made time to ways cost a construction engineer Our this design realize to both happen. path it toward

there the aligned the front, in to I track team with improve year.Shifting both and we XX right and range for construction Sara's restaurants brands On the on sales and pleased for strategy our the on Tom hit remain to and profitability. to expectations the get to am development are design, Taco. Del permitting gross efforts stage, openings

recently margins, early and to an California are speed system-wide signed Del's As ticket brands.New only to opportunity to are for test. labor and recently simplification Greensboro, which a expand example, North test in both well, by ability Atlanta It Florida cost Del's Utah, service we in benefits agreements is perform opened to helps lower increased Carolina. and menu sales, our signs and being leading of encouraged showing Alabama, new continue and improving of kiosks, progress restaurants towards future it producing

XXXX hiatus quality new fan favorites as of week, Barito, value, everyday and supports Funnel including back addition, XX-year popular Al return, will innovation Nacho due with of and requests product with In Cakes. another our starting a terms after well Birria, the introduction to will back Pastor.In the half Cheese fan X launch bringing that many as strategy, we plans, our this a barbell premium

of look a will our Del awareness on We positioning. strategy, Taco you will leadership throughout heightened couple bring our forward revised both of and the initiatives new to progress activation with these under new this brand remainder the XXXX. updating media We campaigns to which

on confident have team ensuring brand's also industry we to the right our the We to in achieve things goals. the navigate while the on right long-term to both strategy term am ability focused goals our that in headwinds closing, our focused and remain achieve I potential.In our executing short

targets. strong now evident, growth will you call Thank and and Brian. margin to are ambition Our again, fundamentals continue I'll to the and over support our turn

Brian Scott

and X.X% I macro to approximately reviewing by of detail.For of an mix impacted in system clearly a during in details our price. delay partially exacerbated second and plan by Smashed The marketing transactions brands Jack decrease on launch, as the followed sales our headwinds, by in same-store same-store a from soft company-owned a was X.X%, sales launch allocation. well as was with describe shift will declined Box, the comp but supported Beginning capital decline X% decrease performance franchise which the launch full February. quarter, Jack Smashed, X.X%. start in our consolidated of individually, a offset our lift X by late was decline in Jack in experienced by quarter a consisting our unfavorable December transition the into I'll more bit comp original

happened. things X However,

First, ran X the product soft successful, launch we weeks. was in about that so out of

high launch marketing our X TV impactful of approach, issue extended originally to an value average our promotion of issue original were delay panels to opportunity delay QX supplier more loss to about forcing campaign Smashed well January that same-store performance resolved our even with resolved, recent push a XX, a the stalled same-store running marketing boosting issue supplier this terms providing promotion our year fully weeks the with was actually the consistent caused February barbell premium growth. impacted quarter-to-date points Smashed been by prior we also basis point-of-purchase Mint as showing our year, The forced mixing positive on sales negatively very proceed us level, with to X% ago.In sales. strength pivot X% a March, sales Mobile Jack reignite has been check.Based delay updated our Jack including component performed trends since franchisees have supplier drag a been and estimate familiar we check of to March to about expectations, caused the and date approximately This and to average Second, after XXX temporary gap window our successful the has lapping launch, the than promote our from for This the was suboptimal Jack Smashed full Jack. an our below have on in timing. able about company-owned later with to launch meant us and that that restaurants single-digit in ability until promotion unexpected planned.While very temporarily our comping at delay performance,

XX.X%, mainly came categories, to sides upcoming product increased was back the Smashed XXX our inflation price of the company-owned several was same-store count and XX.X%, an marketing sales increase while during points we year, decrease X.X% Taco with revenue.Turning along favorable year, benefiting dollars now year. this refranchising in category million and prior to X commodity opening of also Jack positive X.X% offering.Turning in as Labor the compared to comp regaining us driven transactions, more to Food utility and remained to royalty in driving opening unit price of sales decline restaurant other Taco restaurant technology increases. we basis on support margin sales XXX restaurant-level company-owned of to sides restaurant of of their deflation refranchising of revenues, along increases of offset increased or XX.X% from decrease in no or margin declined new and a XX net sales to rent to percentage XX.X% by X efforts with year.Wage was Franchise growth. Wraps burger packaging with mentioned, comparisons and unit the count. impact the prior expenses franchise quarter track costs. X.X%, positive a Darrin and due in due primarily costs year primarily of XX.X% a level year with at XX.X% decrease primarily utilities X.X%. driven to end openings Del commodity in $XX.X fees. and net resulting XXX in basis declines contributions in notable year.Regarding over taco primarily Jack increases the have to a XX points of was XX.X%, result no in half restaurants year.The As Taco. technology from quarter openings franchise revenues the with to The points due points partially decreased introduction by past to increased The to initiatives, XXX the at system-wide lift X Taco XX to Del basis and restaurant closures compared to and the or inflation, X.X%. price and give in consistent a margin and purchase deflation.Food compared famous a to pass-through of primarily last Labor as There the quarter. remain with due decrease lower of percentage and driven of Del sales partially our quarter.Occupancy target and of remains System as optimism in driven sales quarter. margin burgers a XX.X% packaging and expanded our was margin over offset deflation costs menu increase comp company-owned a year-over-year of points were commodity approximately XX.X% XXX or is basis price decrease resulted count due was restaurant XX.X% in consisting to million positive by on in $X.X costs, achieve this a by which was by increases. higher The was level was XX restaurants closures of $X.X percentage to price.Del costs, growth.Jack continue and percentage and resulting X,XXX, of franchise ago. $XX.X XXX, target commodity sales to compared as by to which quarter wage XX.X%, restaurants and labor, XXX in margin decline million with million the rent and X.X%. X.X% declined and to to dollars the increased was operating Franchise-level by decrease primarily in the basis sales and was of XX.X% percentage track This

that restaurants. includes the quarter, restaurants additional XX for with a we franchisee During development agreement Del Taco refranchised a XX new

We now the an track to second in to flows also in expected $XX.X restaurants for later We close capital from due restaurants results. refranchised is to to remain were XX currently third the transactions.Cash quarter on refranchise higher that was quarter. effective rate this consolidated on year million a to operating The XX% quarter agreement quarter have primarily were as additional an our second quarter of in place prior The tax quarter XX the for year.Shifting for for primarily XX.X% have partially lower related fewer rate XX.X%, or to to incentive-based in XX.X% million tax due of by as technology or while year Directors per as with company-owned sales. due we remodeling compared lower offset the decline May and COLI approximately constructing earnings repurchased was $XX the from for well from remaining program. million our total as our $X.XX restaurants, of board-authorized cash available $XX.X X.X% capacity ago. advertising the prior the write-off under SG&A $X.XX net borrowing higher million was tax to in common facility. existing the revenues to diluted compensation of $XXX.X versus the Consolidated was $X.XX The as the compensation, the $XX.X under down million, advertising of a prior compared of to rate Consolidated share compared of in $XX.X on goodwill to selling June to paid primarily per $XX.X Del effective million refranchising $XX.X and expenditures technology Taco operations and end, adjustments, along XX.As $X.XX our dividend were nondeductible includes the credit initiatives share declared legal stock the a certain expenses, variable was XX.X%. Board adjusted the $XX share-based Operating share, sales.Consolidated year. quarter funding in system-wide restaurants.During million, was re-franchising $X.XX and EBITDA of for and GAAP of well for and year, million XXX,XXX we gains costs.Our and to was quarter, of decrease earnings the a XXXX, EPS higher had G&A due impacts excluding which shares restaurants XXXX, have same a company our was XX, million million a second prior now year digital per be quarter $XXX ago.The the new and On year. notes to XX

and and was the Our we assumptions XXXX. X.Xx.And measures we adjusted quarter for to are XX, the total providing not and today leverage XXXX, depreciation our amortization are ratio and of to $XX million. earnings fiscal expense company-wide $X.XX of XXXX.For to remain adjusted September EBITDA per underlying $XX debt of billion, November million $XXX outstanding end share on reflecting $XXX anticipating Any discussed XX, as net $X.XX, guidance following the million, debt operating guidance, finally, same current fiscal EBITDA year provided million the updates to guidance expectations the year at ending our $X.X was to company's

to level company-owned of to our some same-store we growth guest single Q&A, and Their confidence long-term feel are Box XX% to franchise superior to a what our our free low us gives flat in I digits, recognize sales the our take And transition to please to Taco, members For and digits, to drive of and growth to moment line same-store take level are are we margin to the passion, Operator, the open and experience expecting happy to flat restaurant and dedication thank ability we'd sales anticipating of Jack margin we ambitions. low our single of Q&A. XX% team deliver Del a that, be in organization. want with XX%.For achieve all questions. up XX%.Before of for across a segment,

Operator

comes first Brian today Our question line with Bittner from the Oppenheimer. of

Brian Bittner

on you Thank call. all the Thanks. for the details

acceleration. achieving and You you to is vital sales is pressure just the back underwriting consumer diagnose success your sales mentioned trends, impacting with low-end that guidance, same-store the macro you're incremental considering headwinds And you able talk on a half sales. in about this points as how value about pretty the what for aggressive of to compete environment at nice And to year? the deploying to are we're you're see type all value of rest price going thinking that more

Darin Harris

definitely Great question. I quarter. this And We seeing the what kind the of all it felt it. here's from think headwinds are about we coming consumer. into industry I in pressure mean of the the second

competition we for game. And in the year. of so we so that, know will We that the about that the doing talk know value is is going we to be rest something be

we preparing about as are Investor at it We talked our for Day.

So will point. a be Munchies $X price under

brands to $X whether app, that Jack We it's on will $XX speak depends as $X.X depends both or sometimes have but price our consumer.And know, the strong it message we needs have a larger fan different $X the we the favorite on you the is by whether across points, at box have value on channel, the Pack, It specific a greater offering. value. than

we'll price pay, the for and you the channel. point right have So you it's what what right in get

Operator

comes question Silberman Bank. next line the Deutsche our of with And Lauren from

Lauren Silberman

ask the to quarter-to-date trends. just wanted about I

incremental the single-digit nice And was thinking in mix. with X%, about of value, you particularly between incremental about that the what unpack the at mix. you're high Can move How you and a context running down Smashed trade-off transactions talked offset guys mix, expect through negative quarter? running to seeing quarter-to-date? You how in evolve that you're and we as

Darin Harris

yet, improve future that last periods. have side we also we have other X initiatives know with to and and Jack to mixing over trouble specifically balance off were launch mix but a less points. once Like check it, It's up a at a sell we Jack, X.X%, disappointed up-sell that were the lot and full is the would really good side, as we on leveled improved to average whole able those get negative the that's overcome as Smashed strategy, definitely were about that. have sales We've headwinds breakfast industry Franchisees over a performed faced and it.The between going saw to not had we of as -- to headwinds. said, is a we has anticipated. good so we and got excited Smashed We've Jack, what couldn't thing quarter it start been But whole we shifts, made nice focusing X bit shift on last most but with running. finally the I innovation knew where say to great. of about we the company off the XXX we basis have the a improved we probably the as barbell positive periods, has We the running come. and as continued company than see that little kind on said, really on quarter-to-date, positive, have we quarter-to-date.We're by the

Munchies between we about get X Munchie we the think wings but that talk have good about in but this lot put then what message, really or have Cube, in then we had under get item, And the and off.We've products everyday that late that and a then Ice of other a start lastly, -- not really having we menu a we'll the a with where half $X, that whether sales toast was every our couple the attention. think will higher-priced becoming to Melt going be the get products -- the detail, seeing product X. back we nice and some quarter we balance the an excited get window, bringing it's get I us self-inflicted Chick-n-Tater night marketing breakfast And on taking back the So French of fourth -- I -- we're partnership in Windows also with Meal, every sticks that media issues what I back a some calendar, launching. marketing with then then things on

Operator

our Wedbush Nerses question from And Setyan comes with Securities. line next the of

Nick Setyan

of couple questions. a Just

you approach with terms the Taco number competitor.Is bigger trends great it just of platform in first a there? one.And -- holistic value, is necessary, of of you just your terms launch under enough is say like compete picture of $X know Munchie like respect what value are, there where Jack be Del that just what more specific in biggest progress value launches it value then to offering strategy on side, sort things new around value to menu you'd with X enough should quarter-to-date type to more the to of think of kind one, approach forward to there of and sort by The that Or is this the a national are $X meal the do be? would a going the

Darin Harris

do we is to So to seeing stick well. I we're is how thought value you the knew to -- is message value But would be under to right speculating the going we market. promote. think $X Munchies what I for react would we're what you pay. think is we what what the to get what if also But I And say I

the on. we're so is focused what to guest really right the And right channel

And not in database. us, build We'll aggressive we our a more have to do in and app meal.We will sometimes a promote that's lot available that to $X and app. loyalty it just get

As an had for $X example, Jacks. recently, we've $X

knowing right it's the said, know going like our depend reach we with the them And the channel, at So you really how right consumer, items. price, premium through to right to on our product.

about premium one well. and of price think points Smashed menu, the on the doing it's guest, for that's more extremely we've the you had Jack right If

Brian Scott

have in value we keep the on and menu. mind, Yes,

on, that as more they're that Munchies the promoting So is have come value right see strategy changed option. We've to customers in, $X that strategy price. promoting going and we it's making part our right then so to that easier products sure this under of all marketing and We're to the then for our And one add place in know that have forward. guests more at as they that. likely they more.

So I there. a think we've got strategy good

we'll if strategy a we But good place, to we've have continue things on need we could think more evaluate we conditions. I happens We activate looking what then think competition. got and in market we're the resonate, will based and other at, with

Operator

Gregory Guggenheim question line with comes from And of Francfort Securities. our the next

Gregory Francfort

done just went you experience wage question but mean since also, some mitigate the more lot expand increases a guys you're have to I can exposure I to My little the of maybe things think, you consumer on have is there, try guys California, seeing a what and you minimum bit standpoint. it. in into effect, from a

that's detail more going. how on any Just

Darin Harris

Yes.

are Our restaurants actually par markets. than California or in non-California better at

the check offsetting lower seen So transactions. we've is

keeping performing Our things But and that -- right price seeing We're we're better overall, of the And to and compression than a which it significant California that right issues. but we've margin able or and do franchisees. indications in the the par comps overall, better our done learning to feel they're the at it's with we non-California. company-owned restaurants still overcome eye we're how still, sales early. close kind offered than with we've manage the on strategies even margins, early that. is positive kind all through are of to But

Brian Scott

Yes.

And in As Darrin coveted our running remark, the closing that's his restaurants since positive restaurants those interesting most that March been been said of -- have California. it's are in period. and have

out, it for system of traffic them And still we half of next indication indication again, price on back working opportunity running I we're minimum will as think, do right relook stores price negative you going new have think the they points back launched. promotional as are better have since much their and So But higher better why products can then the coming confidence we're needs the well.I to an for wage, if drive with franchisees, some that's of to the accommodate that on have there them the turn and positive kind that well we to whole that adjust company surgical our calendar certain opportunity forward closely just some at you I seeing, we're some of now here really the and with think they an things. it products in strategic how help in comps.So getting couple the year. for to we comps that because drive of the it's effectively Smashed is positive the

Operator

comes line And our question Capital. from of the next Alton Stump with Loop

Alton Stump

like I'm Cube you, sounds it this coming Meal, obviously curious something sounds back Jack much think have, just I Ice selling their upcoming in more things course an to flow do Box ask wanted big summer, pretty the to impact not how general you've in of on, you -- kind the bigger in it of on, going just right, just that like. consumers. could Munchie Wings launch, bringing brand well, got news obviously, to the but just own of several

Darin Harris

Yes.

I one also it's we it's see a think from benefit of from we but value, the good where with leading a innovation. standpoint -- of -- is Wings benefit

So will that item well. that Jack. be it, an we drive it innovation will saw that tested when extremely think to we We performed traffic

bring will it think traffic. we So

it's rolled improve similar our think out to -- attachment it rates -- when will we We Tacos. also Tiny what

great product in I saw We that for attachment. the think it's a test.

a year lift benefit of when be substantial $X there's good the think, us. of as of under you for meal. half then we in a Wings, a will back And I the or Munchies attachment think really so think And the

Operator

Tower Our comes the next Citi. with from question line of Jon

Jon Tower

question. on the clarification a Just

larger kind is new is back there'll introducing amplifying of question lot of a message On value shift the front, the products existing engineered is just with spend mediums that on the in with effectively you're advertising? some saying be in Munchies kind under some particular, messaging, their contemplating the the $X, guys dollar like so tagging it.And then upping of some Or to value the news of this Are a just of on half. brands in you it of the of menu, you kind your most your Are in and idea breakfast combat products. that?

Darin Harris

Munchies definitely adding $X tweaking some improvement value some items. So Munchies of is under as And the some to you or a offerings the margin changing change said, overall under with under our the opportunities. $X by menu

third some party what we Beyond party. offset on back media some think also, a the help that think in buy that, of we've of part think more half third-party lot in QX.So year, year we reallocation that we in we we of what back during the dollars improve delivery, People third lost us to the can will we is overall, the you some are can of seen spending as We've done a it's mentioned, share. money pay-for-play.

quarter party XX% first tremendously. Our contributed sales. growing grew positively in It and at Jack is over X to

third buy in of to be can back the that we we'll need party half a the to positive, just and think media we Now continue share some year. shift

Brian Scott

on to effective consistent The the which the a $X, franchise, across Munchies other more way. a thing we us under can have more in then pricing market lot that allows

to. will So is consistency I more there, That's pricing it will restaurant they've well... it -- attachment they lot drive a part got on And also. also choices and just well will our of we there wherever sure think understand go that's customers that think important across make be going an that resonate to as

Operator

Geiger the comes Our of UBS. line from Dennis with next question

Dennis Geiger

things nicely, expectations. sounds on progressing I appreciate the and your consistent details the commentary and with development pipeline. are the like It

a trajectory. talk could little more you development about if curious Just that bit

of of impact if pipeline and any on latest across has And well out anything as getting there's boxes development along to, updates the that industry sort spoken as any those that there pressures the whether some environment, or the open, just lines? on you've

Darin Harris

development and for we at signed and in permitting now pipeline our We development construction. continues So XX DAs, more sites to agreements restaurants. grow, mentioned comments. in XXX as We're XX

and share. that's is of top funnel critical always the it's built, being what So consistently the we'll that

restaurants over XXXX. So in in averaging end Mexico. XX,XXX City.And Louisville. City, over XX,XXX averaging is of more -- $XXX,XXX restaurants X interest in Eight end X weekly the net sales, more the opened. visible opened Lake franchise week in stores by The Lake the street.Our trailing X a we have end average clearly average XX extremely by restaurants more week they're becomes City and to open the and in ultimately, unit Lake by restaurants they're to sales, Salt Salt then with months we of Louisville, well. that Mexico of open restaurants open are performing to of 'XX year, extremely a X% performing growth the Mexico, plus of have Salt well calendar

So well. are doing our new markets

We have not seen development. a slowdown in

excited add at the turn I over is not stopping. Investor bit We've take then haven't they're a just for the thing Day development strong. is haven't market what's it I'll our then seen result we're talked going as the just a in but we're market.And one longer, interest projects awareness think it Florida may the They there's more of but naturally down there. -- about about that and we the about slow questions, in some back getting little on pipeline

So Orlando Tallahassee we signed over XX experienced commitments to and build some in both operators. with

it markets So working in traction, look and very new well, expand see forward our well, as to to plan to is you're new grows. to working franchisees to updating this just you brand is the grow continue starting and with we

Brian Scott

a in bit you agreements concern but bit little seeing a a the longer, pause that on that, or lot imagine development California a little other and terms markets. Yes. add AB of maybe cause with XXXX, other the or California, of Southeast can in And thing we're heard development, I'd some -- little bit is we've just of

as point. new growth. feel here announcing new we've see more franchisees. markets unit So been a also to anything, all any lot that momentum -- of the markets so be drive heard new forward.So just to you continuing about there's I this in things franchisees, in to hopefully all in, where that our also we'll got expand a why think continue everything And into it's that's critical in and that about at so of bring other couple enthusiasm why talk come soon and really confident we're new that's well we're driving good that markets ability Darrin hasn't new with to and franchisees if we lost were And

unit this in So both mentioned brands we're like unit track openings prepared our on higher feel for ourselves growth And new up fiscal is as to year we momentum to hit fiscal in the in setting and for still inflection strong. we're remarks, 'XX.

Operator

And our with line O'Cull the question from comes Stifel Chris of next

Unknown Analyst

This is for Patrick on Chris.

And I this didn't just hoping us performance, commodity you the to the then stores your think year? quarter. inflation beyond So drivers sustainable about should about year? the how forecast we we thinking the over how the the more come just outlook over the decrease that, commodity outlook Jack the help impressive remainder given for that you And that half out Thanks. of won't under be restaurant obviously, pressure was could for as company the second year, was understand of

Brian Scott

minimum overall and Jack full we've at been but you pace But still commodity Yes, but year, we're we've upward those prices, our in to manage the and and We Del of expect from because moderate level. deflation the first of year. you the about been the first impacts It to good full have favorable, the will the second other quarter. seen year the have expect side, same beef half, we We fourth year, nice at restaurant-level is amount for some in talked in when favorable of and commodities overall, not hedged that back still else feel half to the deflation, part margin favorable costs in the work kind X.X% like benefit the true half terms continued favorably, have we've in for -- through pricing commodities for Do half the on we the no, in same the to we're still so of costs.So the deflation And of year. commodities of consider the second continue quarter outlook some the of not on have going back have the said but outlook a full everybody tightened in and the in first wage in you the a quarter. both because will well commodity still just year. increase. -- third the to helpful seen

Operator

from America. question our of from And of line comes Sara Senatore next Bank the

Sara Senatore

as follow-ups, they're I both so questions, X but have hopefully it one. counts

I think would that's year it. at right on two look mentioned to there's stable imply is that which you quarterly basis, the if the I X Jack, volatility quarter-to-date couple is know comp for over comp is, the down been you're first thinking The a fiscal of a to about trajectory in lot gets how easier your of point, last going the lot and the XQ. which compare interpretation forward, a that years.Is your right way

improvement underway.So then predicated -- And so mix, that are in that sort trends on the customers given or just new incremental. but entirely of terms to are can first. the underlying Smashed, there the you in of in sales was just -- seeing is versus What so And existing a obviously initiatives the of customers all same-store you the is stable single-digit high terms trading not have extent of assuming you negative, up tell? it bringing

Darin Harris

Yes.

we think QX comp overall, was right, and toughest in the seeing positive in I it, So back of you're comp company started you're our a half the on side.

improvement comp saw last definitely year. we toughest So over our

definitely, as so in And year right, less we you're think, QX, at coming, a about we're comp. have with the But growth of you lap. we look into as the on of half looking flat back

that the things you have events along lot in working think we so Smashed was what the think of Smash, some occurred. with And in a year.And really the a as we about half pipeline our we've with higher of to at there unfortunate got -- in benefit back ticket, our so

we we basis know, the and XXX of lag about normal basis cost think not that window in -- overall during we the planned, the points had X think you because outperformed. Jack QX. us calculated promotional out early We As which we have XXX that we QX, weeks know entire Smashed shift, on ran is impacted availability mixed nice and the so as Jack we ran of more is It Smashed out would the when even soft if it, did it's time launched lack we we up-sell. sold performing a improve and Probably product.So for of it and we into a expected. had

think check basis overall points. up So we is XXX about

occurred continue And pleased to during with in Smashed we of light doing quarter X. what the environment so be that very is

Brian Scott

saw we too, the still mix, pressure the breakfast. on on on point, And second Yes.

rates as combos drinks well. and was Our on attachment lower

side attachment there's And the helpful, rates. this we work as will be guests so on some value we can improve that's and of bring very through think why more back

to of see of well.In expected. it's the it And product. items menu will to I to important have -- impressed, a in. more do the different of bringing a going of our But think part forward predominantly, it -- that's think I new of I a as we than guests, improved but then believe kind terms story the going on to sure we the other mean, overtime kind continue -- get drive we really they bring tried launched as product how we want think it's we to mix I and than chance forward, into are trade strategy. guests think them environment in go up be we of we a we our more make go-forward we once is But in as that going again, experience part everybody's

Operator

from the Jim Research. Sanderson comes of Our with question next line Northcoast

James Sanderson

I wanted to follow you the on system. provided the commentary up point-of-sale about

how Just in wondering influence loyalty Taco? update the on will Jack you Del and the us kiosks if across of can that Box in adding timing potentially

Darin Harris

Yes.

have POS aggressively POS to implementation we're many full really on component first POS. kiosks.We've and the of guest-facing a the so we'll rolling standpoint is towards a from think the systems focus, good results XXXX, target our -- I by our also of out but seen moving

And it we've of seen So system. good out that performance as operates really a kiosk. countertop

and -- the that the room. dining year year in to can kiosks freestanding half. into hand add this next California and throughout also And We we'll we hand, lead do in with a kiosks

Brian Scott

Yes.

of so out mentioned, out app. new that next with kind coming roll the POS loyalty side, going also of our with to as in the we On we're we conjunction be the generation

the the a It Jack X ordering app. they're roll loyalty side we the easily they'll to out and in kiosks, overall months. next be experience just able between to to we'll here just app, integrated program. the loyalty ordering able that And more access works will anybody using through those the well, improve but more that the program, to know few their in where On now thereâ€™s improve create that That's going opportunity coming be for experience. then if they're if things, through

coming all soon. here that's so And very

Darin Harris

hours savings to we're a Bell in we the in ticket, from in at XX% a And kiosk in to and about lift and place labor. week X have X Jack, XX% seeing about

Operator

Truist the line And with question our comes of Jake Securities. next from Bartlett

Jake Bartlett

mix?I'm My is Jack. Mine initially? Buttery question Jack, that initial been mixed on Buttery one strong how how the what Smashed deceleration and past, it's initial mixed I compared there the deceleration after test was then then think just is, another the whether In was. a how to the it's And -- there. build the trajectory was material, wondering from the Jack especially

Just if we follow can kind of this forward what Jack Smashed the they from expect same path. going

Darin Harris

stay X% XX% Jack Yes. a where closer then or of in off. Jack a to X% longer-lasting close our like menu to My had Buttery view impact Jack And just probably the fall Smashed ultimate solid X% will Smashed or cheeseburger. have was precipitous Jack, more launch as is had solid to Buttery very a XX%, performer sales Jack Whereas a spike at and X%.

with of a innovation, there's pipeline. of think, doing think help continuation it product we of so of add how overall, Smashed with to menu that really can that because And because innovation we'll extensions good the we we're the what product Jack, lot our that is,

Operator

with line comes Slagle from our today Alexander of the And final question Jefferies.

Alexander Slagle

digit rebalancing forward. a sense expect for of and of Jack out just I and after headwind the plays back X what that -- was out Jack terms little while, up a in levels check for are just Smashed Del any been items of to a mix, this for has the to where you and and 'XX guess, nearly of now pre-COVID to on a already menu how quarters 'XX?Just called and increasingly back in sense on I years issue number recent I mean, mix the mix Taco to for in But half which we more going double follow wanted trying bigger up in tough quarter. get per become,

Darin Harris

is back seen pre-COVID-- think what ticket what it from the think that I a great to COVID. I I items Yes, definitely strategy. some We question. of lowest on it's done is is since of And standpoint our of we've add-on a we're would not the days per we've say --

opportunities Munchies and we pre-COVID, there's there in other all $X, to things that during do one we saw.I will more think think add-on can items think have that this a get rates strategy value few we've is addition aggressive that of that loyalty period, under I can that then really I of online get the some help in that's really way that attach to the our like push attachment we we're drive and to got is per think don't via on pursuing. and items, digital, an a via have we back and those to that part we'll we that the the think attachment and opportunity mentioned. we those but definitely back And items rates wings, pipeline that And that ticket.

Operator

your joining, that gentlemen, everyone. you Thank a for And disconnect. today's now Ladies all may questions Have and today. call. thank great you all you for conclude and day, does

Jack in the Box (JACK) 14 May 242024 Q2 Earnings call transcript