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Jack in the Box Inc. Message Board

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  • bulletproofportfolio bulletproofportfolio Aug 4, 2010 5:38 PM Flag

    Favorable report on balance

    Favorable? Seriously, are you joking? They missed. Same store sales at Jack declined 9.4%. They reduced full-year guidance. Also, and most troubling in my opinion, they are getting most of their earnings from selling restaurants, not from selling food (by my calculations, about $14.6 Million of their $24.2 Million in earnings were gains on sales of restaurants).

    How is any of this good news? What will their earnings look like when they have no more gains on sales of restaurants to pad really poor restaurant operating earnings?

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    • A fair criticism but uninformed. Check all the unusual charges this past quarter. Then consider the cash flow picture. And realize that they will be selling perhaps as much as $400 million worth of company-owned units to franchisees over the next 3-4 years. You will not recognize this company by 2012-2013. It will be even sounder financially and with a substanually reduced number of shares outstanding because of buybacks. But it is all a moot point, my friend. This company will be bought out long before then. This I would bet you anything. You name the wager amount.
      Best, Big J in L.A.

      • 1 Reply to john.heil2
      • Uninformed? Well an uniformed slob like me sees that they missed non-GAAP earnings by .03 this Q. Being a retired securities analyst, extremely well informed and all, you would probably know that non-GAAP earnings exclude ALL of the "unusual" charges you mention. So why do you even mention that?

        As far as selling their restaurants, I actually think this is a good move on JACK's part, but why would you include those "unusual" gains in earnings? They have nothing to do with the underlying operating business and will completely disappear in about two years if everything goes according to their plan.

        Ex-gains on sales of restaurants, I calculate that JACK earned about $0.17/share this Q. Annualize that and you get $0.68 for the year, which has the share price at around 30 times what the company earns actually selling food. NO THANKS!

        But a white knight is going to come and buy out the company and save all the suckers who actually bought the shares, right? Buyout rumors are generally the last refuge of losers who've made a bad investment, but don't want to admit it. Good luck with that.

        I'll also pass on your wager, although I'm sure a random screen name on Yahoo is good for his marks...heh.

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