Guidance holds and reflects 10 cents to 12 cents of extraordinary expenses in connection with incentives to franchisees during the store remodeling effort this year. So Xing out this one time charge, guidance would be $1.52 to $1.76. Bottom line, the $1.62 consensus estimate looks solid with comps now stabilized and California a much brighter picture. And another real good bit of news is that they acquired 20 more Qdoba units from a major franchisee. The percentage of company owned Qdoba units is going higher and one can understand why. They are grooming that operation for the eventual spinoff. The more company owned units the better in this regard. Those who follow my posts know that I predicted this sort of thing after that major buyback of Qdobas in the Boston area. So at a current price of 23. and given that $1.62 estimate for JACK we have a stock selling for a little over 14X earnings for the fiscal year ending seven months from now, on about September 30. Then we are looking at $1.92 the following fiscal year which is also the consensus number (I think a bit low however). And what a tremendous relief to know the company is now having an easier time closing those deals where franchisees are buying company units of the JACK brand. Also, they received back about $18 million of the "bridge" loans to franchisees to help them close these deals per the lender's wishes. So this is some very encouraging news overall. And the company still has $50 million authorized by the board of directors for the repurchase of shares in the open market.
Big J in L.A. (retired security analyst, The Los Angeles Society of Security Analysts)
Now I know why IR blows off the small investor when you call in vs. the rumor of select disclosure to the big funds in Boston (ie select disclosure). Very interesting and will never touch this stock until there is a change in which the company funnels communication.
Noticed they are opening lots of Qdobas this year. Especially, in comparison to Jacks. This is the big "ace in the hole" for this stock. Lots of good things quietly happening here. I would still like to see a major menu restructuring (its just too unfocused: from teriyaki bowls, tacos,mini-churros, egg rolls to burgers and pastrami sands....crazy). But, all in all, the story looks good.
One advantage of having the capability to try different menu items is that you may hit a big winner at some point. JACK is known in the industry and among the analysts as a company with tremendous product flexibility, that is, innovation, as they can add or remove menu items very easily in contrast to the other guys such as Big Mac. For example, the grilled sandwiches need just a little more promotion to take market share away from some others. They are that outstanding a product I believe. I was surprised they removed the Southwest Chicken salad here in L.A., which was one of my favorite dishes. But the results apparently were not good enough. Keep experimenting and I think they come up real big one of these times like with the Teriyaki dish.