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Jack in the Box Inc. Message Board

  • Renewal Renewal Nov 10, 1999 10:28 AM Flag


    Watched all day yesterday and this
    morning...looks like someone is still selling, but stops when the
    price gets close to 22, then starts again when it gets
    close to 22.5.
    Once this person is gone, should then
    see a rise...........IMO

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    • Really appreciate the time you spent putting the
      notes together. Heck, PBS charges $5 for transcripts,
      and you're doing it from the goodness of your

      Regarding the conference call details:

      1. Especially
      liked the balance sheet improvements, as compared with
      the numbers shown on the Yahoo! profile. The small
      cash cache was one of my concerns, and it doubled.
      Must be like my checking account...depends on what day
      of the month you check. And the continuing reduction
      of long term debt is also gratifying.

      2. The
      "cold water" advice of the slowing margin improvement
      wasn't unexpected, and while rationally explained,
      nevertheless a disappointment.

      3. I was sorry to hear
      they no longer have any international units. Back when
      I previously owned shares I was fascinated by the
      post which discussed the Hong Kong store. Guess Jack
      doesn't cotton to commies (just kidding)!

      4. The
      Tennessee and Lousiana news was very positive. Even though
      I wouldn't expect that region to contribute much to
      the bottom line for a few years, success there will
      cast so much bright light on our little "West Coast
      secret." If those seeds germinate, analysts will notice,
      regardless of near term harvests.
      Regarding the post
      about TV ads, though, IMHO doubt they'll spend huge TV
      ad costs until they have a critical mass of stores,
      probably not in 2000. I'm also very curious whether Jack's
      sarcastic TV image will square with traditionally courteous
      Southerner's. Would appreciate Johnboy's views on

      As hoped, there wasn't anything in the results and
      discussion that justified the selloff we just weathered, and
      perhaps the MCD conference comments helped explain

      Jack provided the "scratch," but thanks again to you
      for cooking it up for us all to chew. ~Geo.

    • As a fellow longtime JBX shareholder, you are as
      familiar with the current situation as I, since we've been
      through this many times before. This latest dip has been
      extra frustrating. If this is how JBX gets treated with
      industry leading results, imagine what might happen to the
      stock if they ever actually missed an earnings estimate
      or reported a piece of bad news. Scary thought. Then
      again, maybe the stock would go up! ;-) Seriously, when
      JBX goes on sale like this, I buy a little more for
      my retirement funds and forget about it. It's always
      turned out to be a good investment. I'm still looking
      for $30+ within a year and $40+ a year or two beyond
      that. Not explosive ROI, but good returns from a solid

      I'll repeat my opinion that the road back
      up to old highs will no doubt be rockier than we'd
      like due to the precipitous nature of the drop and the
      significant technical damage done. There will be some sellers
      at $24, $25, $26 and $27 who will probably just be
      happy to get out of the stock and break even. But if
      we're patient and wait for the selling to end, we'll
      reap the rewards longer term. The initial success of
      the Southeast openings have got me enthused about
      this coming year.


    • Wonderful job with the conference call notes.
      Many, many thanks.

      Today was just one more of
      those days JBX long-termers become depressingly
      familiar with...every other major QS restaurant stock
      outperformed us, in spite of such remarkable news that ought
      (IMHO) to be taking us back to our previous highs and


    • Thanks Bottom Feeder, yes that was a typo and
      should have been "above average".

      Someone said a
      while back they thought an MCD analyst meeting was
      impacting JBX. They must have been right, since Nugent took
      the time to comment on it. Perhaps it was also why a
      lot of other QSR stocks tanked the day before
      yesterday? I wish Nugent had been more specific, but one can
      infer that MCD execs said they were targeting JITB and
      trumpeted the success of their "made for you" food prep

      I agree that Nugent countered MCD's
      claims with the fact that if MCD is doing better, it's
      not at JITB's expense. Who can argue with JITB's
      average weekly same store sales up 8.7% for FY99, with a
      5.3% increase in customer visits and a 3.4% increase
      in average check amount? Are any of its closest
      competitors doing nearly this well? As far as I recall, the
      rest are flat or trending down slightly.


    • XTGO's post -

      >>Later on, he said
      that new stores were opening at anywhere between 20%
      and 50% of average<<

      I'm positive
      Nugent said new stores were operating between 20% and
      50% "ABOVE" average. That was why one analyst
      suggested JBX consider only opening in new markets. 20% to
      50% "OF" average implies new stores are doing poorly,
      it is exactly the opposite.

      I thought the
      conference call went really well. Especially like comments
      targeting McD's and their mentions of JBX.

      thanks for all your informative posts.

    • Thanks for your kind words. This board has come a
      long way in the last 6 months with excellent
      contributions by all. It used to be pretty lonely around

      Here is what I think is worth emphasizing from the
      conference call. The 2 new restaurants in the Southeast are
      performing exceptionally well. Nugent didn't want to come
      off as braggadocious (his word), but he said the
      Charlotte store was "far exceeding our expectations" after
      8 weeks of operation, and sales at Baton Rouge were
      "very strong" after being open for 8 days. Knowing how
      sober Nugent usually is in his delivery, this is about
      as close to hyping the success of those openings as
      he can get without rodomontading. ;-)

      impressed me is that they have "not done any media", which
      I assume means TV commercials as well as newspaper
      advertising. And they don't plan to until they get 3 or 4
      stores open. Imagine pulling in those kinds of numbers
      without introducing their award-winning commercials
      featuring Jack, the coolest QSR CEO in the biz. They feel
      that transplanted Texans and Californians are telling
      their friends and driving customer traffic. Nugent
      admitted they did not know what the new store sales
      volumes would settle in at after the grand opening
      hoopla, but IMO, once those TV spots are running, they'll
      get another boost in business that will sustain them
      longer term.

      Later on, he said that new stores
      were opening at anywhere between 20% and 50% of
      average, although he wasn't specific where new stores fit
      in that range, be they in Oregon or North

      Folks, JBX may currently be out of favor (so what else
      is new?), but these very preliminary results give me
      confidence that JBX will continue to outperform most of its
      peers on their way to becoming a nationwide chain. I
      also think we will see some modest upwards earnings
      estimate revisions in the coming weeks.

      As always,
      do your own



      brag-ga-do-ci-o, brag-ga-do-ci-os.
      1. A braggart.
      2.a. Empty
      or pretentious bragging. b. A swaggering, cocky
      manner. [Alteration of Braggadocchio, (probably from
      BRAG), the personification of vainglory in The Faerie
      Queene by Edmund Spenser (1552?-1599).]

    • You are one of the big reasons that the JBX board
      is one of the best and most informative that I've
      seen. Let's all keep it up!

      JBX still gets no
      respect, so I hope some of you won't get too disappointed
      if we don't pop to 30+ right away. This stock is
      like a tree. It grows slow, but it can reach high
      places if you are willing to wait. In the meantime, I
      hope you were able to take advantage of the recent

      The news about the expansion in the
      southeast is great! The success of expansion there will be
      one of major factors for this stock in the coming
      years. Once JBX becomes a national chain, look

      Go JBX!!


    • David:

      Thank you for the very thorough report. You're an asset to the board. (And yes, I'll do my own research!)

      - Parker

    • Jack-in-the-Box 4Q99 Conference Call


      (continued) Talk about your outlook for next year and are you
      comfortable with the range of estimates for next year? And
      also, do you expect margins at the restaurant levels to

      I would say at this point we are comfortable with
      estimates on the street. In terms of the margins, we have
      been successful in improving our margins this year,
      but I think it's going to be very difficult to
      improve on those this year. It's interesting to note that
      with a number of minimum wage increases, hourly labor
      hasn't varied more than about 1% of sales for the past 8
      years. We think we will be able to offset any future
      wage increases, but I wouldn't look for a lot of
      margin improvement. In terms of costs, we expect beef
      costs to go up somewhat in the coming year, with
      poultry and pork pretty stable, but food costs probably
      won't vary a whole lot.

      On the year end unit
      count, do those numbers include international
      franchises, were there some closures? Can you give us an
      example of some of the new menu items in the Southeast
      and how they're being received?

      We opened 33
      new restaurants this quarter, bought back 2 from
      franchisees, and we closed 3 company units to end the year at
      1,191. There are no international units open. Domestic,
      there's 326 at the end of the quarter, they opened 1 and
      we bought back 2. That gives a total of

      We have a number of chicken products that we have
      tested successfully and ready to roll out.


      When we went into the Southeast, we went in with a
      number of items that are unique to the Southeast, like
      Sweet Tea, and biscuits. There were some items on our
      menu that we did not take into the Southeast, for
      example, Teriyaki Bowls. We felt that this was an
      opportunity to go in with a menu that was a little more
      manageable than what we have in our other markets, and it
      tested out very successfully of course in Portland, and
      so we decided to continue with that in other new

      Has the breakfast mix thus far been higher than the
      rest of the system?

      I don't have an answer for
      that, we've only been open for about 5


      As always, do your own


    • Jack-in-the-Box 4Q99 Conference Call


      (continued) But stay tuned, we'll keep you informed quarter
      by quarter.

      What is the opening schedule in
      those new markets this year?

      We'll open about 9
      in Charlotte this year. Baton Rouge we'll open
      approximately 9 this year also. Nashville we'll probably open
      6, with the first in mid-December.

      words. On the 3% comps for next year, what are you guys
      thinking in terms of pricing and or mix, where do you
      stand on combination meal incidents? What about service
      times in general say today vs. a year ago?

      the year we're expecting about a 1% price increase
      and a 2% volume increase.

      On combination meal
      incidents, it's up noticeably, do you expect it to continue
      to increase?

      I think the impact on average
      check from the combo meals has been fully realized and
      I think it will stabilize. We're doing some work on
      combo meals for breakfast, so there may be some
      positive impact there. Service times today is about 20
      seconds slower than it was a year ago, and that's an
      opportunity for us, and we have a number of initiatives in
      place to address that and will be tested and rolled out
      throughout the year. We see that as a big opportunity for

      Congratulations on a fantastic quarter. The S G&A line, how much
      of that was discretionary, is there any opportunity
      for some of that to go away in the next couple of
      quarters now that you're finished with Y2K? How much of
      that do you see reducing your operating leverage?
      Also, you have a distribution center in Illinois that
      will probably be delivering to the southeast, tell us
      a little about that.

      In terms of the 4Q in
      G&A, we did do some write-offs in the 4Q, anticipating
      closing 2 or 3 restaurants, so there was probably
      somewhere between $2 and $3M in additional write-offs that
      we didn't have in previous quarters. We did have a
      fantastic year, so we impacted the 4Q by approximately $2M
      with additional incentive costs for both corporate
      execs and field managers since we exceeded our

      In terms of distribution, we do have a distribution
      center in Danville Illinois, which we will use for
      distributing product into the southeast as well as St.

      Do you have any year end numbers for the balance

      Cash on hand was about $10.9M, long term debt was
      $303.5M ($1.7M of current maturities) , shareholder's
      equity $217.8M; Total Assets $833.7M.


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