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Jack in the Box (JACK) to Post Q2 Earnings: What's in Store?

Zacks Equity Research

Jack in the Box JACK is scheduled to report second-quarter fiscal 2020 results on May 13, after market close. In the last-reported quarter, the company delivered a negative earnings surprise of 14.6%. However, it beat the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 0.3%.

How Are Estimates Placed?

The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at 73 cents per share, indicating a decline from earnings of 99 cents recorded in the year-ago quarter. For revenues, the consensus mark is pegged at $214.7 million, suggesting a decline of 0.5% from the year-ago figure.

Let's take a look at how things have shaped up in the quarter.

Jack In The Box Inc Price and EPS Surprise

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Jack In The Box Inc Price and EPS Surprise

Jack In The Box Inc price-eps-surprise | Jack In The Box Inc Quote

Factors at Play

The coronavirus pandemic is expected to have materially affected Jack in the Box's performance in the fiscal second quarter. In a recent operational update, the company announced that company store sales and Franchise sales are expected to decline 4.1% and 4.2%, respectively, for the 12 weeks ended Apr 12. System same-store sales are also anticipated to decline 4.2% during the same period. Notably, the decline is likely to get reflected on fiscal second-quarter results.

To contain the spread of the virus, the company is operating only through pickup and delivery services, with dine-in facilities shut. Notably, decline in store traffic along with high costs associated with food, labor and unit expansion is likely to have weighed on the bottom line in the fiscal second quarter.

Nonetheless, initiatives like menu innovation along with increased focus on catering, delivery and marketing are likely to get reflected in the company???s fiscal second-quarter results. Also, the company???s partnerships with DoorDash, Postmates, Grubhub and Uber Eats are expected to have boosted the top line in the to-be-reported quarter.??

What Our Model Says

Our proven model does not predict an earnings beat for Jack in the Box this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. But that's not the case here.

Earnings ESP: Jack in the Box has an Earnings ESP of -3.85%. You can uncover the best stocks to buy or sell before they???re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #4 (Sell).??

You can see the complete list of today???s Zacks #1 Rank stocks here.

Peer Releases

Domino's Pizza, Inc. DPZ reported first-quarter 2020 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings in the quarter under review came in at $3.07 per share, which outpaced the consensus mark of $2.29. The reported figure also improved 39.5% on a year-over-year basis. Quarterly revenues of $873.1 million beat the consensus mark $867 million and improved 4.4% year over year.

Yum China Holdings, Inc. YUMC reported first-quarter 2020 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings of 16 cents compared favorably with the Zacks Consensus Estimate of a loss of 25 cents. However, the reported figure declined 72.9% from the year-ago quarter. The company???s total revenues of $1,754 million beat the consensus mark of $1,145 million in the first quarter of 2020. However, the metric deteriorated 23.9% year over year.

BJs Restaurants Inc BJRI reported first-quarter 2020 results, wherein the bottom line surpassed analysts??? expectation but the top line missed the same. Adjusted loss (excluding an impairment charge of 12 cents per share) of 10 cents per share was narrower than the Zacks Consensus Estimate of a loss of 38 cents. In the year-ago quarter, it had reported adjusted earnings of 62 cents per share. Total quarterly revenues of $254.6 million missed the consensus estimate of $261.7 million by 2.7%. The top line also declined 12.4% year over year.

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