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

Harendra Ray

Jack in the Box Inc. JACK is scheduled to report second-quarter fiscal 2019 results on May 15, after the closing bell. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 3.9%. The bottom line also outpaced the consensus mark in two of the trailing four quarters, the average beat being 0.8%.

How Are Estimates Faring?

The Zacks Consensus Estimate for second-quarter earnings is pegged at 93 cents, down by a penny over the past 7 days. This indicates a 17.5% gain from 80 cents registered in the year-ago quarter. For quarterly revenues, the consensus mark stands at $217.5 million, suggesting growth of 3.7% from the year-ago reported figure.

Let’s find out the factors that are likely to shape Jack in the Box results in the to-be-reported quarter.

Factors at Play

Jack in the Box’s top line in the second quarter is likely to be driven by robust franchise rental as well as franchise royalties and other revenues. Notably, the Zacks Consensus Estimate for franchise rental as well as franchise royalties and other revenues are pinned at a respective $62 million and $38.1 million, implying a 6.9% and 0.2% improvement from the year-ago reported figures. The company’s partnership DoorDash, Postmates and Grubhub and Uber Eats are also helping the company to generate incremental sales.

Furthermore, the company is expanding its mobile application in few markets that support order-ahead functionality and payment. Management is also reaping benefits in terms of higher ticket from mobile orders. However, traffic decline is likely to hurt the company’s second-quarter revenues.

Meanwhile, refranchising benefits are expected to have aided bottom-line growth in the to-be-reported quarter. We believe that franchising a large chunk of its system will lower its general and administrative expenses and thereby boost earnings. These apart, Jack in the Box aims to continue focusing on effectively managing costs and improving guest experience by striving toward operational excellence.

Jack In The Box Inc. Price and EPS Surprise

Jack In The Box Inc. Price and EPS Surprise

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


What Does the Zacks Model Unveil?

Our proven model show that Jack in the Box is likely to beat earnings estimates in second-quarter fiscal 2019. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen.

Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. 

Jack in the Box has an Earnings ESP of +0.12% and a Zacks Rank #3.    

Stocks to Consider

Here are some companies in the Retail- Wholesale space, which per our model have the right combination of elements to post earnings beat in their respective quarters.

The Children's Place, Inc. PLCE has an Earnings ESP of +9.96% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General Corp. DG has an Earnings ESP of +1.51% and a Zacks Rank #3.

Dollar Tree, Inc. DLTR has an Earnings ESP of +0.51% and a Zacks Rank #3.

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