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Here is a look at guidance ahead of earnings tomorrow


  • To maintain or sequentially improve two-year average company same-store sales, Jack in the Box will need to post -7.2% or better for 3Q
  • Per Factset, the Street is expecting a company same-store sales number of -8%, which would imply a sequential deceleration of 40 bps.  It is worth noting that on four of the past five quarters, the Street’s Factset estimate has been between 0.9% and 1.8% overly-aggressive.


  • Same-store sales are expected to decrease by 7-9% for Jack in the Box in 3Q, and decrease by 6.5% to 8.5% for the full-year
  • Same-store sales are expected to increase 2-4% for Qdoba in 3Q, and increase by 1% to 3% for the full-year
  • Diluted EPS full-year guidance is $1.85 to $2.05
  • Commodity outlook for the year is for a decrease in cost of ~1% (Commodity costs are expected to increase by about 2% in 3Q and 3% in 4Q)
  • Beef costs are anticipated to be flat for the full-year with low double digit increases in 3Q and 4Q
  • Sequentially increasing beef costs are expected to be offset by declining chicken and bakery costs of ~6% for the balance of the year
  • Capex is expected to be $125 to $135 million for fiscal 2010
  • “We plan to increase our ad spend in the back half of the year (FY10)”
  • Gains related to franchising activity should be higher for 3Q10 than they were for 3Q09
  • Full year gains in the sale of approximately 200 Jack in the Box restaurants are expected to total between $60 and $70 million with total proceeds of $85 to $90 million


  • “44% of our restaurants are located in the 10 states with the highest unemployment, while only 2% are in the states with the lowest unemployment
  • “3 for $3” promotion was launched in late April and it is margin friendly while offering a great “value proposition” for guests
  • Jack in the Box added a raspberry flavor to its smoothie and real ice cream shakes – will be interesting to hear how smoothies are performing with MCD’s big push…
  • California is outperforming the Texas market; both improved in 2Q but Texas remains the more challenged market for JACK.

Howard Penney

Managing Director