Jack in the Box Inc. (NASDAQ:JACK) Q4 2019 Earnings Conference Call - Final Transcript

Nov 21, 2019 • 11:30 am ET

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Jack in the Box Inc. (NASDAQ:JACK) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Leonard Comma

plan to build on this success into 2020.

2019, March, Jack in the Box has returned to being a single branded entity, now 94% franchised and asset lite. We exited our transition services agreement with Qdoba, officially completing our restructuring efforts, and establishing a lower cost structure. We completed our strategic alternatives process, leading to our new capital structure in the form of securitization and have now obtained our target debt-to-EBITDA ratio of approximately five times. Since implementing the securitization, this July, we've returned over $190 million to shareholders through share repurchases. By the time and resources devoted to implementing these structural changes, the team remains focused on driving performance across the system of Jack in the Box restaurant.

In 2019, we achieved our ninth consecutive year of same-store sales growth with the strongest performance since 2015. And as we look to 2020 and beyond, we plan to build on these achievements. Team and I are focused on the long-term growth of the Jack in the Box brand through same-store sales and net new units. For same-store sales, we are encouraged by our performance improvement throughout the year, especially as it pertains to product innovation, compelling offers and operational execution. And we know there is a lot more room to grow in these areas.

In fact, just this week, we launched compelling new LTOs in the form of value bundles and add-ons. Continuing our strategy of using bundles to appeal to value-oriented guests, we launched a White Cheddar Cheeseburger Combo.

To capitalize on past success with credible snacks and sides such as sauced and loaded, we just launched our $3 Mini Munchies, which featured guest favorites such as onion rings and curly fries, as well as the return of mozzarella sticks. This promotion provides value to those seeking it and a nice add-on opportunity to support average check. With Feast Breakfast, top of mind, we've introduced a new Breakfast Jack featuring chicken with the offer to $3. This innovative new breakfast sandwich allows us to capitalize on the growing success of chicken, while remaining relevant in the breakfast daypart. As we look to future quarters, we are excited about the addition of a new menu item that will reestablish everyday value that we lost, when we raised the price ceiling of our popular two for $0.99 taco offering.

While these compelling menu additions and promotions bring guests into our restaurants, our single largest focus for 2020 is improving the guest experience. As I mentioned on previous calls, our VP of Operations Services and Field Performance Support, Shannon McKinney, and his team, have really taken a fresh look at our operation.

Having made significant speed improvements at other brands, he and his team have already identified minor equipment adjustments such as retrofitting our holding cabinets to preserve the temperature and quality longer, and other back-of-house changes such as simplifying build logic to build sandwiches more consistently, both of which will remove complexity in the restaurant and improve the speed of service