Jack in the Box Inc. (NASDAQ:JACK) Q4 2019 Earnings Conference Call - Final Transcript
Nov 21, 2019 • 11:30 am ET
Our first question is from Brian Bittner with Oppenheimer. Sir, your line is open.
Thanks, good morning.
Question on the same-store sales guidance for 2020. Could you provide us with how you're thinking about the cadence of comps throughout the year? Obviously, your first half faces a lot different comparison than your second half and I have a follow up.
Brian, it's Lance. Good morning.
I'll start with this one and let Lenny jump in, if he'd like. So, really we're going to be focused on our long-term guidance and our annual guidance only. So, we're going to say, it's 1.5% to 3%. We're not going to go into a lot of details as to what that looks like. Clearly the compares are a little bit easier in the first half of the year than they are in the second half of the year, but as far as actually giving cadence beyond that, we feel like giving quarter to quarter guidance or kind of giving you a cadence, whether takeawaying[Phonetic] from the long-term way or the other way[Phonetic], we're trying to look at running the business.
Okay. And on the acceleration in unit growth, both openings and improved closures, Lenny is this the product of just naturally what happens post-refranchising as franchisees still want to grow or is there any changes with how they're thinking about the unit economics and the opportunity that's actually driving this unit acceleration? Any more color on how this is showing up, appreciate that.
I think that it is the natural sort of evolution, when you have gone through a lot of structural changes and also had a lot of franchisees investing capital to buy existing units. But now that, that effort is completed some of their capital go towards new units, and we think there is a lot more we can do. And so, the teams are focused on how to continue to drive or accelerate growth into the future, some of Lance talked about, and some of the work that's being done by Shannon and team around operational simplicity as well as our development group on building sites efficiently, I think, will also enhance the new unit growth rate over time.
Our next question comes from Gregory Francfort with Bank of America. Your line is open.
Hey guys, thanks for the question.
It seems like there has been a bit more focus on franchise or franchisee relationships recently. And you talked -- some of your comments on cost pressure and margins being down a bit this year suggests maybe there is a little bit of more pressure on franchisee cash flow. But that's clearly not Jack-specific, that's industry-based. How do you think this plays out and what guidance are you giving franchisees in terms of an approach to pricing that might be different or an approach to investment and equipment that might be different, how are you thinking about that going forward? Thanks.
We actually meet with our franchisees just