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Jack in the Box (JACK)
Q2 2013 Earnings Call
May 16, 2013 11:30 am ET
Carol A. DiRaimo - Vice President of Investor Relations & Corporate Communications
Linda A. Lang - Chairman, Chief Executive Officer and Chairman of Executive Committee
Jerry P. Rebel - Chief Financial Officer, Principal Accounting Officer and Executive Vice President
Leonard A. Comma - President and Chief Operating Officer
Joseph T. Buckley - BofA Merrill Lynch, Research Division
Brian J. Bittner - Oppenheimer & Co. Inc., Research Division
Jeffrey Andrew Bernstein - Barclays Capital, Research Division
Matthew J. DiFrisco - Lazard Capital Markets LLC, Research Division
Alexander Slagle - Jefferies & Company, Inc., Research Division
Keith Siegner - Crédit Suisse AG, Research Division
Larry Miller - RBC Capital Markets, LLC, Research Division
Jeffrey D. Farmer - Wells Fargo Securities, LLC, Research Division
Jake R. Bartlett - Susquehanna Financial Group, LLLP, Research Division
Grant A. Robinson - Robert W. Baird & Co. Incorporated, Research Division
Conrad Lyon - B. Riley Caris, Research Division
Previous Statements by JACK
» Jack in the Box's Management Presents at UBS Global Consumer Conference (Transcript)
» Jack in the Box's Management Presents at 2013 Consumer & Retail Conference (Transcript)
» Jack in the Box Management Discusses Q1 2013 Results - Earnings Call Transcript
At this time, for opening remarks and introductions, I would like to turn the call over to Carol DiRaimo, Vice President of Investor Relations and Corporate Communications for Jack in the Box. Please go ahead.
Carol A. DiRaimo
Thank you, Cathy, and good morning, everyone. Joining me on our call today are our Chairman and CEO, Linda Lang; Executive Vice President and CFO, Jerry Rebel; and President and Chief Operating Officer, Lenny Comma.
During this morning's session, we'll review the company's operating results for the second quarter of fiscal 2013, as well as some of the guidance we issued yesterday for the third quarter and the balance of the year. Following today's presentation, we'll take questions from the financial community.
Please be advised that during the course of our presentation and our question-and-answer session today, we may make forward-looking statements that reflect management's expectations for the future, which are based on current information. Actual results may differ materially from these expectations based on risks to the business.
The Safe Harbor statement in yesterday's news release and the cautionary statement in the company's most recent Form 10-K are considered a part of this conference call. Material risk factors, as well as information relating to company operations, are detailed in our most recent 10-K, 10-Q and other public documents filed with the SEC. These documents are available on the Investors section of our website at www.jackinthebox.com.
A few calendar items to note. Jack in the Box management will be attending the annual B. Riley & Co. Investor Conference in Santa Monica on May 21, and presenting at the Jefferies 2013 Global Consumer Conference in Nantucket in Jun 18, and Oppenheimer's Annual Consumer Conference in Boston on June 26.
Our third quarter ends on July 7, and we tentatively plan to announce results on August 7 after the market close. And our conference call is tentatively scheduled to be held at 8:30 a.m. Pacific Time on August 8.
With that, I'll turn the call over to Linda.
Linda A. Lang
Thank you, Carol, and good morning, everyone. Jack in the Box reported another strong quarter despite the economic headwinds that pressured consumers in January and February. Same-store sales increased 0.9% at company Jack in the Box restaurants, representing our tenth consecutive quarter of year-over-year sales growth. On a 2-year cumulative basis, company same-store sales were up 6.5% and improved by roughly 300 basis points in the last 2 months of the quarter versus the first month.
We saw sales began improving after mid-February as gas prices dropped, tax refunds were processed and wage earners adjusted to higher payroll taxes. We continue to take market share according to NPD data. Our quarter 2 system same-store sales increase of 0.1% at Jack in the Box exceeded that of the QSR sandwich segment by 190 basis points, with the company gap even wider. In fact, on a weekly basis, Jack in the Box outperformed the segment for 11 out of the 12 weeks. We continue to outperform the industry in the month of April, and so far in this quarter, sales are trending about the same as the last 2 months of quarter 2.
Same-store sales in the quarter were positive in all of our major markets, with breakfast and late-night, again, our strongest day parts with the largest year-over-year increases.
Looking at our promotional calendar in the second quarter, we launched our Hot Mess campaign in early February featuring a trio of limited time offerings that leverage social media and the strength of Jack's personality to engage our guests. The campaign was centered on our Hot Mess Burger and also included Hot Mess potato wedges and a Hot Cinnamon Shake. Looking ahead, we'll continue to promote a mix of new products and value offerings, along with multifaceted promotional campaigns like Hot Mess.
During the quarter, we enhanced our Voice of the Guest program at Jack in the Box. The new program provides significantly more diagnostic information and actionable feedback that will further enhance our ability to improve overall guest satisfaction. We attribute our ability to continue growing market share in this challenging environment to the investments we've made over the past few years to enhance our food, service and restaurant facilities. And we believe we have the foundation and catalyst in place to continue driving same-store sales and traffic growth.