"Our commitment to reinvent the Jack in the Box brand has generated new products and new initiatives that drove the increase in restaurant sales for the first half of the year," said Linda Lang, chairman and CEO, during a conference call. The addition of "high quality products," she said, has broadened the customer base and raised visits and average checks.
The 100% sirloin burger is among the successful new menu introductions, and more are due. Upgrades to the entree salad side of the menu will be introduced next month.
Media support for the "breakfast is served all day" program has also been successful, Lang said. "Breakfast product sales increased across all day-parts. We are looking at the snack day-part," she told analysts. "Several snack products are in development."
This year to date, 56 Jack in the Box restaurants have been re-imaged, which calls for complete redesign of the dining and common areas, all new finishes, graphics and lighting. Between 150 and 200 units will be re-imaged this year.
The company is devoting between $150 million and $180 million a year to re-imaging. Over the next four to five years, all units will be re-imaged. While this program continues, Jack in the Box is also in the process of selling company-owned units to franchisees. Now 31% of the units are owned by franchisees, the company said, and it expects that pace to continue at a rate of approximately 5% a year.
Same-store sales at Jack in the Box units were up 6.4% in the second quarter on top of a 4%-increase for the same quarter a year ago. Same-store sales at the company's Qdoba Mexican Grill units increased 3.5% in second quarter on top of a 5.6%-increase for the first half of fiscal 2006.
Ten new Jack in the Box units and 13 Qdoba units were added during second quarter. As of April 15, there were 2,098 Jack in the Box restaurants, 57 Quick Stuff convenience stores and 353 Qdoba units.
After hitting a 52-week high of $79.54 a share on Wednesday, May 16, JBX shares opened trading on May 17 at $77.28 a share. This is more than double the 52-week low of $37.85 a share, which occurred on July 13, 2006.
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