Jack in the Box Inc. (NASDAQ:JACK) Q1 2023 Earnings Call Transcript

Lauren Silberman: Great, thank you. If I could just ask a quick follow up on the comp side. Can you expand on what you’re seeing across the different consumer cohorts? So low-end, high-end in the middle income consumer. Thank you.

Darin Harris: Yes. On a two-year basis we’re seeing dramatic expansion across all deciles from our top to our bottom. Our two best performing we were not are the higher income and the lower income. So on a two-year stack, we’re seeing those two be the best performance, on a one-year stack the middle €“ every single, I mean on both one and two, every single category is growing like the performance of our business.

Lauren Silberman: Thank you very much.

Operator: We’ll take our next question from Gregory Francfort with Guggenheim Securities.

Gregory Francfort: Hey, I just wanted to ask about some of the service improvements that you’re seeing. Like, I guess just what inning do you think we’re in terms of this playing out from a service level, and what do you think are the kind of blocking and tackling biggest pieces that you’ve put in place that are having an impact on service and sale? Thanks.

Darin Harris: Yes, I think we’re probably, if I was to kind of try to put an inning on it, is I love baseball, you know, that we’ll probably in the third inning. And when I say that is our team over the last, 12 months to 18 months has been focused on a few key areas. First and foremost, we’ve mentioned training and certifying our, well, first staffing and training. Staff are restaurants train us so our team can take care of our guests, and that’ll ultimately lead in lower alerts that we’re seeing in speed of service improvement. The second thing is, we’ve enhanced the way that we engage our franchisees and our company restaurants on standards and execution of our standards. And we look at root cause versus just measuring, did you meet the standard or not?

So, we’re diving into what are the things, the behaviors that cause the outcomes and working and coaching our franchisees to improve them. So, we’re still at inning three. We think there’s a lot of upside and, but the good news is, we’re seeing speed improve. We’re seeing our alerts go down. Our guest scores are going up from a brand experience standpoint, and we’re consulting our franchisees on how to execute against that.

Operator: And we’ll take our next question from Brian Mullan with Deutsche Bank.

Brian Mullan: Thank you. Question on the Del Taco refranchising process. Good to see a transaction get done in the quarter, and from the prepared remarks it sounds like you expect some more activity to take place this fiscal year. Darin just for clarification, has something changed since ICR when the thought was this might take three years to sell 120 units, and even then you weren’t going to be all the way done? I’m just €“ is there a scenario where this goes a little faster or you get a little more done than what you might have thought a few months ago? Just looking for your current thinking would be great.

Darin Harris: Yes. So on the refranchising strategy, as you know, we’ve been, yes, taking our time to make sure that we can recoup some margin, execute accordingly. We’ve had robust interest in Del Taco from both outside of our existing Jack franchisees outside the Del Taco system, but also within. And so a couple things that we’ve done. We’ve upped our repurchase amount this quarter, because of the one transaction as we said, we would at ICR, we’ll use proceeds to for share repurchases. We also believe that we have offers on every single market. We have viable accretive offers. We’re evaluating those. We will not do all of them, all of the offers we have on the table, but we have some that are viable and we will focus on the best and most decretive and take advantage of that over time.