Jack In The Box (NASDAQ: JACK) shares surged 9.12% in after-hours trading on Tuesday following the release of the company's strong financial results for the first quarter of fiscal 2025.
The fast-food chain reported revenue of $469.4 million for the quarter ended January 19, 2025, down 3.7% from the prior-year period. However, the company delivered better-than-expected earnings, with diluted earnings per share (EPS) of $1.75 and adjusted EPS of $1.92, surpassing analyst estimates.
The company's core Jack In The Box restaurants saw same-store sales increase by 0.4%, driven by higher pricing and improved product mix, offsetting a decline in transactions. Meanwhile, the Del Taco brand experienced a 4.5% drop in same-store sales, impacted by lower transactions and product mix, partially offset by price increases.
Jack In The Box's adjusted EBITDA for the quarter stood at $97.2 million, reflecting a slight decrease from the previous year's figure of $101.8 million. The company attributed the decline in profitability to higher labor costs resulting from implementing California's minimum wage law.
Despite the challenges, Jack In The Box made significant strides in expanding its footprint during the quarter. The company signed development agreements with new franchisees for 10 new Jack In The Box restaurants, including plans to enter the Chicago market. Additionally, the company completed the refranchising of 13 Del Taco restaurants, with a commitment to open 12 new future locations.
Jack In The Box also highlighted its progress in technology and digital transformation, with nearly 1,000 restaurants now equipped with the company's new point-of-sale system, which includes immediate counter kiosk capabilities.
The company's strong financial performance and growth initiatives seem to have resonated with investors, leading to the significant after-hours surge in its stock price. As Jack In The Box continues to execute its expansion plans and navigate the challenges posed by the industry's macro environment, investors will be closely monitoring the company's ability to sustain its momentum and drive long-term shareholder value.
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