Jack in the Box Beats on EPS But GAAP Results Lag

Jack in the Box (Nasdaq: JACK  ) reported earnings on May 15. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended April 14 (Q2), Jack in the Box met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank significantly. Non-GAAP earnings per share increased significantly. GAAP earnings per share shrank significantly.

Gross margins increased, operating margins grew, net margins dropped.

Revenue details
Jack in the Box booked revenue of $355.6 million. The 16 analysts polled by S&P Capital IQ looked for net sales of $359.1 million on the same basis. GAAP reported sales were 30% lower than the prior-year quarter's $506.6 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.33. The 14 earnings estimates compiled by S&P Capital IQ forecast $0.31 per share. Non-GAAP EPS of $0.33 for Q2 were 22% higher than the prior-year quarter's $0.27 per share. GAAP EPS of $0.30 for Q2 were 38% lower than the prior-year quarter's $0.48 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 23.2%, 690 basis points better than the prior-year quarter. Operating margin was 8.3%, 290 basis points better than the prior-year quarter. Net margin was 3.7%, 60 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $369.2 million. On the bottom line, the average EPS estimate is $0.42.

Next year's average estimate for revenue is $1.55 billion. The average EPS estimate is $1.61.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 325 members out of 364 rating the stock outperform, and 39 members rating it underperform. Among 127 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 122 give Jack in the Box a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Jack in the Box is outperform, with an average price target of $36.38.

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