SAN DIEGO--(BUSINESS WIRE)--Jun. 17, 2013--
Jack in the Box Inc. (NASDAQ: JACK) today announced that it has
substantially completed its previously disclosed review of market
performance for its Qdoba Mexican Grill® brand. As a result of this
comprehensive review, the company plans to close 67 of its
company-operated Qdoba restaurants by the end of fiscal 2013, which ends
Sept. 29, 2013. As of the end of the second quarter, Qdoba’s system
included 647 restaurants, of which 340 were company-operated. The
decision to close the restaurants followed a comprehensive unit-level
analysis of sales, cash flows and other key performance metrics, as well
as site locations, brand awareness and lease status.
According to Tim Casey, who joined Qdoba as president in March, “After a
comprehensive review and an in-depth analysis of our real estate
portfolio, we believe we can significantly improve Qdoba’s performance
and continue to grow the brand. By closing these locations and
optimizing our company footprint, we can be more effective in focusing
our advertising and marketing resources to support existing and planned
restaurants in our core markets where we have high levels of brand
awareness. We also expect to provide an even better dining experience
for our guests as our operations teams concentrate their efforts on
supporting these markets.”
Linda Lang, chairman and chief executive officer of Jack in the Box
Inc., said, “These closures are expected to have a positive impact on
the financial performance of our Qdoba brand, resulting in higher future
earnings, average unit volumes, restaurant operating margins, cash flow
and return on invested capital.
“We believe in the tremendous potential of the Qdoba brand, and we plan
to continue expanding in North America, with 70 to 75 new locations
expected to open system-wide in fiscal 2013, including approximately 40
company locations. In 2014, we expect 60 to 70 new Qdoba restaurants to
open, approximately half of which will be company locations.”
The company currently estimates it will incur pre-tax charges during
fiscal 2013 of approximately $40 million, including an estimated $28
million in non-cash impairment charges and approximately $12 million in
charges related to cash lease obligations and employee severance costs.
The company will update the estimated pre-tax charges, if necessary,
related to the restaurant closures when it reports its third-quarter
operating results in August.
The restaurant closures will be discussed when Jack in the Box Inc.
management presents at two upcoming investment conferences: Jefferies
Global Consumer Conference on June 18 and Oppenheimer Annual Consumer
Conference on June 26. Live webcasts of both presentations can be
accessed via the Jack in the Box Inc. website at http://investors.jackinthebox.com.
About Jack in the Box Inc.
Jack in the Box Inc. (NASDAQ: JACK), based in San Diego, is a restaurant
company that operates and franchises Jack in the Box® restaurants, one
of the nation’s largest hamburger chains, with more than 2,200
restaurants in 21 states. Additionally, through a wholly owned
subsidiary the company operates and franchises Qdoba Mexican Grill®, a
leader in fast-casual dining, with more than 600 restaurants in 45
states, the District of Columbia and Canada. For more information on
Jack in the Box and Qdoba, including franchising opportunities, visit www.jackinthebox.com
Safe harbor statement
This press release contains forward-looking statements, including
statements regarding the plan to close 67 underperforming restaurants,
including the estimated timing and costs, the impact on Qdoba’s
operations, and the future benefits to the company’s results of
operations. Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the company’s actual
results, performance or achievements to be materially different than
expressed or implied by these forward-looking statements. In particular,
the company is unable to predict the ultimate costs associated with the
closings, the timing of payments made and received, the results of final
negotiations with landlords, the impact of the closings on ongoing
operations, any tax benefits from the closings, and the future benefits
to the company’s earnings, average unit volumes, restaurant operating
margins, cash flow and return on invested capital. For other factors to
consider, see the company’s filings with the Securities and Exchange
Commission, including its Annual Report on Form 10-K and its quarterly
reports on Form 10-Q. Except as may be required by law, the company
undertakes no obligation to update publicly or revise any
forward-looking statements to reflect any future events or circumstances.
Source: Jack in the Box Inc.
Jack in the Box Inc.