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

Chris Carril: Hi. Thanks. So on the restaurant level margins and the outlook for the year, can you update us on where you expect commodity inflation to kind of trend over the balance of the year? I think you mentioned commodity inflation above 15% for Jack and 17% for Del Taco in the 1Q that’s versus your consolidated inflation guide. I believe it was 9% to 11% before. So any update on what you think about the cadence of inflationary pressures from here?

Dawn Hooper: Yes, thanks for the question. We still are holding our November guidance of 9% to 11%. However, as you would expect, we do expect that to moderate as the

Chris Carril: Okay. Got it. And then on the evolving market impact on Jack margins, do you still expect that to be 125 bps that you noted last quarter? It sounds like the impact on the 1Q was similar to that guidance, but curious if the outlook for the balance of the year remains the same. Thank you.

Dawn Hooper: Yes. And 125 basis point still holds and is pretty much what we saw in Q1.

Chris Carril: Okay, thanks.

Operator: We’ll take our next question from John Tower with Citibank.

John Tower: Great. Thanks for taking the question. Just most answered, I already just a couple lingering here. First complicated during a quarter, I’m assuming probably followed the trajectory the rest of the industry, but any reason to believe that, it might not have peaked say in January?

Darin Harris: We continue to see same-store sales momentum in the quarter two.

Dawn Hooper: And during Q1, we did see accelerate throughout the quarter.

John Tower: Great, thanks. And then just Darin, I was hoping to get your input on the AB 1228 being proposed in California. It seems like that market is just constantly, I’m seeing forces work against the fast food industry. And I was curious to get your, your thoughts on whether or not this bill makes its way through the legislation and potentially into law. We see it kind of move down the same path as the fast act that punted to 2024 earlier this year.

Darin Harris: Yes, I don’t at this point, I think we’re still evaluating, what it means and trying to determine, how we react.

John Tower: Okay. Thank you.

Operator: And that concludes the question-and-answer session. I’d like to turn the call back over to Darin Harris for any additional or closing remarks.

Darin Harris: Again, we truly appreciate the questions and the opportunity to have a chance to speak with you. Again, we’re excited about our performance and across both Del and Jack, when we focus on our people and our culture and then have a clear strategy, we continue to see it build into the results we want for our future. Thank you again.

Operator: And that concludes today’s presentation. Thank you for your participation and you may now disconnect.