Jack in the Box Inc. (NASDAQ:JACK) Q1 2024 Earnings Call Transcript

And the last point is we’ve tested a value menu that we feel really good about that we will roll out throughout this year. And it had — a revised Jack deals menu that we think can have some strong performance. So feel good there. And then Del on its own with the things we’re doing at Del, we feel really good about what’s happening with our menu redesign. We’ve seen both sales and margin improvement in our early tests. We still have some more time with those tests to solidify it. And then as we’ve done at Jack, we’ll implement our hook and build strategy because we already know we get credit for value at Del. Now it’s how do we bring people in and then build them into a more attached rate.

Brian Bittner: Thanks, Darin.

Operator: Our next question comes from a line of Sara Senatore with Bank of America. Please go ahead.

Sara Senatore: Great. Thank you. A follow up on some of your comments about the consumer and what you’re doing to reengage the value guests. I guess on Jack in the Box, could you talk about the dayparts like the breakfast daypart is there softness there and that’s why you have to sort of reinvest a little bit more, it’s just more competitive. And then you mentioned that burgers I think were a strength in the quarter. So do you have sharper price points there or was the industry stronger? I’m trying to tease out how much you think is kind of industry and where the consumer is versus what you think you can — is it within your control?

Darin Harris: Yeah. I think a lot of what we’re seeing with breakfast is consumer. And we’ve got to make sure that we have a very competitive plan. We also know that when we market to the consumer for breakfast that we see it benefit our business. So we’ll make sure that’s a part of our marketing calendar. We also know that we will bring back some items that we took off the menu that we thought were beneficial to margin and speed, but we found it was too much of a headwind to sale. So we’ll bring back some of the items, not all. And so again, with breakfast, I think it’s one of the more competitive areas right now that we have to make sure we’re competing heavily in and having the right offerings. So I think that’s one that we have to lean into and be more aggressive.

With LTOs, like we’ve just introduced a new French Toast Stick with a cinnamon churro flavor and then our Mini Cinnis that performed well. And then as it relates to burgers, I think for the quarter, it was more about a difference in what we promoted last year was more of a chicken focus versus burger focus. So that’s more of why we had stronger performance out of our burgers this quarter versus last year at this time. And then also, Smashed Jack, which we’ve talked about, it more than outperformed our expectations. And so we’re excited about the launch of Smashed Jack in March.

Sara Senatore: Thank you.

Operator: Our next question comes from the line of Alton Stump with Loop Capital. Please go ahead.

Alton Stump: Great. Thank you. Good afternoon. I just want to ask Darin, as you think about the late night business specifically, this doesn’t — of course, shatter from some of your peers that are trying to get into late night, but clearly that’s not a daypart that anybody can establish overnight. Sorry for the pun. But are you seeing any competition? You guys clearly have outpaced, obviously, other dayparts here for quite some time in your late night business. And just overall, are you seeing any signs of that slowing down at all? Or are you continuing to gain share, do you think, particularly in that daypart?

Darin Harris: We’re very aware of what the competition is doing, and we want to make sure that we continue to own late night, which we’ve done for years. And so we’re seeing hours of operation benefiting still some of our regions. We’re seeing transactions positive year-over-year for the sixth straight quarter at late night. And our Munchie Meals were a very solid contributor to Q1. And so I think we have the right offerings at the right time. And so we know that the competition wants to challenge us, and so we’ll be ready for it through innovation and other marketing opportunities that we see available at late night.

Alton Stump: Got it. Great. Thanks so much. I’ll hop back into the queue.

Operator: Our next question comes from the line of Dennis Geiger with UBS. Please go ahead.