Jack in the Box 2Q17 Earnings Call Notes

Lenny Comma – Chairman and Chief Executive Officer

We are beginning to see some inflation

“after several quarters of lower commodity costs, we are beginning to see some inflation. We anticipate this will curtail some of the hypercompetitive discounting we have seen in recent quarters.”

Incremental lift from DoorDash partnership

“We have seen incremental lift in sales and markets served by DoorDash, which is delivering Jack in the Box food from approximately 37% of our system. We are also negotiating with other providers to expand delivery and have already begun tests with some of these vendors.”

Seeing worse performance at lower price points

“Yes. So if you look at the traffic below the $5 price point is negative. And when you look at the traffic above the $5 price point it’s essentially flat. So yes, we are seeing a much healthier business above the $5 price point and it becomes very obvious to that all the pressure is on the bottom side of the menu. In addition to that we also see the brands with positive same-store sales are starting to see margin pressures.”

The consumer is redefining convenience and we are in the convenience business

“The consumer is really redefining convenience and we are in the convenience business. So we are going to need to do some things to respond to that which we have already either done or at least begun to test. The consumer is also demanding lower price points in the current – in the current environment. So we need to do some things to respond to that. And then long-term, we just think that our brand is going to lose its relevance, if we don’t remodel our sites and improve our service that leads to this place where it’s sort of frictionless, which is again becoming sort of one of the redefinitions of service going forward. So I think, we need to actually invest in all of those things, not just value.”