Quick-service brand sees targeted loyalty offering as customer experience enhancement
Jack in the Box Inc. will release a redesigned version of its smartphone app in September as it works to drive digital growth from 14% to 20% of sales, executives said Tuesday.
The San Diego, Calif.-based quick-service company, parent to the Del Taco brand as well, released earnings for the third quarter ended July 7, and executives spoke with analysts.
“At the start of next month, we will be releasing a redesigned version of our Jack app, which will provide an enhanced experience for our guests, setting the foundation for personalization and targeted loyalty offerings,” said Darin Harris, Jack in the Box CEO.
The company is working to move customers to its first-party loyalty app, he said.
“As we continue to enhance our marketing and restaurant technology stack, it's important that I provide an update on the progress of our new point of sale rollout at Jack with nearly 100 restaurants completed and a plan to be at approximately 450 by the end of 2024 and fully deployed in 2025,” Harris said.
“This POS system includes kiosk capability and will support seamless loyalty experience,” he said, “while unlocking future operational innovation, including enhanced inventory and labor management, along with automation AI to reduce costs and improve speed.”
Jack in the Box also is planning a push into the new market of Chicago in the year ahead, Harris said.
‘We plan to rapidly enter this key market with a plan to open up to 10 company locations in fiscal year 2025, with an eye on partnering with franchisees to continue to expand in the market with significant growth potential,” he said. “This, in addition to our entry into Florida in 2025, sets us up for an exciting year for the brand and our team is ready to make it happen.”
Brian Scott, Jack in the Box’s chief financial officer, said the company was dealing with California’s fast-food wage law, which went into effect April 1.
“This was the first full quarter of operating under the increased minimum wage law in California and we are proud of how our teams executed through this change, using very strategic price increases to counter the higher labor costs,” Scott said.
“For example, for Jack in the Box company-owned restaurants, which are predominantly in California, same-store sales performance was better than an all but one other market,” Scott said. “I'll also note that Del Taco had a very similar result with California being one of their top markets in the quarter.”
Labor costs were 32.4% of company on sales, reflecting a 200 basis points increase from prior year because of wage increases to comply with California's new minimum wage law, Scott said.
For the third quarter ended July 7, Jack in the Box swung to a net loss of $122.3 million, or $6.29 a share, on a goodwill impairment charge at Del Taco, from a profit of $29.2 million, or $1.41 a share, in the same period a year ago. Revenues fell to $369.2 million from $396.9 in the same period last year.
Jack in the Box posted a same-store sales decline of 2.2%, and Del Taco’s same-store sales were down 3.9% in the period.
Jack in the Box has 2,195 units across 23 states, and Del Taco has 597 restaurants across 17 states.
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