Buttery Jack burger a big win for Jack in the Box

by Eric Schroeder
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The Buttery Jack burger delivered on Jack in the Box's goal of improving its hamburgers.

SAN DIEGO — The launch of the Buttery Jack burger at the end of January has been a win-win for San Diego-based restaurant chain Jack in the Box.

First, the burger, which features a garlic herb butter that is melted onto the patty, delivered on Jack in the Box’s goal of improving its hamburgers.

“I’ve been here for 14 years, and in that time frame, we’ve never had a product as successful as Buttery Jack,” Lenny Comma, chairman and chief executive officer, said during a May 14 conference call with analysts. “So it’s by far the most successful thing that most of the folks working in the brand today have experienced. And when you look at the work that went into it, what’s nice about what we are experiencing is, we expect similar quality cues and changes across the core menu, coming into next year.”

The Buttery Jack is available in two varieties: classic and bacon and Swiss. The Classic Buttery Jack includes a ¼-lb beef patty, provolone cheese, tomato sauce, lettuce and tomato. The Bacon and Swiss Buttery features a ¼-lb beef patty, hickory-smoked bacon, Swiss cheese, and bacon mayo.

Mr. Comma said the new Buttery Jack burgers have helped drive the lunch and dinner day parts, two areas that haven’t been drivers of success for the restaurant chain in recent years.

The burger also hits on Jack in the Box’s strategy of being a little different.

“We said long ago that essentially, Jack in the Box has to be a differentiated, quality-driven brand,” Mr. Comma explained. “Because we’re not big enough to play in the space of the value driver in the industry. And I think the good thing is that the consumer wants and believes that we are more of a quality-driven brand, differentiation, our quirkiness of our advertising, the weirdness of our menu. Keep in mind, tacos is still a huge seller, and we’re a burger company.

“So we’ve had a history of being able to put things out there that are a just a little different than everyone else, and the consumer has come to expect it. When you look at what some of our competitors are doing, they’re trying to play in a space that is probably not an equity that they currently have, and will take, I believe, a very long time for them to establish that equity. So I’m not saying whether it’s right or wrong. Those are things that the competitors have to figure out for themselves. But what I can say is, our strategy won’t change, because we know the space that we play in. And essentially, we’ve been finding success there, and there’s no reason for us to believe that’s going to change.”

Mr. Comma said Jack in the Box historically has responded well to competition in the marketplace, and he doesn’t expect that to change going forward.

“We’ll stick to our strategy, but as folks try to encroach on our space, we will certainly have a response,” he said. “And that’s something that you can anticipate, as well. So no strategy change. And if we’re going to throw some punches back in the other direction, it’s going to be from the basis of what our strengths are. And you will see us compete that way, going forward.”

Net income at Jack in the Box in the second quarter ended April 12 was $23,005,000, equal to 61c per share on the common stock, up 46% from $15,801,000, or 38c per share, in the same period a year ago. Revenues increased 5% to $358,122,000 from $340,870,000.

For the six months ended April 12, net income was $58,840,000, or $1.53 per share, up 22% from $48,087,000, or $1.14 per share, in the same period a year ago. Revenues totaled $826,743,000, up 4.5% from $790,952,000.
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