Jack in the Box tops UNH franchise index
The Jack in the Box chain has taken the top spot in the latest Rosenberg Center Franchise 50 Index report issued by the University of New Hampshire, as its stock increased by more than a third in its market value in the third quarter of 2006.
“In early August, Jack in the Box reported strong financial results for the past quarter, with sales growing over 10 percent and earnings exceeding expectations. Jack in the Box further pleased investors by raising its profit outlook for 2006. In September, it completed the sale of 25 company-owned restaurants in Hawaii to franchise operator Scanlan Management LLC,” according to the report issued by The William Rosenberg International Center of Franchising at the University of New Hampshire Whittemore School of Business and Economics.
The report also noted that the Jack in the Box stock price was boosted by an announcement by McDonald’s of strong same-store sales in September. “Fast-food stock investors had been worried that the slowdown in the casual-dining restaurant sector would spread to the fast food sector. McDonald’s announcement dispelled this concern and helped the whole fast-food sector,” the report said.
As a whole, the Rosenberg Center Franchise 50 Index – which tracks the market performance of the top 50 U.S. public franchisors — rose 2 percent in the third quarter of 2006, amid a broad stock market rebound with the S&P 500 Index jumping 5.2 percent. The index is up 3.9 percent year-to-date in 2006, and up 60.9 percent since January 2000.
Choice Hotel International was the largest loser, with a drop in market value of 31.9 percent. The best performer of the index last quarter, Choice Hotel International gave back most of its gains as it lost almost 32 percent of its market value this quarter. It dropped 23 percent of its value the day after it announced financial results for last quarter.
“Even more disappointing to investors was the company’s outlook for next quarter’s profits,” the report said.
The full Rosenberg Center Franchise 50 Index™ third quarter report is available at http://www.unh.edu/news/docs/F50Q306.pdf. — JEFF FEINGOLD