Jack In The Box 2015 Annual Report Download - page 28

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Company Restaurant Operations
The following table presents Qdoba company restaurant sales, costs and margin, and restaurant costs and margin as a percentage of the related sales.
Percentages may not add due to rounding (dollars in thousands):



Company restaurant sales
$ 374,338
$ 338,451
$ 293,268
Company restaurant costs:
Food and packaging
114,057
30.5%
102,447
30.3%
88,464
30.2%
Payroll and employee benefits
97,704
26.1%
90,494
26.7%
79,235
27.0%
Occupancy and other
88,742
23.7%
83,428
24.6%
73,093
24.9%
Total company restaurant costs
$ 300,503
80.3%
$ 276,369
81.7%
$ 240,792
82.1%
Restaurant margin
$ 73,835
19.7%
$ 62,082
18.3%
$ 52,476
17.9%
Company restaurant sales increased $35.9 million in 2015 and $45.2 million in 2014 as compared with the respective prior year. In 2015, the increase is
primarily related to growth in AUVs, and to a lesser extent, an increase in the number of company-operated restaurants. In 2014, the increase in restaurant
sales is due to an increase in the average number of Qdoba company-operated restaurants, as well as an increase in AUVs. The following table presents the
approximate impact of these increases on company restaurant sales (in millions):



AUV increase
$ 25.9
$ 9.2
Increase in the average number of restaurants
10.0
36.0
Total increase in company restaurant sales
$ 35.9
$ 45.2
Same-store sales at Qdoba company-operated restaurants increased 8.3% in 2015 and 5.7% in 2014. In 2015, the increase in same-store sales was primarily
driven by the new simplified menu pricing structure, and growth in catering sales. In 2014, the increases were related to favorable product mix, transaction
growth, price increases, higher catering sales and lower discounting. The following table summarizes the change in company-operated same-store sales:



Average check (1)
7.3 %
4.2%
Transactions
(0.1)%
0.7%
Catering
1.1 %
0.8%
Increase in same-store sales
8.3 %
5.7%
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(1) Includes price increases of approximately 0.2% and 1.0% in 2015 and 2014, respectively.
Food and packaging costs as a percentage of company restaurant sales increased to 30.5% in 2015 from 30.3% in 2014, and 30.2% in 2013. In 2015,
higher commodity costs were partially offset by the benefits from the new pricing structure. In 2014, food and packaging costs increased slightly as the
benefits of retail price increases and lower discounting were more than offset by higher commodity costs.
In 2015, commodity costs increased 1.4% at our Qdoba restaurants primarily due to higher costs for beef, partially offset by lower costs for produce, pork
and beans. In the current year, beef costs increased most significantly, by 12%. In 2014, commodity costs increased 1.4% due to higher costs for produce and
pork. For fiscal 2016, we currently expect Qdoba commodity costs to decrease approximately 3% compared with fiscal 2015.
Payroll and employee benefit costs as a percentage of company restaurant sales decreased to 26.1% in 2015 from 26.7% in 2014, and 27.0% in 2013. The
decrease in 2015 is driven primarily by leverage from same-store sales increases and lower levels of incentive compensation, partially offset by increases in
labor staffing. In 2014, the decline primarily relates to leverage from same-store sales increases and a change in our staffing mix in the second quarter of fiscal
2014 that utilizes a more variable labor model, partially offset by higher levels of incentive compensation.
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