Jack In The Box Inc.

good day everyone and welcome to the Jack in the Box Inc second quarter fiscal 2020 earnings conference call today's call is being broadcast live over the Internet a replay of the call will be available on the Jack in the Box corporate website starting today during the question and answer period please use your headset when asking a question please do not ask over a speakerphone At this time, for opening remarks and introductions, I would like to turn the call over to Rachel Webb, Vice President of Investor Relations and Strategic Analysis for Jack in the Box. Please go ahead.

Thank you, Cheryl, and good morning, everyone. Joining me on the call today are Chairman and CEO Lenny Kama and Executive Vice President and CFO Lance Tucker. In our comments this morning, per share amounts refer to diluted earnings per share. We will refer to non-GAAP items throughout today's call, including operating earnings per share, adjusted EBITDA, as well as restaurant level margin and franchise level margin. Please refer to the non-GAAP reconciliations provided in yesterday's earnings release. Following today's presentation, we will take questions from the financial community. Please be advised that during the course of our presentation and question and answer session today, we may make forward-looking statements that reflect management's expectations for the future, which are based on current information. And while management will provide current thinking on this call around the potential impacts of COVID-19 on our business, given the unprecedented nature of this pandemic and the rapidly changing environment, any forward-looking statements should be considered with this elevated level of uncertainty. Actual results may differ materially from these expectations based on risks to the business. The safe harbor statement in yesterday's news release and the cautionary statement in the company's most recent Form 10-K are considered a part of this conference call. Material risk factors, as well as information relating to company operations, are detailed in our most recent 10-K, 10-Q, and other public documents filed with the SEC. These documents are available on the investor section of our website at www.jackinthebox.com. A couple of calendar items to note this morning. Jack in the Box Management will be attending Oppenheimer's Consumer Conference virtually on June 16th. Our third quarter ends on Sunday, July 5th, and we tentatively plan to announce results on Wednesday, August 5th after market close. Our conference call is tentatively scheduled to be held at 8.30 a.m. Pacific time on Thursday, August 6th. And with that, I'll turn the call over to Lenny.

Thank you, Rachel, and good morning. I'd first like to take a moment to express my heartfelt thanks to our restaurant team members for keeping everyone's safety a top priority as we provide for the needs of our guests and first responders. I'd also like to thank our corporate employees, franchisees, and suppliers for their partnership, flexibility, and ingenuity during these unprecedented times. It has truly been remarkable to see the way the brand has rallied to meet the changing needs of our consumers. Sales have rebounded to positive for the first four weeks of quarter three, improving each week to most recently positive eight plus percent for the week ending May 10th. Based on these results, I would describe our outlook going forward as cautiously optimistic, and we will continue with an approach that will be careful and conservative. Lance will share more on this momentarily, but as I contemplate the next chapter for Jack in the Box, it gives me great peace to know that sales and cash flow remain robust despite the challenges brought on by the coronavirus. Taking a look at quarter two, and as we outlined in our release in April, our business was on a positive sales trajectory in the second quarter, averaging over 5% versus prior year for the weeks preceding the impact of the coronavirus. This was on track to be our strongest quarter since quarter three of 2015, driven by the strong performance of our newest menu item, Tiny Tacos. As I've shared on previous calls, Tiny Tacos is intended to restore some of the value-related equity we lost when we raised the price of our iconic two for 99 cent tacos to $1.19 a few years back. Although it is still too early to determine the staying power of our new Tiny Taco offering, we are seeing a great consumer response that is not only showing up in our Tiny Taco sales, but is also helping to bring attention to the entire taco category. Tiny Tacos not only drove transactions, bringing back some of our last users, but also bolstered check sizes as they're frequently added on to guests' orders. COVID-19 had a significant impact on our operating results in the second quarter, and Lance will recap this in a moment. Before we get to that, I'll briefly mention some of the changes in consumer behavior we are seeing in our business today. First, consumers are utilizing delivery and our mobile app more than ever. Delivery sales have more than doubled in the quarter, and we are experiencing record high usage of our mobile app, with active users doubling since the start of the pandemic. As a reminder, over 95% of our restaurants are covered by at least one of the four major delivery providers, with 80% utilizing at least three of the major providers. Second, occasions have shifted away from the traditional breakfast day part, with consumers no longer commuting to work. But since we offer anything on the menu any time of day, we are seeing plenty of breakfast items selling later in the day. and we believe this is one of the positive factors contributing to our sales at this time. These shifts in consumer behavior have led to a significant increase in our check sizes, as consumers are now placing larger orders, typically for multiple people. I want to thank the Jack in the Box team for their agility and rapid response to these changing trends. Within the first two weeks in March, restaurants swiftly moved to a new operating model to facilitate drive-through and take-out only. The corporate team shifted to working from home, and our supply chain ensured restaurants were all receiving masks, gloves, and sanitizer, while also making the appropriate adjustments to reduce supply risks. I also want to thank our marketing team for pivoting our menu offering to address current consumer needs for indulgent food that travels well and meals that provide great overall value. Our $4.99 spicy popcorn chicken has hit the mark by ensuring great value, portability, taste, and temperature in a way that lends itself to delivery, takeout, and drive-through. Our tiny tacos are equally portable in a popular takeout box with high marks on value for the money and craveability. We continue to generate success with our price-pointed bundles, such as the $4.99 triple bonus jack. which offered a successful upsell option to four patties. This upsell option is not only easy for our crews to execute, it also supports the profitability of these promotions for us and our franchisees. With major sporting events and concerts canceled and consumers commuting less, the team quickly shifted advertising both in placement and in messaging. We shifted media from events and billboards to streaming entertainment and digital content to help meet consumers where they are. The team also launched campaigns such as hashtag Stay in the Box to promote sheltering in place and developed ads to communicate our dedication to safely staying open to serve the community through delivery, drive-through, and our mobile app. I believe all of these changes have allowed us to fare much better than we initially expected. We are feeling bullish about our current trajectory, especially in light of lapping our strongest quarter from last year. I'll now turn the call over to Lance for a closer look at our second quarter results and current trends. Lance?