Jack In The Box CEO: No Qdoba Spin-Off Yet

Today.Reuters:

Jack in the Box Inc. has no immediate plans to spin off its fast-growing Qdoba Mexican Grill chain, but the company would consider such a move in the future, Chairman and Chief Executive Linda Lang said on Monday.

“We always assess the options for Qdoba but at this point in time we’ve said no, we have no plans to spin it off,” Lang said in her first interview since becoming CEO of the hamburger chain last year. “We would be open to it down the road.”
Earlier this year, rival McDonald’s Corp.spun off its Chipotle. Mexican-style chain and Wendy’s International Inc.took its Tim Horton’s coffee shop chain public. Shares in both chains have soared since their IPOs, leading to market speculation that Jack in the Box might make a similar move with Qdoba.

But Lang pointed to the fact that 280-unit Qdoba was still far smaller than Chipotle, which has more than 500 locations.

“There’s still value in keeping it under Jack in the Box corporate,” she said.

Jack in the Box shares have gained 18 percent this year and trade at roughly 15 times analysts’ average fiscal 2007 earnings estimate. That’s below the multiple of 22.5 times earnings commanded by Carl’s Jr. and Hardee’s parent CKE Restaurants Inc. but above McDonald’s shares’ 14.

Jack in the Box shares closed at $41.25 on the New York Stock Exchange on Monday.