San Diego, CA–(Business Wire)– Jack in the Box Incorporated, introduced its multifaceted “JACK on Track” plan, which includes a comprehensive series of actions to improve long-term financial performance across its restaurant system, strengthen its balance sheet and demonstrate its commitment to running an asset-light business model — which will position the company for sustainable growth in the coming years.
As part of the plan, the San Diego-based company has engaged BofA Securities to assist in exploring strategic alternatives for the Del Taco brand, including a possible divestiture of the business.
“In my time thus far as CEO, I have worked quickly with our teams to conclude that Jack in the Box operates at its best, and maximizes shareholder return potential, within a simplified and asset-light business model,” said Lance Tucker, who was named Chief Executive Officer at Jack in the Box on March 31. “Our actions today focus on three main areas: addressing our balance sheet to accelerate cash flow and pay down debt, while preserving growth-oriented capital investments related to technology and restaurant reimage; closing underperforming restaurants to position ourselves for consistent net unit growth and competitive unit economics; and, an overall return to simplicity for the Jack in the Box business model and investor story.”
Jack in the Box will accelerate cash flow by selling a select number of owned real estate holdings, and direct proceeds towards debt paydown and leverage reduction.
The company will discontinue its dividend effective immediately and direct a majority of those funds toward debt paydown and leverage reduction, with the remainder directed toward share repurchases.
They will reduce its spend on company-owned new unit restaurant development beginning in 2026, but will continue with planned improvements of its current restaurant base by restaurant reimages. The company will continue to invest in its evolving technologies and digital capabilities, enabling significant growth through its digital sales channels.
Jack in the Box will implement a block closure program, which is projected to result in the closure of approximately 150 to 200 underperforming restaurants — a majority of which have been in the system for over three decades.
The program will consist of approximately 80-120 restaurant closures between now and December 31, 2025, with the remaining underperforming restaurants closing thereafter based upon respective franchise agreement termination dates. It does not include the expected 1.5% to 2.0% of system unit closures for Fiscal Year 2025, and an ongoing annual closure rate thereafter of approximately 1% of system units beginning in Fiscal Year 2026.
Upon completion of the program, Jack in the Box expects to deliver consistent, positive net unit growth, helped by the strong performance of new markets and tremendous whitespace opportunities.
The guidance and underlying assumptions reflect the company’s current expectations for the fiscal year ending September 28.
Jack in the Box has also announced select preliminary financial results for the fiscal year second quarter ended April 13:
Jack in the Box same-store sales of -4.4%
Del Taco same-store sales of -3.6%
Adjusted EBITDA of $66-$68 million
5 restaurant openings, 12 restaurant closures for Jack in the Box
6 restaurant openings, 4 restaurant closures for Del Taco
The preliminary second-quarter results are estimates based on information available to management as of this release and may change as the company completes its standard quarter- and year-end closing procedures. Management could identify items that require adjustments to the financial data, and those changes may be significant. Jack in the Box does not plan to update these preliminary figures before releasing its final second-quarter earnings and holding its conference call, both scheduled for May 14.
