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Jack In The Box Inc (JACK)
NASDAQ:JACK
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Jack In The Box
(NASDAQ:JACK)
50Neutral
Positive Factors
Cost Management
Despite the challenging sales environment, 2Q adjusted EBITDA was guided to exceed estimates, highlighting effective cost management.
Debt Reduction Strategy
Reducing debt by $300M+ over the next 12-18 months should materially improve the equity value.
Earnings Performance
JACK reported adjusted F1Q25 earnings of $1.92, ahead of GS/Visible Alpha Consensus Data estimates of $1.64/$1.69, mainly driven by lower COGS at company stores and lower-than-expected G&A spending.
Negative Factors
Industry Challenges
Management noted seeing industry and traffic pressures like many other peers in the current quarter, and noted QTD trends are currently negative for both Jack and Del Taco.
Sales Performance
Preliminary 2Q same store sales reported a decline of -4.4%, missing the estimate due to lapping a previous campaign and technical issues.
Store Closures
Store closures of 150-200 underperforming restaurants are a difficult but necessary move to improve system unit economics.
Jack In The Box (JACK) vs. S&P 500 (SPY)
Market Cap
$448.39M
Dividend Yield7.41%
Average Volume (3M)1.01M
Price to Earnings (P/E)―
Beta (1Y)0.72
Revenue Growth-6.02%
EPS Growth-136.86%
CountryUS
Employees1,606
SectorConsumer Cyclical
Sector Strength75
IndustryRestaurants
Share Statistics
EPS (TTM)1.20
Shares Outstanding18,879,446
10 Day Avg. Volume868,591
30 Day Avg. Volume1,011,709
Financial Highlights & Ratios
PEG Ratio-7.22
Price to Book (P/B)-0.63
Price to Sales (P/S)0.00
P/FCF Ratio-11.09
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$34.00Price Target Upside54.76% Upside
Rating ConsensusHold
Number of Analyst Covering17
Jack In The Box Business Overview & Revenue Model
Company DescriptionJack in the Box Inc. operates and franchises Jack in the Box quick-service restaurants. As of November 23, 2021, it operated and franchised approximately 2,200 Jack in the Box quick-service restaurants in 21 states and Guam. The company was founded in 1951 and is headquartered in San Diego, California.
How the Company Makes MoneyJack in the Box generates revenue primarily through the operation and franchising of its fast-food restaurants. The company earns money by selling food and beverages directly to customers in its company-owned locations. Additionally, a significant portion of its revenue comes from franchising, where the company collects royalties and fees from franchisees who operate Jack in the Box outlets. These franchise revenues include initial franchise fees, ongoing royalties based on a percentage of sales, and lease income from properties owned by Jack in the Box and leased to franchisees. The company's earnings are also influenced by strategic marketing initiatives, menu innovation, and operational efficiencies, which help drive customer traffic and sales.
Jack In The Box Financial Statement Overview
Summary
Jack In The Box is experiencing financial challenges with declining revenue, decreasing profitability, and cash flow issues, alongside a heavily leveraged balance sheet with negative equity. These factors suggest the company faces significant financial pressure, requiring strategic measures to improve its financial stability and growth prospects.Income Statement
The company has shown a declining revenue trend from $1.692 billion in 2023 to $1.571 billion in TTM (Trailing-Twelve-Months) 2024, indicating challenges in maintaining growth. Net profit margin has turned negative at -2.34% in TTM 2024, compared to 7.73% in 2023, showing a significant drop in profitability. The gross profit margin also decreased from 76.79% in 2023 to 27.70% in TTM 2024. While the EBIT and EBITDA margins remain relatively stable, the overall income statement reflects concerns regarding decreasing revenue and profitability.55
Neutral
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio due to negative stockholders' equity, indicating financial instability. The total liabilities exceed total assets, resulting in a negative equity position. The company's return on equity is not calculable due to negative equity, posing a risk to financial health. Despite steady total assets, the heavy leverage and negative equity position cast doubt on long-term sustainability.40
Negative
Cash Flow
Operating cash flow has significantly decreased from $215 million in 2023 to $68.8 million in TTM 2024, showing a concerning drop in operational efficiency. Free cash flow turned negative in TTM 2024 at -$46.7 million, compared to positive $140.1 million in 2023, indicating a decline in cash generation capability. The operating cash flow to net income ratio is not favorable due to negative net income, further highlighting cash flow challenges.48
Neutral
| Breakdown | ||||
| Sep 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Sep 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.22B | 1.69B | 1.47B | 1.14B | 1.02B | Gross Profit |
| 911.20M | 1.30B | 433.31M | 411.60M | 354.47M | EBIT |
| 31.43M | 278.75M | 248.27M | 289.95M | 179.11M | EBITDA |
| 77.64M | 334.07M | 300.19M | 327.98M | 231.91M | Net Income Common Stockholders |
| -35.32M | 130.83M | 115.78M | 165.75M | 89.76M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 24.75M | 157.65M | 108.89M | 55.35M | 199.66M | Total Assets |
| 2.74B | 3.00B | 2.92B | 1.75B | 1.91B | Total Debt |
| 3.18B | 3.16B | 3.17B | 2.23B | 2.33B | Net Debt |
| 3.16B | 3.01B | 3.06B | 2.18B | 2.13B | Total Liabilities |
| 3.59B | 3.72B | 3.66B | 2.57B | 2.70B | Stockholders Equity |
| -851.80M | -718.33M | -736.19M | -817.88M | -793.36M |
| Cash Flow | Free Cash Flow | |||
| 0.00 | 140.05M | 116.41M | 160.11M | 124.00M | Operating Cash Flow |
| 0.00 | 215.01M | 162.88M | 201.12M | 143.53M | Investing Cash Flow |
| 0.00 | 42.22M | -578.59M | -20.93M | 29.12M | Financing Cash Flow |
| 0.00 | -207.36M | 478.18M | -343.55M | -87.29M |
Jack In The Box Technical Analysis
Negative
21.97
Price Trends
27.02
Negative
32.84
Negative
39.60
Negative
Market Momentum
-0.74
Positive
33.43
Neutral
7.63
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JACK, the sentiment is Negative. The current price of 21.97 is below the 20-day moving average (MA) of 25.75, below the 50-day MA of 27.02, and below the 200-day MA of 39.60, indicating a bearish trend. The MACD of -0.74 indicates Positive momentum. The RSI at 33.43 is Neutral, neither overbought nor oversold. The STOCH value of 7.63 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JACK.
Jack In The Box Risk Analysis
Jack In The Box disclosed 36 risk factors in its most recent earnings report. Jack In The Box reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Jack In The Box Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.70B | 17.60 | 46.60% | 1.93% | 4.42% | 48.23% | |
73 Outperform | $308.66M | 7.28 | 117.47% | ― | -3.96% | 1036.87% | |
71 Outperform | $426.66M | 18.01 | -102.54% | 1.92% | 6.83% | 24.77% | |
66 Neutral | $2.35B | 13.08 | 90.40% | 8.16% | 2.18% | -5.15% | |
61 Neutral | $6.97B | 11.38 | 2.88% | 3.90% | 2.64% | -22.07% | |
60 Neutral | $286.10M | 11.19 | 9.68% | ― | 1.22% | 6.59% | |
50 Neutral | $448.39M | ― | 4.15% | 7.41% | -6.02% | -136.86% |
* Consumer Cyclical Sector Average
Performance Comparison
JACK
Jack In The Box
21.97
-30.03
-57.75%
NATH
Nathan's Famous
106.25
39.00
57.99%
CAKE
Cheesecake Factory
54.54
17.13
45.79%
WEN
Wendy's
12.34
-4.71
-27.62%
PBPB
Potbelly
10.18
1.47
16.88%
LOCO
El Pollo LoCo
9.29
-1.48
-13.74%
Jack In The Box Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q2-2025)
| % Change Since: -14.41%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Negative
The earnings call reflects a company facing significant challenges with declining same-store sales, lower margins, and economic pressures. Despite this, there are positive strides in digital sales and technological advancements as part of their strategic plan. However, the lowlights outweigh the highlights, indicating a challenging period ahead.Q2-2025 Updates
Positive Updates
Digital Sales Growth
Jack in the Box has achieved 18% digital sales systemwide and aims to reach 20% ahead of schedule. The rollout of new point-of-sale systems and flip kiosks in 1,500 restaurants has contributed to this growth.
Technological Advancements
The company is implementing a new POS system and flip kiosks, which have been installed in nearly 1,500 locations, as part of its tech modernization and digital evolution strategy.
Commitment to Long-term Growth
The Jack on Track plan focuses on simplifying the company’s structure, strengthening the balance sheet, closing underperforming restaurants, and preserving growth-oriented capital investments.
Negative Updates
Decline in Same-store Sales
Jack brand same-store sales decreased by 4.4%, with franchise and company-owned sales both seeing declines. Del Taco experienced a 3.6% decline in system same-store sales.
Decreased Restaurant Level Margin
Jack in the Box's restaurant level margin decreased to 19.6%, down from 23.6% a year ago, due to lower sales and increased costs. Del Taco's restaurant level margin was 12.8%, down 400 basis points.
Noncash Goodwill and Intangible Asset Impairment
The company recorded a noncash goodwill and intangible asset impairment of $203.2 million for the Del Taco reporting unit, resulting in a GAAP diluted loss per share for the quarter.
Negative Traffic and Economic Pressure
The company faces significant pressure from multiple-income cohorts and negative traffic, with challenges exacerbated by economic headwinds and reliance on low-income consumers.
Restaurant Openings and Closures
There were five restaurant openings and 12 closures in the quarter, with a continued focus on closing underperforming units.
Company Guidance
During the Jack in the Box Second Quarter 2025 Earnings Call, several key metrics and guidance were provided, reflecting the company's ongoing strategies and challenges. The company reported a same-store sales decrease of 4.4% for the Jack brand, with franchise sales down 4.5% and company-owned sales declining by 4%. Digital sales have reached 18% systemwide, aided by the rollout of new point-of-sale systems and kiosks in approximately 1,500 restaurants. The restaurant-level margin for Jack decreased to 19.6% from 23.6% due to sales declines and inflationary pressures. Del Taco saw a system same-store sales decline of 3.6%, with franchise sales down 4.2% and company-owned sales decreasing by 1.7%. Del Taco's restaurant-level margin fell to 12.8%. The company also recorded a noncash goodwill and intangible asset impairment of $203.2 million for Del Taco. Jack in the Box reiterated its commitment to its Jack on Track plan, focusing on digital growth, technological modernization, and strategic closures to drive long-term sustainable growth.Jack In The Box Corporate Events
Executive/Board Changes
Jack In The Box Approves Executive Stock Retention Awards
Neutral
May 1, 2025
On April 26, 2025, Jack in the Box Inc.’s Compensation Committee approved stock retention awards for its executive leadership team, excluding the CEO, to be granted effective May 1, 2025. The awards, totaling $2.55 million, are split between restricted stock units and performance share units, with vesting conditions based on stock price performance over three years, aiming to incentivize and retain key executives.
Spark’s Take on JACK Stock
According to Spark, TipRanks’ AI Analyst, JACK is a Neutral.
Jack In The Box faces significant financial challenges with declining revenue and profitability, heavy leverage, and a negative equity position, which are major concerns. The technical indicators also suggest a bearish trend. Although the high dividend yield and strategic leadership change are positive, the overall outlook remains cautious due to economic pressures and operational challenges. The combination of these factors results in an overall stock score of 50.
To see Spark’s full report on JACK stock, click here.
Executive/Board ChangesBusiness Operations and Strategy
Jack In The Box Appoints Lance Tucker as CEO
Positive
Mar 31, 2025
On March 31, 2025, Jack in the Box Inc. announced the appointment of Lance Tucker as the new Chief Executive Officer and a member of the Board, effective immediately. Tucker, who has extensive experience in corporate finance and previously held senior roles at companies like Davidson Hospitality Group and CKE Restaurants Holdings, will see his compensation package significantly increased as he takes on this leadership role. This strategic appointment is expected to strengthen the company’s executive team and potentially enhance its market positioning.
Executive/Board Changes
Jack In The Box CEO Darin Harris Resigns
Neutral
Feb 24, 2025
On February 20, 2025, Darin Harris announced his resignation as CEO and Director of Jack in the Box Inc. to pursue other opportunities, with Lance Tucker stepping in as interim principal executive officer effective February 24, 2025. Tucker, who has extensive experience in corporate finance and the restaurant industry, is expected to maintain the company’s competitive edge in the quick-service restaurant sector. Meanwhile, Dawn Hooper will serve as interim principal financial officer, continuing her long-standing tenure with the company. The Board has expressed confidence in Tucker’s ability to balance growth and financial goals during this leadership transition.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.