Core Insights - Jack in the Box has agreed to sell its subsidiary Del Taco Holdings to Yadav Enterprises for $115 million in cash, with the deal expected to close by January 2026 [1][2] - The sale is part of a strategic review initiated in April 2025 and aligns with the company's Jack on Track plan [2][3] - Jack in the Box aims to simplify its business and transition to a more asset-light model through this divestiture [3] Financial Details - Jack in the Box acquired Del Taco for $575 million in 2022, intending to leverage its strong drive-through presence [2] - The net cash proceeds from the sale will be used to pay down debt within the company's securitization structure [1] Strategic Context - The divestiture follows challenging quarters for Jack in the Box due to a slowdown in demand and increased competition in the fast-food industry [2] - CEO Lance Tucker emphasized the importance of this divestiture in returning to simplicity and focusing on the core Jack in the Box brand [3] Advisory and Future Plans - BofA Securities served as the exclusive financial adviser for Jack in the Box, while Sullivan & Cromwell provided legal counsel [3] - Jack in the Box plans to provide fiscal 2026 guidance and updates on the Jack on Track plan during its earnings release on November 19, 2025 [4]

Del Taco has logged six consecutive quarters of same-store sales declines. ...

This story was originally published on Restaurant Dive. To receive daily news and insights, subscribe to our free daily Restaurant Dive newsletter. Dive Brief: Jack in the Box is selling Del Taco to franchisee Yadav Enterprises for $115 million, according to a Thursday press release. The deal price is a significant markdown compared to the $575 million the burger brand paid for the taco chain in 2021. Jack in the Box and Del Taco have both struggled to grow sales in recent quarters, with the burger QSR ...

Group 1 - Jack in the Box is launching a new interactive game called DealQuest: Revenge of the Munchies within its app [1] - The game features a choose-your-own-adventure format where players can engage with menu items and unlock deals [1] - The promotion is themed around Halloween, aiming to enhance customer engagement and drive sales [1]

Core Insights - Jack in the Box is enhancing its Halloween offerings with the return of the Monster Taco and a new lineup of oversized menu items [1] - The new Monster Munchie Meal features two Monster Tacos and a Monster Mozzarella Stick, aimed at satisfying customer cravings [1] Product Offerings - The Monster Taco is back for its fifth year, indicating its popularity and success in previous years [1] - The introduction of the Monster Munchie Meal represents a strategic move to attract customers looking for larger, shareable meals during the Halloween season [1]

Core Insights - Jack in the Box is responding to inflationary pressures by enhancing customer value through larger drink sizes and lower prices [1] Group 1: Company Initiatives - Starting October 1, Jack in the Box will reintroduce larger cup sizes, providing customers with 25% more ounces in every soda [1]

Core Point - Jack in the Box is promoting its Smashed Jack burger with a special offer during Burger Week, allowing customers to purchase the burger for $5 each day from September 12 to 18, totaling $35 for seven burgers [1] Company Summary - The Smashed Jack burger, which debuted in 2024, has been recognized as the "Best Burger in Fast Food" [1] - The promotion is available both in-store and through the Jack App, emphasizing the company's focus on accessibility and customer engagement [1]

Core Point - Jack in the Box is returning to the Chicago area after a 40-year absence, with plans to open multiple locations in the suburbs [4][6]. Group 1: New Locations - The first Jack in the Box restaurant in the northern Illinois suburbs will open in Lake in the Hills, specifically at 320 N. Randall Road, which was previously an Arby's [4][5]. - The Lake in the Hills location is set to open on August 18 [5]. - The company aims to establish a total of 125 restaurants throughout the Chicago area, starting with locations in Lake in the Hills, Tinley Park, New Lenox, Naperville, Plainfield, Carol Stream, and Countryside [6]. Group 2: Operational Features - The new locations will offer dine-in, drive-thru, and mobile ordering options, and will operate 24 hours a day [6]. - Jack in the Box is known for a diverse menu that includes burgers, tacos, chicken sandwiches, milkshakes, breakfast items, and late-night snacks [6][7]. Group 3: Company Background - Jack in the Box currently operates 2,100 locations across 21 states [7]. - The company has a history of introducing industry standards such as the drive-thru and breakfast sandwiches, and it features one of the largest menus in the quick-service restaurant sector [7].

Core Insights - Jack In The Box reported a revenue of $332.99 million for the quarter ended June 2025, reflecting a year-over-year decline of 9.8% and an EPS of $1.02, down from $1.65 a year ago, with a revenue surprise of -2.17% and an EPS surprise of -12.07% compared to consensus estimates [1] Financial Performance - The company’s same-store sales decreased by 2.6%, which is better than the average estimate of -4.6% from six analysts [4] - Total restaurant counts for Jack In The Box stood at 2,168, slightly below the average estimate of 2,172 [4] - The total system count, including Jack In The Box and Del Taco, was 2,753, compared to an estimated 2,765 [4] Del Taco Performance - Del Taco's same-store sales experienced a significant decline of 7.1%, worse than the average estimate of -2.1% [4] - Del Taco's total restaurant counts were 585, below the average estimate of 593 [4] - Franchise revenues from Del Taco showed a substantial year-over-year decline of 32%, with reported revenues of $137.9 million against an estimated $195.5 million [4] Revenue Breakdown - Company restaurant sales for Jack In The Box were reported at $140.93 million, down 15.4% year-over-year and below the estimated $144.38 million [4] - Franchise contributions for advertising and other services were $54.16 million, slightly below the estimate of $55.7 million, representing a year-over-year decline of 7.1% [4] - Franchise rental revenues were reported at $85.13 million, compared to an estimate of $85.61 million, reflecting a year-over-year decrease of 4.5% [4]

Financial Data and Key Metrics Changes - For Q3 2025, Jack in the Box reported a system same-store sales decrease of 7.1%, with franchise same-store sales down 7.2% and company-owned same-store sales down 6.4% [23][24] - Consolidated adjusted EBITDA was $61.6 million, down from $78.9 million in the prior year, primarily due to sales deleverage [30] - GAAP diluted earnings per share for Q3 was $1.15 compared to a net loss per share of $6.26 in the same quarter last year [30] Business Line Data and Key Metrics Changes - Jack brand's restaurant level margin percentage decreased to 17.9%, down from 21% a year ago, driven by sales deleverage [24] - Del Taco's system same-store sales declined 2.6%, with franchise same-store sales down 2.7% and company-owned same-store sales down 2.2% [26] - Del Taco's restaurant level margin was 9.7%, down 370 basis points from the prior year, primarily due to lower sales and higher costs [27] Market Data and Key Metrics Changes - The macro environment remains challenging, with consumers, particularly in Hispanic communities, being cautious and pulling back spending [8][56] - Digital sales mix reached 18.5% for Jack in the Box, with Del Taco achieving approximately 20% of system-wide sales through digital channels [17][26] Company Strategy and Development Direction - The company is refocusing on improving the guest experience through operational excellence, quality food at good value, and modernizing restaurants [12][15][17] - The "Jack on Track" plan aims to close underperforming restaurants and improve franchisee health, with expectations to close 80 to 120 restaurants by the end of 2025 [32][35] - The company plans to invest $5.5 million in incremental marketing to support new product offerings and improve sales performance [11][38] Management's Comments on Operating Environment and Future Outlook - Management noted that the low-income consumer remains cautious, impacting sales, while the mid-income consumer has also shown signs of struggle [54][56] - The company expects same-store sales for Jack in the Box to decline in the low to mid-single digits for the fiscal year, with a focus on improving value offerings [39] - Management expressed confidence in the long-term potential of both Jack in the Box and Del Taco brands despite current challenges [6][8] Other Important Information - The company did not repurchase any shares during the quarter and has discontinued its dividend [31] - Total debt outstanding at quarter end was $1.7 billion, with a net debt to adjusted EBITDA leverage ratio of 5.7 times [32] Q&A Session Summary Question: Guidance for Jack in the Box same-store sales - Management indicated that Q4 performance is expected to improve with new value offerings and marketing support [42][44] Question: Real estate sales target of $100 million - The $100 million figure is seen as a minimum target, with flexibility based on the Del Taco process and cash accumulation [47][48] Question: Operational improvements with Shannon McKinney's return - Shannon is expected to focus on operational basics, improving service quality and accountability [52][53] Question: Sensitivity of restaurant margin to same-store sales changes - A 1% change in same-store sales is estimated to impact restaurant margin by approximately 10 basis points [75][78] Question: Impact of soft sales on the Jack on Track plan - Management confirmed that soft sales would not delay the Jack on Track initiatives, as closures and real estate sales will be spread over several years [81][82] Question: Interest in remodels from franchisees - There was high interest in the previous remodel program, with over 1,000 applications for a limited number of spots [93] Question: Cadence of remaining restaurant closures - Management anticipates that at least half of the remaining closures will occur by the end of the fiscal year [96][97]