PART I – FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and accompanying explanatory notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total assets and an increase in the total stockholders' deficit Condensed Consolidated Balance Sheets (July 6, 2025 vs. September 29, 2024) | Item | July 6, 2025 (in thousands) | September 29, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Cash | $38,014 | $24,745 | +$13,269 | | Total current assets | $200,381 | $181,277 | +$19,104 | | Property and equipment, net | $456,550 | $430,039 | +$26,511 | | Operating lease right-of-use assets | $1,389,944 | $1,410,083 | -$20,139 | | Intangible assets, net | $10,068 | $10,515 | -$447 | | Trademarks | $105,600 | $283,500 | -$177,900 | | Goodwill | $136,026 | $161,209 | -$25,183 | | Total assets | $2,596,091 | $2,735,629 | -$139,538 | | Total current liabilities | $432,893 | $434,259 | -$1,366 | | Total long-term liabilities | $3,114,819 | $3,153,168 | -$38,349 | | Total stockholders' deficit | $(951,621) | $(851,798) | -$99,823 | [Condensed Consolidated Statements of Earnings (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings%20(Loss)) The company shifted from a significant net loss to net earnings for the quarter, despite a year-to-date net loss Condensed Consolidated Statements of Earnings (Loss) (Quarter Ended July 6, 2025 vs. July 7, 2024) | Item | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Total Revenues | $332,987 | $369,171 | -$36,184 | | Operating costs and expenses, net | $292,199 | $471,407 | -$179,208 | | Earnings (loss) from operations | $40,788 | $(102,236) | +$143,024 | | Net earnings (loss) | $22,027 | $(122,300) | +$144,327 | | Basic Earnings (loss) per share | $1.16 | $(6.29) | +$7.45 | | Diluted Earnings (loss) per share | $1.15 | $(6.26) | +$7.41 | | Cash dividends declared per common share | $— | $0.44 | -$0.44 | Condensed Consolidated Statements of Earnings (Loss) (Year-to-date Ended July 6, 2025 vs. July 7, 2024) | Item | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Total Revenues | $1,139,121 | $1,222,016 | -$82,895 | | Operating costs and expenses, net | $1,181,200 | $1,190,582 | -$9,382 | | Earnings (loss) from operations | $(42,079) | $31,434 | -$73,513 | | Net earnings (loss) | $(86,515) | $(58,637) | -$27,878 | | Basic Earnings (loss) per share | $(4.54) | $(2.98) | -$1.56 | | Diluted Earnings (loss) per share | $(4.54) | $(2.96) | -$1.58 | | Cash dividends declared per common share | $0.88 | $1.32 | -$0.44 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income improved significantly for the quarter but worsened year-to-date, mirroring net earnings trends Condensed Consolidated Statements of Comprehensive Income (Loss) (Quarter Ended July 6, 2025 vs. July 7, 2024) | Item | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Net earnings (loss) | $22,027 | $(122,300) | +$144,327 | | Other comprehensive income, net of taxes | $446 | $363 | +$83 | | Comprehensive income (loss) | $22,473 | $(121,937) | +$144,410 | Condensed Consolidated Statements of Comprehensive Income (Loss) (Year-to-date Ended July 6, 2025 vs. July 7, 2024) | Item | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Net earnings (loss) | $(86,515) | $(58,637) | -$27,878 | | Other comprehensive income, net of taxes | $1,488 | $1,209 | +$279 | | Comprehensive income (loss) | $(85,027) | $(57,428) | -$27,599 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows from operations increased substantially, driving a significant positive swing in net cash flow Condensed Consolidated Statements of Cash Flows (Year-to-date Ended July 6, 2025 vs. July 7, 2024) | Cash Flow Activity | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Net loss | $(86,515) | $(58,637) | -$27,878 | | Cash flows provided by operating activities | $128,626 | $39,263 | +$89,363 | | Cash flows used in investing activities | $(62,190) | $(68,288) | +$6,098 | | Cash flows used in financing activities | $(52,492) | $(106,124) | +$53,632 | | Net increase (decrease) in cash and restricted cash | $13,944 | $(135,149) | +$149,093 | | Cash and restricted cash at end of period | $68,111 | $50,758 | +$17,353 | [Condensed Consolidated Statements of Stockholders' Deficit](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) The stockholders' deficit widened due to the net loss and dividend declarations, despite share-based compensation Changes in Stockholders' Deficit (September 29, 2024 to July 6, 2025) | Item | Amount (in thousands) | | :--- | :--- | | Balance at September 29, 2024 | $(851,798) | | Shares issued under stock plans, including tax benefit | $2 | | Share-based compensation | $6,812 | | Dividends declared | $(16,735) | | Purchases of treasury stock | $(4,996) | | Net loss | $(86,515) | | Other comprehensive income | $1,488 | | Balance at July 6, 2025 | $(951,621) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the company's accounting policies and financial statement components [1. BASIS OF PRESENTATION](index=9&type=section&id=1.%20BASIS%20OF%20PRESENTATION) This note details the company's operations, fiscal year structure, and key accounting policies - The Company develops, operates, and franchises quick-service restaurants under the **Jack in the Box and Del Taco brands**[25](index=25&type=chunk) - As of July 6, 2025, there were **142 company-operated and 2,026 franchise-operated Jack in the Box restaurants**, and **132 company-operated and 453 franchise-operated Del Taco restaurants**[25](index=25&type=chunk) - Fiscal years 2025 and 2024 each include **52 weeks**, with the first quarter being 16 weeks and other quarters 12 weeks[30](index=30&type=chunk) - Marketing fund contributions are approximately **5.0% of sales for Jack in the Box** and **4.0% of sales for Del Taco**[32](index=32&type=chunk) - The Company is evaluating the impact of ASU 2024-03, 'Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures', effective for annual periods beginning after December 15, 2026[42](index=42&type=chunk) Allowance for Doubtful Accounts Activity (Year-to-date) | Item | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | | :--- | :--- | :--- | | Balance as of beginning of period | $(4,512) | $(4,146) | | Provision for expected credit losses | $(2,361) | $(233) | | Write-offs charged against the allowance | $1,234 | $6 | | Balance as of end of period | $(5,639) | $(4,373) | [2. REVENUE](index=10&type=section&id=2.%20REVENUE) Revenue is disaggregated by segment, showing declines for both Jack in the Box and Del Taco brands - Revenue sources include retail sales from company-operated restaurants and rental revenue, royalties, advertising, franchise, and other fees from franchise-operated restaurants[43](index=43&type=chunk) Total Revenue by Segment (Quarter Ended July 6, 2025 vs. July 7, 2024) | Segment | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Jack in the Box | $262,401 | $281,749 | -$19,348 | | Del Taco | $70,586 | $87,422 | -$16,836 | | **Total Revenue** | **$332,987** | **$369,171** | **-$36,184** | Total Revenue by Segment (Year-to-date Ended July 6, 2025 vs. July 7, 2024) | Segment | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Jack in the Box | $899,196 | $926,351 | -$27,155 | | Del Taco | $239,925 | $295,665 | -$55,740 | | **Total Revenue** | **$1,139,121** | **$1,222,016** | **-$82,895** | Contract Liabilities (Deferred Franchise and Development Fees - Year-to-date) | Item | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | | :--- | :--- | :--- | | Deferred franchise and development fees at beginning of period | $51,990 | $50,471 | | Revenue recognized | $(4,656) | $(4,490) | | Additions | $2,001 | $4,243 | | Deferred franchise and development fees at end of period | $49,335 | $50,224 | [3. SUMMARY OF REFRANCHISINGS AND ASSETS HELD FOR SALE](index=12&type=section&id=3.%20SUMMARY%20OF%20REFRANCHISINGS%20AND%20ASSETS%20HELD%20FOR%20SALE) The company generated a net gain from refranchising Del Taco restaurants, while assets held for sale decreased - Assets classified as held for sale decreased from **$16.5 million** as of September 29, 2024, to **$12.0 million** as of July 6, 2025, relating to restaurants to be refranchised, sold, or leasebacked, and closed properties[50](index=50&type=chunk) Refranchising Activity (Year-to-date) | Item | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | | :--- | :--- | :--- | | Restaurants sold to Del Taco franchisees | 13 | 13 | | Proceeds from the sale of company-operated restaurants | $5,712 | $2,168 | | Gain (loss) on the sale of company-operated restaurants | $2,630 | $(1,384) | [4. FRANCHISE ACQUISITIONS](index=12&type=section&id=4.%20FRANCHISE%20ACQUISITIONS) The company acquired 18 Del Taco franchise restaurants in Q3 2025, recognizing significant goodwill - During the third quarter of 2025, the Company acquired **18 Del Taco franchise restaurants for $7.2 million**, recognizing **$6.3 million in goodwill**[51](index=51&type=chunk)[53](index=53&type=chunk) - In the first quarter of 2024, **9 Del Taco franchise restaurants were acquired for $86 thousand**, resulting in a **$2.4 million gain** recorded in 'Other operating expenses, net'[51](index=51&type=chunk)[53](index=53&type=chunk) [5. GOODWILL AND INTANGIBLE ASSETS, NET](index=13&type=section&id=5.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS%2C%20NET) The Del Taco reporting unit incurred significant goodwill and trademark impairment charges during the fiscal year - Goodwill allocated to the Del Taco reporting unit was impaired by **$25.3 million** in the second quarter of 2025 due to continued negative same-store sales trends, unfavorable economic conditions, potential divestment, and a sustained lower share price[56](index=56&type=chunk) - The Del Taco indefinite-lived trademark asset was impaired by **$177.9 million** in the second quarter of 2025, reducing its carrying amount to **$105.6 million**[58](index=58&type=chunk)[59](index=59&type=chunk) - Goodwill of **$6.3 million** recognized from a franchisee acquisition in Q3 2025 was **fully impaired** based on the Q2 2025 quantitative impairment analysis[57](index=57&type=chunk) Goodwill Carrying Amount (September 29, 2024 to July 6, 2025) | Item | Jack in the Box (in thousands) | Del Taco (in thousands) | Total (in thousands) | | :--- | :--- | :--- | :--- | | Balance at September 29, 2024 | $135,827 | $25,382 | $161,209 | | Impairment of goodwill | — | $(31,656) | $(31,656) | | Acquisition of Del Taco company-operated restaurants | — | $6,326 | $6,326 | | Reclassified from (to) assets held for sale | $199 | $(52) | $147 | | Balance at July 6, 2025 | $136,026 | $— | $136,026 | [6. LEASES](index=14&type=section&id=6.%20LEASES) Franchise rental revenues decreased for the quarter, primarily due to lower variable lease income - Initial terms of real estate leases are generally **20 years**, with renewal options[60](index=60&type=chunk) Franchise Rental Revenues (Quarter Ended July 6, 2025 vs. July 7, 2024) | Item | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Operating lease income - franchise | $60,645 | $59,767 | +$878 | | Variable lease income - franchise | $24,008 | $28,618 | -$4,610 | | Amortization of sublease assets and liabilities, net | $474 | $740 | -$266 | | **Franchise rental revenues** | **$85,127** | **$89,125** | **-$3,998** | Franchise Rental Revenues (Year-to-date Ended July 6, 2025 vs. July 7, 2024) | Item | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Operating lease income - franchise | $201,799 | $197,461 | +$4,338 | | Variable lease income - franchise | $85,157 | $89,339 | -$4,182 | | Amortization of sublease assets and liabilities, net | $1,024 | $1,347 | -$323 | | **Franchise rental revenues** | **$287,980** | **$288,147** | **-$167** | [7. FAIR VALUE MEASUREMENTS](index=15&type=section&id=7.%20FAIR%20VALUE%20MEASUREMENTS) The company's Class A-2 Notes are valued using Level 2 inputs, with fair value below carrying value - The non-qualified deferred compensation plan, a financial liability, is measured at fair value using **Level 1 inputs** (quoted prices in active markets)[63](index=63&type=chunk) - Non-financial instruments, including property and equipment, operating lease right-of-use assets, goodwill, and intangible assets, are reported at carrying value and assessed for impairment annually or when events indicate carrying value may not be recoverable[65](index=65&type=chunk) Class A-2 Notes Carrying Value vs. Fair Value (in thousands) | Item | July 6, 2025 Carrying Amount | July 6, 2025 Fair Value | September 29, 2024 Carrying Amount | September 29, 2024 Fair Value | | :--- | :--- | :--- | :--- | :--- | | Series 2019 Class A-2 Notes | $694,188 | $673,719 | $699,625 | $684,875 | | Series 2022 Class A-2 Notes | $1,028,500 | $951,671 | $1,045,000 | $975,507 | [8. OTHER OPERATING EXPENSES, NET](index=16&type=section&id=8.%20OTHER%20OPERATING%20EXPENSES%2C%20NET) Other operating expenses decreased year-to-date, driven by a significant reduction in strategic initiative costs Other Operating Expenses, Net (Quarter Ended July 6, 2025 vs. July 7, 2024) | Item | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Integration and strategic initiatives | $2,057 | $4,723 | -$2,666 | | Costs of closed restaurants and other | $1,917 | $160 | +$1,757 | | Operating restaurant impairment charges | $1,058 | $136 | +$922 | | Losses on disposition of property and equipment, net | $597 | $527 | +$70 | | **Total Other operating expenses, net** | **$5,683** | **$5,641** | **+$42** | Other Operating Expenses, Net (Year-to-date Ended July 6, 2025 vs. July 7, 2024) | Item | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Integration and strategic initiatives | $3,748 | $14,612 | -$10,864 | | Costs of closed restaurants and other | $4,684 | $1,792 | +$2,892 | | Operating restaurant impairment charges | $2,935 | $136 | +$2,799 | | Gains on acquisition of restaurants | $(6) | $(2,357) | +$2,351 | | Losses on disposition of property and equipment, net | $1,983 | $1,675 | +$308 | | **Total Other operating expenses, net** | **$13,418** | **$16,343** | **-$2,925** | [9. SEGMENT REPORTING](index=16&type=section&id=9.%20SEGMENT%20REPORTING) Both the Jack in the Box and Del Taco segments experienced declines in revenues and segment profit - The Company's reportable operating segments are **Jack in the Box and Del Taco** restaurant brands[70](index=70&type=chunk) - Beginning in 2025, the measure of segment profit was updated to exclude depreciation and amortization, net other operating expenses, net company-owned life insurance (COLI) gains, gains/losses on sale of company-operated restaurants, net amortization of favorable/unfavorable leases and subleases, amortization of franchise tenant improvement allowances, and amortization of cloud-computing costs[71](index=71&type=chunk) Revenues by Segment (Quarter Ended July 6, 2025 vs. July 7, 2024) | Segment | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Jack in the Box restaurant operations | $262,401 | $281,749 | -$19,348 | | Del Taco restaurant operations | $70,586 | $87,422 | -$16,836 | | **Consolidated revenues** | **$332,987** | **$369,171** | **-$36,184** | Segment Profit (Quarter Ended July 6, 2025 vs. July 7, 2024) | Segment | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Jack in the Box segment profit | $73,734 | $88,561 | -$14,827 | | Del Taco segment profit | $6,063 | $9,641 | -$3,578 | | Shared services and unallocated costs | $(18,169) | $(19,096) | +$927 | | **Total segment profit** | **$61,628** | **$79,106** | **-$17,478** | [10. INCOME TAXES](index=17&type=section&id=10.%20INCOME%20TAXES) The company recorded income tax benefits in fiscal 2025, a reversal from expenses in 2024 - The effective tax rates differed from the U.S. statutory tax rate primarily due to **non-deductible goodwill impairment**, partially offset by non-taxable gains from market performance of insurance products[73](index=73&type=chunk)[74](index=74&type=chunk) - The Company is evaluating the potential implications of the 'One Big Beautiful Bill Act' enacted on July 4, 2025, but did not identify any material impacts to its provision for income taxes in the period of enactment[76](index=76&type=chunk) Income Tax (Benefit) Expense and Effective Tax Rates | Period | Income Tax (Benefit) Expense (in thousands) | Effective Tax Rate | | :--- | :--- | :--- | | Q3 Fiscal Year 2025 | $(506) | (2.4%) | | Year-to-date Fiscal Year 2025 | $(20,754) | 19.3% | | Q3 Fiscal Year 2024 | $83 | (0.1%) | | Year-to-date Fiscal Year 2024 | $23,316 | (66.0%) | [11. RETIREMENT PLANS](index=18&type=section&id=11.%20RETIREMENT%20PLANS) The company sponsors several frozen defined benefit and post-retirement plans, with no required contributions to its Qualified Plan in 2025 - The Company sponsors a frozen 'Qualified Plan' for full-time employees hired before January 1, 2011, and an unfunded supplemental executive retirement plan (SERP) closed to new participants effective January 1, 2007[77](index=77&type=chunk) - Two post-retirement healthcare plans, closed to new participants, provide medical benefits to certain eligible employees[78](index=78&type=chunk) - The Company does not anticipate making any contributions to its Qualified Plan in fiscal 2025[79](index=79&type=chunk) Estimated Net Contributions for Fiscal 2025 (in thousands) | Plan | Net Year-to-date Contributions | Remaining Estimated Net Contributions | | :--- | :--- | :--- | | SERP | $4,361 | $764 | | Healthcare Plans | $1,009 | $130 | | **Total** | **$5,370** | **$894** | [12. STOCKHOLDERS EQUITY AND REPURCHASES OF COMMON STOCK](index=18&type=section&id=12.%20STOCKHOLDERS%20EQUITY%20AND%20REPURCHASES%20OF%20COMMON%20STOCK) The company repurchased shares, declared dividends before discontinuing them, and adopted a stockholder rights plan - The Company repurchased **0.1 million shares** of common stock for an aggregate cost of **$5.0 million** year-to-date ended July 6, 2025[80](index=80&type=chunk) - As of July 6, 2025, **$175.0 million remained under authorized share repurchase programs**[80](index=80&type=chunk) - Two cash dividends of **$0.44 per common share** were declared, totaling **$16.7 million**, but future dividends have been discontinued to direct funds toward debt reduction[81](index=81&type=chunk) - A limited-duration stockholder rights plan was adopted on July 1, 2025, expiring July 1, 2026, to allow existing shareholders to purchase shares at a 50% discount if a person or group acquires 12.5% or more of outstanding common stock[82](index=82&type=chunk) [13. WEIGHTED AVERAGE SHARES OUTSTANDING](index=19&type=section&id=13.%20WEIGHTED%20AVERAGE%20SHARES%20OUTSTANDING) Basic and diluted weighted-average shares outstanding decreased year-over-year Weighted-Average Shares Outstanding (in thousands) | Item | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Weighted-average shares outstanding – basic | 19,061 | 19,454 | 19,051 | 19,690 | | Weighted-average shares outstanding – diluted | 19,152 | 19,541 | 19,051 | 19,836 | | Excluded from diluted weighted-average shares outstanding: Antidilutive | 559 | 257 | 469 | 22 | | Excluded from diluted weighted-average shares outstanding: Performance conditions not satisfied | 184 | 136 | 233 | 136 | [14. COMMITMENTS AND CONTINGENCIES](index=19&type=section&id=14.%20COMMITMENTS%20AND%20CONTINGENCIES) The company has accrued for several legal matters and maintains a contingent liability for Qdoba lease guarantees - As of July 6, 2025, the Company had accruals of **$18.8 million** for all legal matters, included in 'Accrued liabilities'[84](index=84&type=chunk) - In Gessele v. Jack in the Box Inc., a jury awarded approximately **$6.4 million** in damages and penalties, with an additional **$9.9 million** accrued for estimated interest and fees, totaling **$16.3 million**[85](index=85&type=chunk) - In J&D Restaurant Group, an **$8.0 million** jury verdict against the Company was overturned by the court; the plaintiff has appealed, and an amount commensurate with resolution attempts has been accrued[86](index=86&type=chunk) - The maximum potential liability for Qdoba lease guarantees is approximately **$18.7 million**, extending for up to 13 more years, but no liability has been recorded as the likelihood of future payments is remote[88](index=88&type=chunk) [15. SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION](index=20&type=section&id=15.%20SUPPLEMENTAL%20CONSOLIDATED%20CASH%20FLOW%20INFORMATION) This note details non-cash investing and financing activities, including operating lease obligations Non-Cash Investing and Financing Transactions (Year-to-date) | Item | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | | :--- | :--- | :--- | | Increase (decrease) in obligations for purchases of property and equipment | $2,648 | $(3,825) | | Increase in dividends accrued or converted to common stock equivalents | $121 | $210 | | Right-of use assets obtained in exchange for operating lease obligations | $120,202 | $165,200 | [16. SUPPLEMENTAL CONSOLIDATED BALANCE SHEET INFORMATION](index=21&type=section&id=16.%20SUPPLEMENTAL%20CONSOLIDATED%20BALANCE%20SHEET%20INFORMATION) This section provides a detailed breakdown of specific balance sheet accounts Accounts and Other Receivables, Net (in thousands) | Item | July 6, 2025 | September 29, 2024 | | :--- | :--- | :--- | | Trade | $86,051 | $71,306 | | Allowance for doubtful accounts | $(5,639) | $(4,512) | | **Total** | **$88,472** | **$83,567** | Property and Equipment, Net (in thousands) | Item | July 6, 2025 | September 29, 2024 | | :--- | :--- | :--- | | Land | $93,255 | $93,950 | | Buildings | $963,903 | $963,699 | | Restaurant and other equipment | $202,325 | $171,436 | | Construction in progress | $63,179 | $49,445 | | Less accumulated depreciation and amortization | $(866,112) | $(848,491) | | **Total** | **$456,550** | **$430,039** | Accrued Liabilities (in thousands) | Item | July 6, 2025 | September 29, 2024 | | :--- | :--- | :--- | | Legal accruals | $18,750 | $16,220 | | Payroll and related taxes | $35,136 | $38,112 | | Deferred rent income | $17,949 | $— | | **Total** | **$186,414** | **$166,868** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, condition, and outlook, including brand-specific results [GENERAL](index=22&type=section&id=GENERAL) This section defines the company's fiscal year and key non-GAAP performance metrics used by management - The Company's fiscal year is **52 or 53 weeks**, ending the Sunday closest to September 30; fiscal years 2025 and 2024 each include 52 weeks[92](index=92&type=chunk) - Key performance metrics include changes in **same-store sales, systemwide sales, franchised restaurant sales, and average unit volumes (AUVs)**, which are not GAAP measurements but are useful for investors[94](index=94&type=chunk) [OVERVIEW](index=22&type=section&id=OVERVIEW) The company announced a strategic plan involving the Del Taco brand, real estate sales, and restaurant closures - As of July 6, 2025, the Company operated and franchised **2,168 Jack in the Box restaurants** and **585 Del Taco restaurants**[95](index=95&type=chunk) - On April 23, 2025, the Company announced a strategic plan to explore alternatives for the Del Taco brand, sell owned real estate, discontinue dividends to reduce debt, and close approximately **150-200 underperforming Jack in the Box restaurants**[96](index=96&type=chunk) [RESULTS OF OPERATIONS](index=23&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes financial performance, including sales declines and significant impairment charges for Del Taco [Jack in the Box Brand](index=24&type=section&id=Jack%20in%20the%20Box%20Brand) The Jack in the Box brand saw declines in company and franchise sales, with rising labor and occupancy costs [Company Restaurant Operations](index=24&type=section&id=Company%20Restaurant%20Operations) - Food and packaging costs as a percentage of sales **decreased by 0.6% in the quarter and 2.0% year-to-date**, primarily due to a new beverage contract and menu price increases, partially offset by commodity inflation (4.0% in Q3, 3.3% YTD)[102](index=102&type=chunk) - Payroll and employee benefit costs as a percentage of sales **increased by 2.2% in the quarter and 2.6% year-to-date**, driven by additional FUTA taxes in California and wage inflation (1.5% in Q3, 9.5% YTD, mainly due to AB 1228)[103](index=103&type=chunk) - Occupancy and other costs as a percentage of sales **increased by 1.6% in the quarter and 1.4% year-to-date**, mainly due to sales deleverage, higher rent, utilities, and delivery fees[104](index=104&type=chunk) Jack in the Box Company Restaurant Sales (in thousands) | Period | July 6, 2025 | July 7, 2024 | Change | | :--- | :--- | :--- | :--- | | Quarter | $94,112 | $100,355 | -$6,243 (-6.2%) | | Year-to-date | $322,962 | $331,339 | -$8,377 (-2.5%) | Jack in the Box Company Same-Store Sales Change | Period | July 6, 2025 | July 7, 2024 | | :--- | :--- | :--- | | Quarter | (6.4%) | 0.1% | | Year-to-date | (3.3%) | 0.6% | [Franchise Operations](index=26&type=section&id=Franchise%20Operations) - Franchise rental revenues **decreased by $5.6 million (6.8%) in the quarter** and **$7.1 million (2.7%) year-to-date**, primarily due to lower percentage rent, partially offset by lease termination fees[106](index=106&type=chunk) - Franchise royalties and other **decreased by $3.2 million (6.7%) in the quarter** and **$4.7 million (3.0%) year-to-date**, driven by lower sales[107](index=107&type=chunk) - Franchise contributions for advertising and other services revenues **decreased by $4.3 million (8.3%) in the quarter** and **$7.0 million (4.1%) year-to-date**, mainly due to lower sales impacting marketing contributions[107](index=107&type=chunk) Jack in the Box Franchise Revenues (in thousands) | Revenue Type | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Franchise rental revenues | $76,538 | $82,154 | $260,254 | $267,350 | | Royalties | $43,078 | $46,490 | $148,208 | $153,227 | | Franchise contributions for advertising and other services | $47,147 | $51,419 | $162,007 | $168,960 | [Del Taco Brand](index=27&type=section&id=Del%20Taco%20Brand) The Del Taco brand saw significant sales decreases due to refranchising, though franchise revenues increased [Company Restaurant Operations](index=27&type=section&id=Company%20Restaurant%20Operations) - Sales decrease primarily due to the **refranchising of 47 company-operated restaurants** since Q3 2024 and decreases in same-store sales[110](index=110&type=chunk) - Food and packaging costs as a percentage of sales **increased by 1.0% in the quarter** due to unfavorable menu mix and commodity inflation (4.7% in Q3), but **decreased 0.8% year-to-date** due to menu price increases and favorable beverage funding[111](index=111&type=chunk) - Payroll and employee benefit costs as a percentage of sales **increased by 1.0% in the quarter and 2.4% year-to-date**, mainly due to higher insurance and CA unemployment payroll tax adjustments, despite labor deflation of 0.5% in Q3[112](index=112&type=chunk) Del Taco Company Restaurant Sales (in thousands) | Period | July 6, 2025 | July 7, 2024 | Change | | :--- | :--- | :--- | :--- | | Quarter | $46,819 | $66,125 | -$19,306 (-29.2%) | | Year-to-date | $161,867 | $226,279 | -$64,412 (-28.5%) | Del Taco Company Same-Store Sales Change | Period | July 6, 2025 | July 7, 2024 | | :--- | :--- | :--- | | Quarter | (2.2%) | (3.5%) | | Year-to-date | (2.2%) | (0.9%) | [Franchise Operations](index=28&type=section&id=Franchise%20Operations) - Franchise rental revenues **increased by $1.6 million (23.2%) in the quarter** and **$6.9 million (33.3%) year-to-date**, primarily due to higher rental income and property tax revenue from new subleases related to refranchised restaurants[115](index=115&type=chunk) - Franchise royalties and other **increased by $0.7 million (9.3%) in the quarter** and **$1.8 million (7.1%) year-to-date**, mainly due to higher franchise restaurant sales resulting from refranchising[116](index=116&type=chunk) - Franchise support and other costs **increased by $0.5 million (56.5%) in the quarter** and **$1.6 million (45.5%) year-to-date**, primarily due to higher bad debt expense[118](index=118&type=chunk) Del Taco Franchise Revenues (in thousands) | Revenue Type | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Franchise rental revenues | $8,589 | $6,971 | $27,726 | $20,797 | | Royalties | $7,469 | $7,287 | $25,054 | $24,055 | | Franchise contributions for advertising and other services | $7,013 | $6,854 | $23,563 | $23,583 | [Company-Wide Results](index=28&type=section&id=Company-Wide%20Results) Company-wide results were impacted by lower SG&A, significant Del Taco impairment charges, and income tax benefits [Depreciation and Amortization](index=28&type=section&id=Depreciation%20and%20Amortization) - Depreciation and amortization **decreased by $1.0 million in the quarter and $2.9 million year-to-date**, primarily due to the refranchising of 47 Del Taco restaurants and certain Jack in the Box franchise assets becoming fully depreciated, partially offset by new technology assets and company-operated restaurants[120](index=120&type=chunk) [Selling, General and Administrative ("SG&A") Expenses](index=29&type=section&id=Selling%2C%20General%20and%20Administrative%20(%22SG%26A%22)%20Expenses) - Incentive compensation **decreased by $2.0 million in the quarter and $3.1 million year-to-date** due to lower achievement levels[122](index=122&type=chunk) - Share-based compensation **decreased by $0.2 million in the quarter and $4.2 million year-to-date** due to current year forfeitures and lower achievement levels for performance-based awards[122](index=122&type=chunk) - Insurance costs **increased by $3.3 million in the quarter and $3.1 million year-to-date**, primarily due to rolling over favorable adjustments from prior year workers' compensation and general liability claims[125](index=125&type=chunk) SG&A Expenses (in thousands) | Item | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Advertising | $7,398 | $8,267 | $25,839 | $26,438 | | Incentive compensation | $(797) | $1,237 | $4,659 | $7,719 | | Share-based compensation | $2,127 | $2,357 | $6,812 | $11,018 | | Cash surrender value of COLI policies, net | $(6,062) | $(3,223) | $(3,264) | $(9,289) | | Litigation matters | $530 | $518 | $1,704 | $1,236 | | Insurance | $2,426 | $(906) | $6,351 | $3,279 | | **Total SG&A expenses** | **$26,835** | **$29,580** | **$112,999** | **$113,200** | [Impairment of Goodwill and Intangible Assets](index=29&type=section&id=Impairment%20of%20Goodwill%20and%20Intangible%20Assets) - Goodwill allocated to the Del Taco reporting unit was impaired by **$25.3 million in Q2 2025** due to negative same-store sales trends, unfavorable economic conditions, potential divestment, and a sustained lower share price[126](index=126&type=chunk) - An additional **$6.3 million in goodwill** from a Q3 2025 franchisee acquisition was **fully impaired** based on the Q2 2025 analysis[127](index=127&type=chunk) - The Del Taco trademark asset incurred an impairment of **$177.9 million in Q2 2025**[128](index=128&type=chunk) [Other Operating Expenses, Net](index=30&type=section&id=Other%20Operating%20Expenses%2C%20Net) - Other operating expenses, net, **decreased by $2.9 million year-to-date**, primarily due to a **$10.9 million decrease in integration and strategic initiatives**, partially offset by increases in costs of closed restaurants and operating restaurant impairment charges[129](index=129&type=chunk) [Gains and Losses on the Sale of Company-Operated Restaurants](index=30&type=section&id=Gains%20and%20Losses%20on%20the%20Sale%20of%20Company-Operated%20Restaurants) - For the year-to-date period in 2025, the Company recognized a **net gain of $2.6 million** on the sale of 13 Del Taco company-operated restaurants[130](index=130&type=chunk) - In the prior year (YTD 2024), a **net loss of $1.4 million** was recorded, including a **$2.2 million impairment** of assets held for sale[130](index=130&type=chunk) [Interest Expense, Net](index=30&type=section&id=Interest%20Expense%2C%20Net) - Interest expense, net, **decreased by $0.5 million in the quarter and $0.8 million year-to-date**, primarily due to lower average borrowings[132](index=132&type=chunk) [Income Taxes](index=30&type=section&id=Income%20Taxes) - For Q3 and year-to-date fiscal year 2025, the Company recorded income tax benefits of **$0.5 million and $20.8 million**, respectively, with effective tax rates of **(2.4%) and 19.3%**[133](index=133&type=chunk) - For Q3 and year-to-date fiscal year 2024, the Company recorded income tax expenses of **$0.1 million and $23.3 million**, respectively, with effective tax rates of **(0.1%) and (66.0%)**[134](index=134&type=chunk) - Differences in effective tax rates were primarily due to **non-deductible goodwill impairment** and non-taxable gains from insurance products[133](index=133&type=chunk)[134](index=134&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=31&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Operating cash flow increased significantly, while investing and financing cash usage decreased [General](index=31&type=section&id=General) - Primary sources of liquidity are **cash flows from operations** and borrowings available under the credit facility[136](index=136&type=chunk) - As of July 6, 2025, the Company had **$68.1 million in cash and restricted cash**, and **$96.5 million in available borrowings** under its $150.0 million Variable Funding Notes[137](index=137&type=chunk) - The Company expects cash flows from operations and its securitized financing facility to be sufficient to meet capital expenditure, working capital, and debt service requirements for the foreseeable future[138](index=138&type=chunk) [Cash Flows](index=31&type=section&id=Cash%20Flows) - Operating cash flows **increased by $89.4 million**, primarily due to a **$114.7 million favorable change in working capital**, partially offset by lower net income (adjusted for non-cash items)[139](index=139&type=chunk) - Cash flows used in investing activities **decreased by $6.1 million**, driven by lower spending for assets intended for sale/leaseback and higher proceeds from asset sales, partially offset by franchise acquisitions and higher property/equipment purchases[140](index=140&type=chunk) Summary of Cash Flows (Year-to-date) | Activity | July 6, 2025 (in thousands) | July 7, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Operating activities | $128,626 | $39,263 | +$89,363 | | Investing activities | $(62,190) | $(68,288) | +$6,098 | | Financing activities | $(52,492) | $(106,124) | +$53,632 | | **Net cash flows** | **$13,944** | **$(135,149)** | **+$149,093** | [Capital Expenditures](index=32&type=section&id=Capital%20Expenditures) - Capital expenditures **increased by $3.1 million**, primarily due to increased restaurant information technology spending for a new POS system and digital enhancements, partially offset by decreased corporate technology spending[141](index=141&type=chunk) Capital Expenditures (Year-to-date, in thousands) | Category | July 6, 2025 | July 7, 2024 | | :--- | :--- | :--- | | Restaurants | $68,332 | $60,462 | | Corporate Services | $1,961 | $6,731 | | **Total capital expenditures** | **$70,293** | **$67,193** | [Sale of Company-Operated Restaurants](index=32&type=section&id=Sale%20of%20Company-Operated%20Restaurants) - The Company sold **13 Del Taco company-operated restaurants** year-to-date 2025, generating total proceeds of **$5.7 million**[142](index=142&type=chunk) [Financing Activities](index=32&type=section&id=Financing%20Activities) - Cash flows used in financing activities **decreased by $53.6 million** year-over-year, primarily due to a **$50.0 million decrease in stock repurchases** and a **$9.0 million decrease in dividends**, partially offset by a $6.0 million repayment on Variable Funding Notes[143](index=143&type=chunk) [Repurchases of common stock](index=32&type=section&id=Repurchases%20of%20common%20stock) - The Company repurchased **0.1 million shares** of common stock for **$5.0 million** in fiscal 2025, with **$175.0 million remaining** under authorized repurchase programs[144](index=144&type=chunk) [Dividends](index=32&type=section&id=Dividends) - The Board of Directors declared two cash dividends of **$0.44 per common share**, totaling **$16.7 million**, through July 6, 2025[145](index=145&type=chunk) - Dividends have been **discontinued effective April 23, 2025**, with funds directed towards debt reduction[145](index=145&type=chunk) [Securitized Refinancing Transaction](index=32&type=section&id=Securitized%20Refinancing%20Transaction) - In February 2022, the Company completed the sale of **$550.0 million each of Series 2022-1 Class A-2-I and Class A-2-II Fixed Rate Senior Secured Notes**[146](index=146&type=chunk) - A revolving financing facility of Variable Funding Notes permits borrowings up to **$150.0 million**; as of July 6, 2025, **$96.5 million was available**[147](index=147&type=chunk) - The Company resumed scheduled amortization payments on its 2022 Notes and Series 2019-1 Notes beginning in Q2 2022, as its **leverage ratio exceeded 5.0x**[149](index=149&type=chunk) [Restricted cash](index=33&type=section&id=Restricted%20cash) - As of July 6, 2025, the Company had **$30.1 million in restricted cash**, held by the Indenture trustee for payments of interest and commitment fees for the Class A-1 and A-2 Notes[150](index=150&type=chunk) [Covenants and restrictions](index=33&type=section&id=Covenants%20and%20restrictions) - As of July 6, 2025, the Company was **in compliance with all debt covenant requirements** and was not subject to any rapid amortization events[151](index=151&type=chunk) [Revolving credit facility](index=33&type=section&id=Revolving%20credit%20facility) - Del Taco's syndicated revolving credit facility, with an aggregate principal amount of up to **$75.0 million**, matured on February 28, 2025, and was not renewed[152](index=152&type=chunk) [DISCUSSION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=33&type=section&id=DISCUSSION%20OF%20CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) No material changes have occurred in critical accounting policies and estimates since the last annual report - There have been **no material changes** to the critical accounting policies and estimates previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 2024[153](index=153&type=chunk) [NEW ACCOUNTING PRONOUNCEMENTS](index=33&type=section&id=NEW%20ACCOUNTING%20PRONOUNCEMENTS) This section refers to Note 1 for information regarding new accounting pronouncements - Refer to Note 1, Basis of Presentation, of the notes to condensed consolidated financial statements for information on new accounting pronouncements[154](index=154&type=chunk) [CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS](index=34&type=section&id=CAUTIONARY%20STATEMENTS%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section discloses risks and uncertainties that could cause actual results to differ from projections - Forward-looking statements are based on management's current expectations and involve known and unknown risks and uncertainties[155](index=155&type=chunk) - Key risk factors include changes in labor costs, declines in economic conditions, increases in food and commodity costs, intense competition, inability to attract/retain personnel, negative publicity, regulatory and legal complexities, cybersecurity risks, and restrictive terms of securitized debt instruments[155](index=155&type=chunk)[157](index=157&type=chunk) - Investors are cautioned not to place undue reliance on forward-looking statements, which are made only as of the date issued, and the Company does not undertake any obligation to update them[156](index=156&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes have occurred in the company's market risks since the last annual report - There have been **no material changes** in the Company's quantitative and qualitative market risks since the Annual Report on Form 10-K for the fiscal year ended September 29, 2024[158](index=158&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal control - The Company's CEO and CFO concluded that **disclosure controls and procedures were effective** as of July 6, 2025[159](index=159&type=chunk) - **No material changes** in internal control over financial reporting occurred during the fiscal quarter ended July 6, 2025[160](index=160&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 14 for details on the company's legal matters and related contingencies - Refer to Note 14, Commitments and Contingencies, of the notes to the condensed consolidated financial statements for a discussion of legal matters[163](index=163&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to previously filed comprehensive risk factor disclosures - Readers should consider the risks and uncertainties described in Item 1A of the Annual Report on Form 10-K for the fiscal year ended September 29, 2024, and the 'Cautionary Statements Regarding Forward-Looking Statements' in Item 2 of this Quarterly Report[164](index=164&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased in the third quarter, with $175.0 million remaining under authorized programs - **No shares of common stock were repurchased** in the third quarter of 2025[165](index=165&type=chunk)[166](index=166&type=chunk) - As of July 6, 2025, **$175.0 million remained** under share repurchase programs authorized by the Board of Directors[165](index=165&type=chunk)[166](index=166&type=chunk) [Item 3. Defaults of Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20of%20Senior%20Securities) This section states that there were no defaults of senior securities to report - No defaults of senior securities[167](index=167&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[168](index=168&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended July 6, 2025[169](index=169&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including officer certifications and iXBRL documents - Exhibits include certifications of the Chief Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[170](index=170&type=chunk) - iXBRL Instance Document and Taxonomy Extension documents (Schema, Calculation, Definition, Label, Presentation) are filed[170](index=170&type=chunk) [Signature](index=39&type=section&id=Signature) The report was duly signed by the Chief Financial Officer on behalf of the company - The report was signed by Dawn Hooper, Chief Financial Officer, on August 6, 2025[173](index=173&type=chunk)

Executive Summary [Q3 2025 Highlights](index=1&type=section&id=Q3%202025%20Highlights) Q3 2025 financial results were challenging, with significant same-store sales declines for both brands and diluted EPS of $1.15 Q3 2025 Performance | Metric | Q3 2025 Performance | | :-------------------------- | :------------------ | | Jack in the Box Same-Store Sales | (7.1%) | | Del Taco Same-Store Sales | (2.6%) | | Diluted EPS | $1.15 | | Operating EPS | $1.02 | [CEO Commentary and Strategic Focus](index=1&type=section&id=CEO%20Commentary%20and%20Strategic%20Focus) CEO Lance Tucker expressed confidence in improving performance by prioritizing innovation, value, and guest experience, and continuing the 'JACK on Track' plan - CEO Lance Tucker is confident in regaining momentum by prioritizing immediate impact areas, leveraging innovation, offering craveable value, and improving guest experience[1](index=1&type=chunk) - The company remains committed to the 'JACK on Track' plan, focusing on simplifying the business model to drive shareholder value and sustainable long-term growth[2](index=2&type=chunk) Brand Performance [Jack in the Box Performance](index=1&type=section&id=Jack%20in%20the%20Box%20Performance) Jack in the Box experienced a significant decline in Q3 2025, with systemwide same-store sales decreasing by 7.1%, impacting margins and net restaurant count Jack in the Box Same-Store Sales (12 Weeks Ended) | Category | July 6, 2025 | July 7, 2024 | | :--------- | :----------- | :----------- | | Company | (6.4%) | 0.1% | | Franchise | (7.2%) | (2.4%) | | System | (7.1%) | (2.2%) | Jack in the Box Margins (12 Weeks Ended July 6, 2025 vs. July 7, 2024) | Metric | Q3 2025 (Value) | Q3 2025 (%) | Q3 2024 (Value) | Q3 2024 (%) | | :--------------------- | :-------------- | :---------- | :-------------- | :---------- | | Restaurant-Level Margin | $16.9 million | 17.9% | $21.1 million | 21.0% | | Franchise-Level Margin | $66.2 million | 39.3% | $74.6 million | 41.1% | Jack in the Box Restaurant Counts (Q3 2025) | Category | Company | Franchise | Total | | :------------------------ | :------ | :-------- | :---- | | Restaurant count at Q2'25 | 146 | 2,037 | 2,183 | | New | 1 | 5 | 6 | | Closed | (5) | (16) | (21) | | Restaurant count at end of Q3'25 | 142 | 2,026 | 2,168 | | Q3'25 QTD Net Restaurant Decrease | (4) | (11) | (15) | [Del Taco Performance](index=2&type=section&id=Del%20Taco%20Performance) Del Taco experienced a Q3 2025 systemwide same-store sales decrease of 2.6%, with declining restaurant-level margins but increased franchise-level margins Del Taco Same-Store Sales (12 Weeks Ended) | Category | July 6, 2025 | July 7, 2024 | | :--------- | :----------- | :----------- | | Company | (2.2%) | (3.5%) | | Franchise | (2.7%) | (4.1%) | | System | (2.6%) | (3.9%) | Del Taco Margins (12 Weeks Ended July 6, 2025 vs. July 7, 2024) | Metric | Q3 2025 (Value) | Q3 2025 (%) | Q3 2024 (Value) | Q3 2024 (%) | | :--------------------- | :-------------- | :---------- | :-------------- | :---------- | | Restaurant-Level Margin | $4.5 million | 9.7% | $8.8 million | 13.4% | | Franchise-Level Margin | $6.4 million | 27.0% | $5.8 million | 27.1% | - Del Taco's Restaurant-Level Margin decreased primarily due to refranchising, restaurant closures, lower sales, and higher operating costs (utilities, labor, commodity inflation)[10](index=10&type=chunk) - Del Taco's Franchise-Level Margin increased due to benefits from refranchising, early termination fees, and lower IT costs, partially offset by lower sales and increased bad debt expense[10](index=10&type=chunk) Del Taco Restaurant Counts (Q3 2025) | Category | Company | Franchise | Total | | :------------------------ | :------ | :-------- | :---- | | Restaurant count at Q2'25 | 117 | 474 | 591 | | New | — | 3 | 3 | | Acquired from franchisees | 18 | (18) | — | | Closed | (3) | (6) | (9) | | Restaurant count at end of Q3'25 | 132 | 453 | 585 | | Q3'25 QTD Net Restaurant Increase (Decrease) | 15 | (21) | (6) | Company-Wide Financial Performance [Key Financial Metrics](index=3&type=section&id=Key%20Financial%20Metrics) Total revenues decreased by 9.8% in Q3 2025, but net earnings significantly improved due to reduced impairment charges, while Adjusted EBITDA declined by 22.0% Company-Wide Key Financial Metrics (Q3 2025 vs. Q3 2024) | Metric | Q3 2025 (Value) | Q3 2024 (Value) | Change (%) | | :----------------- | :-------------- | :-------------- | :--------- | | Total Revenues | $333.0 million | $369.2 million | (9.8%) | | Diluted EPS | $1.15 | ($6.26) | N/A | | Operating EPS | $1.02 | $1.65 | (38.2%) | | Net Earnings (Loss)| $22.0 million | ($122.3 million)| N/A | | Adjusted EBITDA | $61.6 million | $78.9 million | (22.0%) | - The significant improvement in net earnings from a loss to a profit was largely driven by a substantial decrease in goodwill and intangible impairment charges, which were **$6.3 million in Q3 2025** compared to **$162.6 million in Q3 2024**[15](index=15&type=chunk) [Operating Costs and Expenses](index=3&type=section&id=Operating%20Costs%20and%20Expenses) Company-wide SG&A expenses decreased by $2.7 million year-over-year, primarily due to fluctuations in company-owned life insurance policies' cash surrender value and reduced incentive-based compensation Operating Costs and Expenses (Q3 2025 vs. Q3 2024) | Metric | Q3 2025 (Value) | Q3 2024 (Value) | Change (Value) | | :----------------------------------- | :-------------- | :-------------- | :------------- | | SG&A Expense | $26.8 million | $29.5 million | ($2.7 million) | | Impairment of goodwill and intangible assets | $6.3 million | $162.6 million | ($156.3 million) | - The decrease in SG&A was primarily due to fluctuations in the cash surrender value of company-owned life insurance policies and a decrease in incentive-based compensation, partially offset by an increase in insurance costs[16](index=16&type=chunk)[17](index=17&type=chunk) [Income Tax Provision](index=4&type=section&id=Income%20Tax%20Provision) The effective income tax rate for Q3 2025 was negative 2.4%, reflecting an income tax benefit primarily due to non-taxable gains from market performance of insurance products Income Tax Rates (Q3 2025 vs. Q3 2024) | Metric | Q3 2025 | Q3 2024 | | :---------------------- | :------ | :------ | | Effective Tax Rate | (2.4%) | (0.1%) | | Non-GAAP Operating EPS Tax Rate | 26.1% | N/A | - The negative effective tax rate was due to an income tax benefit recorded from non-taxable gains on market performance of insurance products used to fund non-qualified retirement plans[18](index=18&type=chunk) Capital Allocation [Capital Allocation](index=4&type=section&id=Capital%20Allocation) The company did not repurchase any shares in Q3 2025, with $175.0 million remaining under the authorized stock buyback program, and discontinued its dividend - No shares were repurchased in Q3 2025, with **$175.0 million** remaining under the stock buyback program[21](index=21&type=chunk) - The company discontinued its dividend[21](index=21&type=chunk) Guidance & Outlook [Company-Wide Fiscal Year 2025 Guidance](index=4&type=section&id=Company-Wide%20Fiscal%20Year%202025%20Guidance) The company provided updated fiscal year 2025 guidance, including capital expenditures of $85-$90 million, total share repurchases of $5 million, SG&A of $155-$160 million, and Adjusted EBITDA of $270-$275 million Company-Wide Fiscal Year 2025 Guidance | Metric | Guidance Range | | :---------------------------

Company Announcement - Jack Henry & Associates, Inc. will host a live webcast for its fourth quarter and full fiscal year 2025 earnings conference call on August 20, 2025 [1] - The press release for fiscal 2025 earnings will be issued after market close on August 19, 2025 [1] Webcast Details - The live webcast will start at 7:45 a.m. Central (8:45 a.m. Eastern) and can be accessed on the Jack Henry website [2] - Participants are advised to log on 10 minutes prior to the call, with US dial-in number (833) 630-0605 and international number +1 412-317-1830 [2] - An archived replay of the earnings call will be available approximately one hour after the live call [2] Deconversion Revenue - The company will release quarterly deconversion revenue results prior to the earnings results, with the press release scheduled for August 11, 2025 [3] Company Overview - Jack Henry is a financial technology company that connects financial institutions with their clients, serving approximately 7,500 clients [4] - The company has been providing technology solutions for nearly 50 years, focusing on innovation, collaboration, and user-centric services [4]

Core Insights - Jack In The Box reported a revenue of $336.7 million for the quarter ended March 2025, reflecting a year-over-year decline of 7.8% and a surprise of -1.07% compared to the Zacks Consensus Estimate of $340.34 million [1] - The earnings per share (EPS) for the quarter was $1.20, down from $1.46 in the same quarter last year, with an EPS surprise of +6.19% against the consensus estimate of $1.13 [1] Financial Performance - Jack In The Box's total system count was 2,774, slightly below the estimated 2,779 by analysts [4] - Same-store sales for Jack In The Box decreased by 4.4% year-over-year, worse than the analyst average estimate of -3.1% [4] - Company restaurant sales revenue was reported at $142.49 million, which is a 14.7% decline year-over-year and below the average estimate of $147.31 million [4] - Franchise revenues, including rental and royalties, totaled $140.25 million, representing a significant year-over-year decline of 29.3% compared to the average estimate of $194.32 million [4] Market Performance - Over the past month, shares of Jack In The Box have returned +10%, slightly outperforming the Zacks S&P 500 composite's +9.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Insights - Jack In The Box (JACK) reported quarterly earnings of $1.20 per share, exceeding the Zacks Consensus Estimate of $1.13 per share, but down from $1.46 per share a year ago, indicating an earnings surprise of 6.19% [1] - The company posted revenues of $336.7 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.07% and down from $365.35 million year-over-year [2] - Jack In The Box shares have declined approximately 37.4% since the beginning of the year, contrasting with the S&P 500's slight gain of 0.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.26 on revenues of $350.5 million, and for the current fiscal year, it is $5.24 on revenues of $1.5 billion [7] - The estimate revisions trend for Jack In The Box is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Retail - Restaurants industry, to which Jack In The Box belongs, is currently ranked in the bottom 20% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Another company in the same industry, Dave & Buster's, is expected to report a year-over-year earnings decline of 7.1% with revenues projected to decrease by 2.4% from the previous year [9]

Financial Data and Key Metrics Changes - Second quarter same store sales decreased by 4.4%, with franchise restaurant comp down 4.5% and company-owned sales down 4% [12][14] - Consolidated adjusted EBITDA was $66.5 million, down from $75.7 million in the prior year, primarily due to Del Taco refranchising and sales deleverage [19] - The company reported a consolidated GAAP diluted loss per share of negative $7.47 compared to diluted earnings per share of $1.26 in the prior year [19] Business Line Data and Key Metrics Changes - Jack brand's restaurant level margin percentage decreased to 19.6% from 23.6% a year ago, driven by lower sales and inflation [14] - Del Taco's system same store sales declined 3.6%, with franchise sales down 4.2% and company-owned comp down 1.7% [15][16] - Del Taco restaurant level margin was 12.8%, down 400 basis points from the prior year, primarily due to lower sales and inflation [17] Market Data and Key Metrics Changes - Digital sales now account for 18% of system-wide sales, aided by the implementation of kiosks and mobile ordering [9][16] - The company experienced a decline in transactions across both brands, impacting overall sales performance [12][15] Company Strategy and Development Direction - The company is focused on becoming a simpler, asset-light organization to drive sustainable growth for franchisees and investors [6] - The "Jack on Track" plan aims to strengthen the balance sheet, accelerate cash flow, and close underperforming restaurants [11] - The company is committed to technology modernization, including the rollout of a new point of sale system [9][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant pressure on multiple income cohorts, leading to negative traffic [8] - The company remains focused on driving same store sales as a top priority despite current challenges [9] - Management expressed optimism about the long-term transformation and growth potential of the company [6][11] Other Important Information - The company recorded a non-cash goodwill and intangible asset impairment of $203.2 million for the Del Taco reporting unit [19] - Capital expenditures for the quarter were $21.5 million, focusing on technology and digital initiatives [20] Q&A Session Summary Question: Current trends at Jack relative to the down 4.4% in Q2 - Management indicated that trends in Q3 are in line with Q2, facing a challenging industry environment [25][26] Question: Comp pressure driven by company-specific headwinds - Management noted IT issues impacting 1% to 2% in same store sales and highlighted the over-indexing on low-income consumers [30][31] Question: Key priorities for Del Taco during strategic alternatives exploration - Management emphasized the need for operational execution and revamping marketing strategies [36][38] Question: Allowance for doubtful accounts and potential bad debt expense - Management clarified that the increase is related to a specific franchise matter and does not anticipate an impact from the closure program [41] Question: Value positioning in the current environment - Management discussed the importance of perceived value and satisfaction rather than just low prices [45][46] Question: Conversations with franchisees post Jack on Track rollout - Management reported positive feedback from franchisees, who are supportive of long-term changes [50][51] Question: Geographic concentration of closures - Management stated that closures will be spread throughout the system, focusing on economic factors [55][56] Question: Strategic alternatives for Del Taco - Management indicated significant interest in the brand and is exploring various options, including potential divestiture [62][63] Question: Update on new unit development commitments - Management expressed excitement about new unit growth and ongoing developments in various markets [67][68] Question: Performance across different dayparts - Management noted even pressure across lunch and dinner, with some successful promotions [70][72]

Financial Data and Key Metrics Changes - Second quarter same store sales for Jack brand decreased by 4.4%, with franchise restaurant comp decrease of 4.5% and company-owned sales decrease of 4% [11] - Consolidated adjusted EBITDA was $66.5 million, down from $75.7 million in the prior year, primarily due to Del Taco refranchising and sales deleverage [18] - The company reported a consolidated GAAP diluted loss per share of negative $7.47 compared to diluted earnings per share of $1.26 in the prior year [18] Business Line Data and Key Metrics Changes - Jack brand's restaurant level margin percentage decreased to 19.6% from 23.6% a year ago, driven by lower sales and inflation [13] - Del Taco's system same store sales declined by 3.6%, with franchise sales decline of 4.2% and company-owned comp decrease of 1.7% [14] - Del Taco's restaurant level margin was 12.8%, down 400 basis points from the prior year, mainly due to lower sales and inflation [15] Market Data and Key Metrics Changes - Digital sales now account for 18% of system-wide sales, with a target of reaching 20% ahead of schedule [12] - The company experienced commodity inflation of 3.4% for Jack and 5.7% for Del Taco during the quarter [13][15] - Labor costs as a percentage of sales increased to 33.8% for Jack and 38.2% for Del Taco, primarily due to wage inflation [13][16] Company Strategy and Development Direction - The company is focused on becoming a simpler asset-light organization that drives sustainable growth for franchisees and investors [5] - The "Jack on Track" plan aims to strengthen the balance sheet, accelerate cash flow, and close underperforming restaurants [10] - The company is committed to technological advancements, including the rollout of a new point of sale system and modernization of legacy systems [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant pressure on multiple income cohorts leading to negative traffic and emphasized the importance of driving same store sales [6] - The company is facing challenges from cautious consumer behavior and self-inflicted issues related to technology integration [24] - Management remains optimistic about long-term growth despite current challenges, with a focus on core strengths and value offerings [26] Other Important Information - The company recorded a non-cash goodwill and intangible asset impairment of $203.2 million for the Del Taco reporting unit [18] - Capital expenditures for the quarter were $21.5 million, focusing on technology and digital initiatives [19] - The company has discontinued its dividend and did not repurchase any shares during the quarter [20] Q&A Session Summary Question: Current trends at Jack relative to the down 4.4% in 2Q - Management indicated that trends in the third quarter are in line with the second quarter, facing a challenging industry environment [24] Question: Company-specific headwinds affecting comp pressure - Management noted IT issues impacting 1% to 2% in same store sales and highlighted the brand's over-indexing on low-income consumers [29] Question: Key priorities for Del Taco during strategic alternatives exploration - Management emphasized the need for operational execution and revamping marketing strategies for Del Taco [36] Question: Allowance for doubtful accounts and potential bad debt expense - Management clarified that the increase is related to a specific franchise matter and does not anticipate it affecting the closure program [40] Question: Value positioning in the current environment - Management discussed the importance of perceived value rather than just low prices, focusing on core offerings and Munchie Meals [46] Question: Conversations with franchisees post Jack on Track rollout - Management reported positive feedback from franchisees, who are supportive of long-term changes [51] Question: Geographic concentration of upcoming closures - Management stated that closures will be spread throughout the system and will not concentrate in any specific area [56] Question: Strategic alternatives for Del Taco and potential divestiture - Management indicated significant interest in Del Taco and is exploring various options, with divestiture being a strong possibility [63] Question: Update on new unit development commitments - Management expressed excitement about new unit growth and mentioned ongoing developments in various markets [68] Question: Performance across different dayparts - Management noted even pressure across dayparts, with some successful promotions and partnerships [73]

PART I – FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of earnings (loss), comprehensive income (loss), cash flows, and stockholders' deficit, along with detailed notes explaining the basis of presentation, revenue recognition, refranchising activities, goodwill and intangible assets, leases, fair value measurements, operating expenses, segment reporting, income taxes, retirement plans, equity, weighted-average shares, commitments, contingencies, and supplemental cash flow and balance sheet information [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | April 13, 2025 (in thousands) | September 29, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total current assets | $199,936 | $181,277 | | Total assets | $2,579,544 | $2,735,629 | | Total current liabilities | $424,580 | $434,259 | | Total long-term liabilities | $3,131,185 | $3,153,168 | | Total stockholders' deficit | $(976,221) | $(851,798) | - Total assets decreased by approximately **$156 million** from September 29, 2024, to April 13, 2025, primarily driven by reductions in trademarks and goodwill[13](index=13&type=chunk) - Stockholders' deficit increased by approximately **$124 million**, indicating a worsening equity position[13](index=13&type=chunk) [Condensed Consolidated Statements of Earnings (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings%20(Loss)) | Metric (Year-to-date) | April 13, 2025 (in thousands) | April 14, 2024 (in thousands) | Change (YoY) | | :---------------------- | :---------------------------- | :---------------------------- | :----------- | | Total Revenues | $806,134 | $852,845 | -5.59% | | Earnings (loss) from operations | $(82,867) | $133,670 | -162.00% | | Net earnings (loss) | $(108,542) | $63,663 | -270.50% | | Basic EPS | $(5.70) | $3.22 | -277.02% | | Diluted EPS | $(5.70) | $3.19 | -278.99% | - The company reported a significant net loss of **$108.5 million** year-to-date April 13, 2025, a substantial decline from net earnings of **$63.7 million** in the prior year, primarily driven by a **$203.2 million** impairment of goodwill and intangible assets[15](index=15&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) | Metric (Year-to-date) | April 13, 2025 (in thousands) | April 14, 2024 (in thousands) | Change (YoY) | | :---------------------- | :---------------------------- | :---------------------------- | :----------- | | Net earnings (loss) | $(108,542) | $63,663 | -270.50% | | Other comprehensive income, net of taxes | $1,042 | $846 | 23.17% | | Comprehensive income (loss) | $(107,500) | $64,509 | -266.62% | - Comprehensive loss for the year-to-date period ended April 13, 2025, was **$107.5 million**, a significant reversal from comprehensive income of **$64.5 million** in the prior year[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity (Year-to-date) | April 13, 2025 (in thousands) | April 14, 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :---------------------------- | :---------------------------- | :----------- | | Operating activities | $68,890 | $(6,021) | +$74,911 | | Investing activities | $(32,471) | $(55,854) | +$23,383 | | Financing activities | $(44,994) | $(75,055) | +$30,061 | | Net decrease in cash and restricted cash | $(8,575) | $(136,930) | +$128,355 | - Cash flows from operating activities significantly improved, turning from a net use of **$6.0 million** in 2024 to a net provision of **$68.9 million** in 2025, primarily due to favorable changes in working capital[21](index=21&type=chunk)[137](index=137&type=chunk) - Net decrease in cash and restricted cash was substantially lower at **$8.6 million** in 2025 compared to **$136.9 million** in 2024, reflecting improved cash generation and reduced cash outflows from investing and financing activities[21](index=21&type=chunk) [Condensed Consolidated Statements of Stockholders' Deficit](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Deficit) | Metric | Balance at September 29, 2024 (in thousands) | Balance at April 13, 2025 (in thousands) | | :-------------------------------- | :--------------------------------------- | :------------------------------------- | | Total Stockholders' Deficit | $(851,798) | $(976,221) | | Retained Earnings | $1,866,660 | $1,741,383 | | Treasury Stock, at cost | $(3,195,629) | $(3,200,625) | - The total stockholders' deficit increased from **$(851.8) million** at September 29, 2024, to **$(976.2) million** at April 13, 2025, primarily due to a net loss of **$142.2 million** for the quarter and **$108.5 million** year-to-date[13](index=13&type=chunk)[23](index=23&type=chunk) - Retained earnings decreased by **$125.3 million** from September 29, 2024, to April 13, 2025, reflecting the net loss and dividends declared[13](index=13&type=chunk)[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the condensed consolidated financial statements, covering accounting policies, revenue disaggregation, refranchising activities, franchise acquisitions, goodwill and intangible asset impairments, lease accounting, fair value measurements, other operating expenses, segment performance, income taxes, retirement plans, equity changes, legal contingencies, and supplemental financial information [1. BASIS OF PRESENTATION](index=8&type=section&id=1.%20BASIS%20OF%20PRESENTATION) The company operates and franchises Jack in the Box and Del Taco quick-service restaurants. The financial statements are prepared in accordance with U.S. GAAP and SEC regulations, using consistent accounting policies with the 2024 Form 10-K. Key estimates are made, and the fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. Recent accounting pronouncements on segment reporting, income tax disclosures, and expense disaggregation are noted, with no significant expected impact from the first two, and evaluation ongoing for the third - As of April 13, 2025, the company operated 146 Jack in the Box and 117 Del Taco restaurants, with 2,037 Jack in the Box and 474 Del Taco franchise-operated restaurants[24](index=24&type=chunk) - Marketing fund contributions from Jack in the Box franchise and company-operated restaurants were approximately **5.0%** of sales, and Del Taco contributions were approximately **4.0%** of sales in 2025 and 2024[31](index=31&type=chunk) | Allowance for Doubtful Accounts Activity (in thousands) | Year-to-date April 13, 2025 | Year-to-date April 14, 2024 | | :----------------------------------------------------- | :-------------------------- | :-------------------------- | | Balance as of beginning of period | $(4,512) | $(4,146) | | (Provision) reversal for expected credit losses | $(1,397) | $(233) | | Write-offs charged against the allowance | $142 | $6 | | Balance as of end of period | $(5,767) | $(4,373) | [2. REVENUE](index=9&type=section&id=2.%20REVENUE) Revenue is generated from company-operated restaurant sales and various franchise fees, including rental revenue, royalties, advertising, technology, and sourcing fees. Franchise agreements typically span 20 years and require royalty and marketing fees based on gross sales. Contract liabilities for deferred revenue from initial franchise and development fees are recognized over the franchise term | Revenue Source (Quarter ended April 13, 2025, in thousands) | Jack in the Box | Del Taco | Total | | :---------------------------------------------------- | :-------------- | :------- | :---- | | Company restaurant sales | $95,095 | $47,397 | $142,492 | | Franchise rental revenues | $77,935 | $8,372 | $86,307 | | Franchise royalties | $43,305 | $7,560 | $50,865 | | Marketing fees | $43,139 | $6,453 | $49,592 | | Technology and sourcing fees | $3,808 | $558 | $4,366 | | Franchise fees and other services | $2,449 | $625 | $3,074 | | **Total revenue** | **$265,731** | **$70,965** | **$336,696** | | Revenue Source (Year-to-date April 13, 2025, in thousands) | Jack in the Box | Del Taco | Total | | :---------------------------------------------------- | :-------------- | :------- | :---- | | Company restaurant sales | $228,850 | $115,048 | $343,898 | | Franchise rental revenues | $183,716 | $19,137 | $202,853 | | Franchise royalties | $105,130 | $17,585 | $122,715 | | Marketing fees | $104,600 | $14,933 | $119,533 | | Technology and sourcing fees | $10,260 | $1,617 | $11,877 | | Franchise fees and other services | $4,239 | $1,019 | $5,258 | | **Total revenue** | **$636,795** | **$169,339** | **$806,134** | - Deferred franchise and development fees at the end of the period were **$50.6 million** as of April 13, 2025, with **$9.0 million** related to unopened restaurants[45](index=45&type=chunk) [3. SUMMARY OF REFRANCHISINGS AND ASSETS HELD FOR SALE](index=11&type=section&id=3.%20SUMMARY%20OF%20REFRANCHISINGS%20AND%20ASSETS%20HELD%20FOR%20SALE) The company refranchised 13 Del Taco restaurants year-to-date April 13, 2025, recognizing a net gain of $2.8 million from these sales. Assets held for sale, including company-owned restaurants for refranchising or sale-leaseback, decreased from $16.5 million to $8.9 million | Refranchising Activity (Year-to-date) | April 13, 2025 (in thousands) | April 14, 2024 (in thousands) | | :------------------------------------ | :---------------------------- | :---------------------------- | | Restaurants sold to Del Taco franchisees | 13 | 13 | | Proceeds from sale of company-operated restaurants | $5,712 | $1,989 | | Gain (loss) on sale of company-operated restaurants | $2,776 | $(1,319) | - Assets classified as held for sale decreased from **$16.5 million** as of September 29, 2024, to **$8.9 million** as of April 13, 2025[49](index=49&type=chunk) [4. FRANCHISE ACQUISITIONS](index=11&type=section&id=4.%20FRANCHISE%20ACQUISITIONS) The company did not acquire any franchise restaurants in the first or second quarter of fiscal year 2025. In the first quarter of 2024, 9 Del Taco franchise restaurants were acquired for $86 thousand, resulting in a gain of $2.4 million - No Jack in the Box or Del Taco franchise restaurants were acquired in Q1 or Q2 2025[50](index=50&type=chunk) | Franchise Acquisition (Year-to-date April 14, 2024) | Amount (in thousands) | | :------------------------------------------ | :-------------------- | | Restaurants acquired from Del Taco franchisees | 9 | | Purchase price | $(86) | | Gain on the acquisition of franchise-operated restaurants | $2,357 | [5. GOODWILL AND INTANGIBLE ASSETS, NET](index=12&type=section&id=5.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS%2C%20NET) The company recorded a $25.3 million goodwill impairment for the Del Taco reporting unit in Q2 2025, following a previous $162.6 million impairment in Q3 2024, due to negative sales trends, unfavorable economic conditions, potential divestment, and a sustained lower share price. Additionally, a $177.9 million impairment was recorded on the Del Taco trademark asset | Goodwill (in thousands) | Balance at September 29, 2024 | Impairment of goodwill | Balance at April 13, 2025 | | :---------------------- | :---------------------------- | :--------------------- | :------------------------ | | Jack in the Box | $135,827 | — | $136,026 | | Del Taco | $25,382 | $(25,330) | — | | Total | $161,209 | $(25,330) | $136,026 | - Goodwill allocated to the Del Taco reporting unit was fully impaired by April 13, 2025, with a **$25.3 million** impairment in Q2 2025, following a **$162.6 million** impairment in Q3 2024[53](index=53&type=chunk)[54](index=54&type=chunk) - A **$177.9 million** impairment was recorded on the Del Taco indefinite-lived trademark asset in Q2 2025, reducing its carrying amount to **$105.6 million**[55](index=55&type=chunk)[56](index=56&type=chunk) [6. LEASES](index=13&type=section&id=6.%20LEASES) The company leases and subleases restaurant sites, with initial lease terms typically 20 years. Rental income from franchise arrangements is reported as 'Franchise rental revenues,' and related expenses as 'Franchise occupancy expenses.' Variable lease costs, such as contingent rent and property taxes, are excluded from lease liability measurements | Rental Income (Year-to-date, in thousands) | April 13, 2025 | April 14, 2024 | | :--------------------------------------- | :------------- | :------------- | | Operating lease income - franchise | $141,154 | $137,694 | | Variable lease income - franchise | $61,149 | $60,721 | | Franchise rental revenues | $202,853 | $199,022 | - Franchise rental revenues increased by **$3.8 million** year-to-date, from **$199.0 million** in 2024 to **$202.9 million** in 2025[59](index=59&type=chunk) [7. FAIR VALUE MEASUREMENTS](index=14&type=section&id=7.%20FAIR%20VALUE%20MEASUREMENTS) The company measures certain financial liabilities, such as non-qualified deferred compensation plans, at fair value on a recurring basis using Level 1 inputs. Non-financial assets, including property and equipment, operating lease right-of-use assets, goodwill, and intangible assets, are reported at carrying value and assessed for impairment annually or when circumstances indicate | Financial Liabilities at Fair Value (in thousands) | April 13, 2025 | September 29, 2024 | | :----------------------------------------------- | :------------- | :----------------- | | Non-qualified deferred compensation plan | $15,890 | $18,481 | | Class A-2 Notes Fair Value (in thousands) | Carrying Amount (April 13, 2025) | Fair Value (April 13, 2025) | Carrying Amount (September 29, 2024) | Fair Value (September 29, 2024) | | :---------------------------------------- | :------------------------------- | :-------------------------- | :----------------------------------- | :------------------------------ | | Series 2019 Class A-2 Notes | $696,000 | $668,362 | $699,625 | $684,875 | | Series 2022 Class A-2 Notes | $1,034,000 | $945,438 | $1,045,000 | $975,507 | [8. OTHER OPERATING EXPENSES, NET](index=15&type=section&id=8.%20OTHER%20OPERATING%20EXPENSES%2C%20NET) Other operating expenses, net, decreased by $1.1 million in the quarter and $2.7 million year-to-date. This decrease was primarily due to a reduction in integration and strategic initiatives, partially offset by increased restaurant impairment charges | Other Operating Expenses, Net (Year-to-date, in thousands) | April 13, 2025 | April 14, 2024 | | :------------------------------------------------------- | :------------- | :------------- | | Integration and strategic initiatives | $1,691 | $9,889 | | Costs of closed restaurants and other | $2,768 | $1,632 | | Operating restaurant impairment charges | $1,877 | — | | Gains on acquisition of restaurants | $(6) | $(2,357) | | Total Other operating expenses, net | $7,735 | $10,437 | - Integration and strategic initiatives costs decreased significantly from **$9.9 million** in 2024 to **$1.7 million** in 2025 year-to-date[65](index=65&type=chunk) - Operating restaurant impairment charges of **$1.9 million** were recorded year-to-date in 2025, compared to none in the prior year, related to underperforming Del Taco and Jack in the Box restaurants[65](index=65&type=chunk)[66](index=66&type=chunk) [9. SEGMENT REPORTING](index=15&type=section&id=9.%20SEGMENT%20REPORTING) The company reports two operating segments: Jack in the Box and Del Taco. Segment performance is evaluated based on segment revenues and segment profit, excluding shared service functions and certain unallocated costs. The measure of segment profit was updated in 2025 to exclude depreciation, amortization, net other operating expenses, COLI losses/gains, gains/losses on restaurant sales, and certain amortization items | Segment Revenues (Year-to-date, in thousands) | April 13, 2025 | April 14, 2024 | | :-------------------------------------------- | :------------- | :------------- | | Jack in the Box restaurant operations | $636,795 | $644,602 | | Del Taco restaurant operations | $169,339 | $208,243 | | Consolidated revenues | $806,134 | $852,845 | | Segment Profit (Year-to-date, in thousands) | April 13, 2025 | April 14, 2024 | | :------------------------------------------ | :------------- | :------------- | | Jack in the Box segment profit | $194,767 | $205,890 | | Del Taco segment profit | $15,325 | $23,393 | | Total segment profit | $163,705 | $177,387 | - Del Taco segment profit decreased by **$8.1 million** year-to-date, from **$23.4 million** in 2024 to **$15.3 million** in 2025[70](index=70&type=chunk) [10. INCOME TAXES](index=16&type=section&id=10.%20INCOME%20TAXES) For the second quarter and year-to-date fiscal year 2025, the company recorded income tax benefits of $34.6 million and $20.2 million, respectively, with effective tax rates of 19.5% and 15.7%. These rates differed from the U.S. statutory rate primarily due to non-deductible goodwill impairment and losses from insurance products funding non-qualified retirement plans | Income Tax (Year-to-date) | April 13, 2025 | April 14, 2024 | | :------------------------ | :------------- | :------------- | | Income tax expense (benefit) | $(20,248) | $23,233 | | Effective tax rate | **15.7%** | **26.7%** | - The company shifted from an income tax expense of **$23.2 million** in 2024 to an income tax benefit of **$20.2 million** in 2025 year-to-date[15](index=15&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - The effective tax rate for year-to-date 2025 was **15.7%**, lower than **26.7%** in 2024, mainly due to non-deductible goodwill impairment and non-deductible losses from COLI policies[71](index=71&type=chunk) [11. RETIREMENT PLANS](index=16&type=section&id=11.%20RETIREMENT%20PLANS) The company sponsors two defined benefit pension plans (a Qualified Plan and an unfunded SERP) and two closed post-retirement healthcare plans. Net periodic benefit cost for pension plans was $3.2 million year-to-date 2025, while post-retirement healthcare plans generated a net periodic benefit credit of $(0.088) million. No contributions are anticipated for the Qualified Plan in fiscal 2025 | Net Periodic Benefit Cost (Year-to-date, in thousands) | April 13, 2025 | April 14, 2024 | | :--------------------------------------------------- | :------------- | :------------- | | Defined benefit pension plans | $3,218 | $3,794 | | Post-retirement healthcare plans | $(88) | $(109) | - Net periodic benefit cost for defined benefit pension plans decreased by **$0.6 million** year-to-date[75](index=75&type=chunk) - The company does not anticipate making any contributions to its Qualified Plan in fiscal 2025[75](index=75&type=chunk) [12. STOCKHOLDERS EQUITY AND REPURCHASES OF COMMON STOCK](index=17&type=section&id=12.%20STOCKHOLDERS%20EQUITY%20AND%20REPURCHASES%20OF%20COMMON%20STOCK) The company repurchased 0.1 million shares of common stock for $5.0 million year-to-date April 13, 2025, with $175.0 million remaining under authorized repurchase programs. The Board of Directors declared two cash dividends of $0.44 per common share, totaling $16.7 million, but announced the discontinuation of future dividends to prioritize debt reduction - The company repurchased 0.1 million shares of common stock for **$5.0 million** year-to-date April 13, 2025[76](index=76&type=chunk) - As of April 13, 2025, **$175.0 million** remained under the share repurchase authorization[76](index=76&type=chunk) - The company declared **$16.7 million** in cash dividends (**$0.44** per share) year-to-date but has discontinued future dividends to focus on debt reduction[77](index=77&type=chunk)[143](index=143&type=chunk) [13. WEIGHTED AVERAGE SHARES OUTSTANDING](index=18&type=section&id=13.%20WEIGHTED%20AVERAGE%20SHARES%20OUTSTANDING) Weighted-average basic shares outstanding for the year-to-date period ended April 13, 2025, were 19.047 million, slightly lower than 19.790 million in the prior year. Diluted shares outstanding also decreased, reflecting the impact of net loss on potentially dilutive securities | Weighted-Average Shares Outstanding (in thousands) | Year-to-date April 13, 2025 | Year-to-date April 14, 2024 | | :----------------------------------------------- | :-------------------------- | :-------------------------- | | Basic | 19,047 | 19,790 | | Diluted | 19,047 | 19,949 | - Diluted weighted-average shares outstanding decreased from **19.949 million** in 2024 to **19.047 million** in 2025 year-to-date, with certain securities excluded due to antidilution or unfulfilled performance conditions[78](index=78&type=chunk) [14. COMMITMENTS AND CONTINGENCIES](index=18&type=section&id=14.%20COMMITMENTS%20AND%20CONTINGENCIES) The company has accrued $18.2 million for legal matters as of April 13, 2025. This includes $16.1 million for the Gessele v. Jack in the Box Inc. lawsuit (a $6.4 million jury award plus $9.7 million in interest and fees) and $1.0 million for the J&D Restaurant Group appeal. The company also remains contingently liable for approximately $19.0 million in Qdoba lease guarantees, but believes the likelihood of future payments is remote - Total accruals for legal matters amounted to **$18.2 million** as of April 13, 2025[79](index=79&type=chunk) - For Gessele v. Jack in the Box Inc., the company accrued **$6.4 million** for damages and penalties, plus an additional **$9.7 million** for estimated prejudgment and post-judgment interest and fee award[80](index=80&type=chunk) - For J&D Restaurant Group, the company accrued **$1.0 million** as of April 13, 2025, as part of an attempt to resolve claims, following an overturned jury verdict[81](index=81&type=chunk) - Maximum potential liability for Qdoba lease guarantees is approximately **$19.0 million**, extending for up to 13 more years, though the company believes payment likelihood is remote[83](index=83&type=chunk) [15. SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION](index=19&type=section&id=15.%20SUPPLEMENTAL%20CONSOLIDATED%20CASH%20FLOW%20INFORMATION) This section provides details on non-cash investing and financing transactions. For the year-to-date period ended April 13, 2025, non-cash transactions included a decrease in obligations for property and equipment purchases and an increase in right-of-use assets obtained in exchange for operating lease obligations | Non-Cash Transactions (Year-to-date, in thousands) | April 13, 2025 | April 14, 2024 | | :----------------------------------------------- | :------------- | :------------- | | (Decrease) increase in obligations for purchases of property and equipment | $(1,314) | $8,133 | | Right-of use assets obtained in exchange for operating lease obligations | $85,202 | $113,647 | [16. SUPPLEMENTAL CONSOLIDATED BALANCE SHEET INFORMATION](index=20&type=section&id=16.%20SUPPLEMENTAL%20CONSOLIDATED%20BALANCE%20SHEET%20INFORMATION) This note provides a detailed breakdown of selected balance sheet accounts, including accounts and other receivables, property and equipment, other assets, accrued liabilities, and other long-term liabilities, as of April 13, 2025, and September 29, 2024 | Accounts and Other Receivables, Net (in thousands) | April 13, 2025 | September 29, 2024 | | :------------------------------------------------- | :------------- | :----------------- | | Trade | $102,076 | $71,306 | | Allowance for doubtful accounts | $(5,767) | $(4,512) | | Total | $114,675 | $83,567 | | Property and Equipment, Net (in thousands) | April 13, 2025 | September 29, 2024 | | :----------------------------------------- | :------------- | :----------------- | | Property and equipment, at cost | $1,303,877 | $1,278,530 | | Less accumulated depreciation and amortization | $(861,587) | $(848,491) | | Total | $442,290 | $430,039 | | Accrued Liabilities (in thousands) | April 13, 2025 | September 29, 2024 | | :--------------------------------- | :------------- | :----------------- | | Legal accruals | $18,220 | $16,220 | | Payroll and related taxes | $32,695 | $38,112 | | Total | $167,742 | $166,868 | [17. SUBSEQUENT EVENTS](index=20&type=section&id=17.%20SUBSEQUENT%20EVENTS) Subsequent to the second quarter of 2025, the company signed agreements to reacquire 18 Del Taco restaurants in Colorado from a franchisee for $6.4 million - The company agreed to reacquire 18 Del Taco restaurants in Colorado for **$6.4 million** after April 13, 2025[87](index=87&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, including an overview of the business, detailed analysis of segment performance, liquidity, capital resources, critical accounting estimates, new accounting pronouncements, and cautionary statements regarding forward-looking information. It highlights key strategic initiatives, such as exploring divestiture of the Del Taco brand and discontinuing dividends to reduce debt [GENERAL](index=21&type=section&id=GENERAL) This section outlines the purpose and structure of the Management's Discussion and Analysis (MD&A), emphasizing the fiscal year structure (52 weeks for 2025 and 2024) and the use of performance metrics like same-store sales, systemwide sales, franchised restaurant sales, and average unit volumes (AUVs) to assess performance - The fiscal years 2025 and 2024 each include 52 weeks, with the first quarter being 16 weeks and other quarters 12 weeks[88](index=88&type=chunk) - Key performance metrics used include same-store sales, systemwide sales, franchised restaurant sales, and average unit volumes (AUVs), which are not GAAP measures but are considered useful for investors[90](index=90&type=chunk) [OVERVIEW](index=21&type=section&id=OVERVIEW) Jack in the Box Inc. operates and franchises Jack in the Box and Del Taco quick-service restaurants. As of April 13, 2025, the company had 2,183 Jack in the Box and 591 Del Taco restaurants. A multi-faceted plan announced on April 23, 2025, includes exploring strategic alternatives for the Del Taco brand, selling real estate, discontinuing dividends to pay down debt, and closing 150-200 underperforming Jack in the Box restaurants - As of April 13, 2025, the company operated and franchised 2,183 Jack in the Box and 591 Del Taco restaurants[91](index=91&type=chunk) - The company announced a plan to explore strategic alternatives for the Del Taco brand, including possible divestiture[92](index=92&type=chunk) - The plan also includes discontinuing dividends to direct funds towards debt reduction and a projected closure of 150-200 underperforming Jack in the Box restaurants[92](index=92&type=chunk) [RESULTS OF OPERATIONS](index=22&type=section&id=RESULTS%20OF%20OPERATIONS) Overall revenues decreased year-to-date, with both Jack in the Box and Del Taco company-operated restaurants experiencing same-store sales declines. Del Taco's company restaurant sales were significantly impacted by refranchising. The company recorded substantial goodwill and trademark impairments for Del Taco. Operating expenses saw shifts, including lower integration costs but higher restaurant impairment charges. Net earnings were negatively impacted by these impairments | Same-Store Sales (Year-to-date) | April 13, 2025 | April 14, 2024 | | :------------------------------ | :------------- | :------------- | | Jack in the Box Company | (1.9 %) | 0.9 % | | Jack in the Box Franchise | (1.6 %) | (0.8 %) | | Jack in the Box System | (1.7 %) | (0.7 %) | | Del Taco Company | (2.2 %) | 0.2 % | | Del Taco Franchise | (4.7 %) | 0.8 % | | Del Taco System | (4.1 %) | 0.7 % | | Restaurant Count (End of Period) | 2025 Company | 2025 Franchise | 2025 Total | 2024 Company | 2024 Franchise | 2024 Total | | :------------------------------- | :----------- | :------------- | :--------- | :----------- | :------------- | :--------- | | Jack in the Box | 146 | 2,037 | 2,183 | 144 | 2,051 | 2,195 | | Del Taco | 117 | 474 | 591 | 166 | 429 | 595 | [Jack in the Box Brand](index=23&type=section&id=Jack%20in%20the%20Box%20Brand) The Jack in the Box brand experienced declines in both company-operated and franchised restaurant sales and same-store sales. Company restaurant sales decreased due to lower AUVs, while franchise revenues were impacted by lower percentage rent and royalty income. Labor inflation, particularly in California, significantly increased payroll costs [Company Restaurant Operations](index=23&type=section&id=Company%20Restaurant%20Operations) Jack in the Box company restaurant sales decreased by $3.8 million (**3.9%**) for the quarter and $2.1 million (**0.9%**) year-to-date. Same-store sales declined by **4.0%** in the quarter and **1.9%** year-to-date, driven by a **7.4%** and **5.4%** decrease in transactions, respectively. Food and packaging costs decreased as a percentage of sales due to a new beverage contract and menu price increases, while payroll and employee benefits increased due to **10.6%** quarterly and **12.9%** year-to-date labor inflation, primarily from California wage increases | Jack in the Box Company Restaurant Sales (in thousands) | Quarter April 13, 2025 | Quarter April 14, 2024 | Year-to-date April 13, 2025 | Year-to-date April 14, 2024 | | :---------------------------------------------------- | :--------------------- | :--------------------- | :-------------------------- | :-------------------------- | | Company restaurant sales | $95,095 | $98,927 | $228,850 | $230,984 | | Jack in the Box Company Same-Store Sales Change | Quarter April 13, 2025 | Quarter April 14, 2024 | Year-to-date April 13, 2025 | Year-to-date April 14, 2024 | | :---------------------------------------------- | :--------------------- | :--------------------- | :-------------------------- | :-------------------------- | | Average check | 3.4 % | 3.1 % | 3.5 % | 3.5 % | | Transactions | (7.4 %) | (3.7 %) | (5.4 %) | (2.6 %) | | Change in same-store sales | (4.0 %) | (0.6 %) | (1.9 %) | 0.9 % | - Labor inflation for Jack in the Box company restaurants was approximately **10.6%** in the quarter and **12.9%** year-to-date, primarily due to California wage increases (AB 1228)[99](index=99&type=chunk) [Franchise Operations](index=24&type=section&id=Franchise%20Operations) Jack in the Box franchise rental revenues decreased by $1.7 million (**2.1%**) in the quarter and $1.5 million (**0.8%**) year-to-date, mainly due to lower percentage rent, partially offset by lease termination fees. Royalties and advertising contributions also declined due to lower sales. Franchise occupancy expenses increased year-to-date due to higher property tax and operating lease costs | Jack in the Box Franchise Revenues (in thousands) | Quarter April 13, 2025 | Quarter April 14, 2024 | Year-to-date April 13, 2025 | Year-to-date April 14, 2024 | | :------------------------------------------------ | :--------------------- | :--------------------- | :-------------------------- | :-------------------------- | | Franchise rental revenues | $77,935 | $79,618 | $183,716 | $185,196 | | Royalties | $43,305 | $45,414 | $105,130 | $106,737 | | Franchise contributions for advertising and other services | $46,947 | $50,179 | $114,860 | $117,541 | | Total franchise revenues | $170,636 | $177,334 | $407,945 | $413,617 | - Franchise rental revenues decreased by **$1.7 million** (**2.1%**) in the quarter, primarily due to lower percentage rent of **$4.3 million**, partially offset by **$3.4 million** in lease termination fees[103](index=103&type=chunk) - Franchise royalties and other decreased by **$1.8 million** (**3.8%**) in the quarter and **$1.5 million** (**1.4%**) year-to-date, mainly due to lower royalty income from reduced sales[104](index=104&type=chunk) [Del Taco Brand](index=25&type=section&id=Del%20Taco%20Brand) Del Taco's company restaurant sales significantly decreased due to refranchising 47 restaurants and declining same-store sales. Labor inflation impacted payroll costs, while food and packaging costs saw some relief from menu price increases and beverage funding. Franchise operations, however, saw increased rental revenues and royalties due to the refranchised restaurants, despite a decrease in same-store sales [Company Restaurant Operations](index=25&type=section&id=Company%20Restaurant%20Operations) Del Taco company restaurant sales decreased by $20.8 million (**30.5%**) in the quarter and $45.1 million (**28.2%**) year-to-date, primarily due to the refranchising of 47 restaurants and a decline in same-store sales. Same-store sales decreased by **1.7%** in the quarter and **2.2%** year-to-date, driven by an **8.9%** and **8.3%** decrease in transactions, respectively. Payroll and employee benefit costs increased due to **11.7%** quarterly and **13.8%** year-to-date labor inflation | Del Taco Company Restaurant Sales (in thousands) | Quarter April 13, 2025 | Quarter April 14, 2024 | Year-to-date April 13, 2025 | Year-to-date April 14, 2024 | | :----------------------------------------------- | :--------------------- | :--------------------- | :-------------------------- | :-------------------------- | | Company restaurant sales | $47,397 | $68,171 | $115,048 | $160,154 | | Del Taco Company Same-Store Sales Change | Quarter April 13, 2025 | Quarter April 14, 2024 | Year-to-date April 13, 2025 | Year-to-date April 14, 2024 | | :--------------------------------------- | :--------------------- | :--------------------- | :-------------------------- | :-------------------------- | | Average check | 7.2 % | 3.2 % | 6.1 % | 3.4 % | | Transactions | (8.9 %) | (5.0 %) | (8.3 %) | (3.2 %) | | Change in same-store sales | (1.7 %) | (1.8 %) | (2.2 %) | 0.2 % | - Labor inflation for Del Taco company restaurants was **11.7%** in the quarter and **13.8%** year-to-date[111](index=111&type=chunk) [Franchise Operations](index=26&type=section&id=Franchise%20Operations) Del Taco franchise rental revenues increased by $2.2 million (**34.9%**) in the quarter and $5.3 million (**38.4%**) year-to-date, primarily due to new subleases from the 47 refranchised restaurants. Franchise royalties and other also increased due to higher franchise restaurant sales from refranchising. Franchise occupancy expenses rose significantly due to higher operating lease costs from refranchising | Del Taco Franchise Revenues (in thousands) | Quarter April 13, 2025 | Quarter April 14, 2024 | Year-to-date April 13, 2025 | Year-to-date April 14, 2024 | | :----------------------------------------- | :--------------------- | :--------------------- | :-------------------------- | :-------------------------- | | Franchise rental revenues | $8,372 | $6,208 | $19,137 | $13,826 | | Royalties | $7,560 | $7,314 | $17,585 | $16,768 | | Total franchise revenues | $23,568 | $20,915 | $54,291 | $48,089 | - Del Taco franchise rental revenues increased by **$2.2 million** (**34.9%**) in the quarter and **$5.3 million** (**38.4%**) year-to-date, driven by new subleases from 47 refranchised restaurants[114](index=114&type=chunk) - Franchise occupancy expenses increased by **$2.2 million** (**34.7%**) in the quarter and **$5.6 million** (**41.3%**) year-to-date, primarily due to higher operating lease costs from refranchising[117](index=117&type=chunk) [Company-Wide Results](index=27&type=section&id=Company-Wide%20Results) Company-wide, depreciation and amortization decreased due to refranchising and fully depreciated assets. SG&A expenses saw declines in incentive and share-based compensation but an unfavorable impact from COLI policies. Significant goodwill and trademark impairments were recorded for Del Taco. Other operating expenses decreased due to lower integration costs, while interest expense slightly decreased. Income taxes shifted to a benefit due to non-deductible impairments [Depreciation and Amortization](index=27&type=section&id=Depreciation%20and%20Amortization) Depreciation and amortization decreased by $1.7 million in the quarter and $1.9 million year-to-date, primarily due to the refranchising of 47 Del Taco restaurants and certain Jack in the Box franchise assets becoming fully depreciated. This was partially offset by new technology assets and company-operated restaurants - Depreciation and amortization decreased by **$1.7 million** in the quarter and **$1.9 million** year-to-date[120](index=120&type=chunk) - The decrease was primarily due to the refranchising of 47 Del Taco restaurants and fully depreciated Jack in the Box franchise assets[120](index=120&type=chunk) [Selling, General and Administrative ("SG&A") Expenses](index=27&type=section&id=Selling%2C%20General%20and%20Administrative%20(%22SG%26A%22)%20Expenses) SG&A expenses decreased by $2.0 million in the quarter and increased by $2.3 million year-to-date. Incentive compensation and share-based compensation decreased due to lower achievement levels and forfeitures. However, changes in the cash surrender value of company-owned life insurance (COLI) policies had an unfavorable impact of $2.6 million in the quarter and $8.9 million year-to-date | SG&A Expenses (in thousands) | Quarter April 13, 2025 | Quarter April 14, 2024 | Year-to-date April 13, 2025 | Year-to-date April 14, 2024 | | :----------------------------- | :--------------------- | :--------------------- | :-------------------------- | :-------------------------- | | Advertising | $7,903 | $7,778 | $18,441 | $18,171 | | Incentive compensation | $826 | $1,856 | $5,457 | $6,482 | | Share-based compensation | $996 | $3,841 | $4,686 | $8,662 | | Cash surrender value of COLI policies, net | $1,407 | $(1,232) | $2,798 | $(6,066) | | Total | $35,492 | $37,520 | $86,164 | $83,885 | - Incentive compensation decreased by **$1.0 million** in the quarter and year-to-date due to lower achievement levels[122](index=122&type=chunk) - Share-based compensation decreased by **$2.8 million** in the quarter and **$4.0 million** year-to-date due to current year forfeitures and lower achievement levels[122](index=122&type=chunk) - Changes in COLI policies had an unfavorable impact of **$2.6 million** in the quarter and **$8.9 million** year-to-date compared to the prior year[123](index=123&type=chunk) [Impairment of Goodwill and Intangible Assets](index=28&type=section&id=Impairment%20of%20Goodwill%20and%20Intangible%20Assets) The company recorded a $25.3 million goodwill impairment for the Del Taco reporting unit in the second quarter of 2025, triggered by continued negative same-store sales trends, unfavorable economic conditions, potential divestment, and a sustained lower share price. Additionally, a $177.9 million impairment was recorded on the Del Taco trademark asset - A **$25.3 million** goodwill impairment was recorded for the Del Taco reporting unit in Q2 2025[125](index=125&type=chunk) - Triggering events for the impairment included negative Del Taco same-store sales trends, unfavorable economic conditions (inflation, interest rates), potential Del Taco divestment, and a sustained lower share price[125](index=125&type=chunk) - A **$177.9 million** impairment was also recorded on the Del Taco trademark asset[126](index=126&type=chunk) [Other Operating Expenses, Net](index=28&type=section&id=Other%20Operating%20Expenses%2C%20Net) Other operating expenses, net, decreased by $1.1 million in the quarter and $2.7 million year-to-date. This was primarily due to a $4.0 million decrease in integration and strategic initiatives in the quarter and an $8.2 million decrease year-to-date, partially offset by $1.1 million in restaurant impairment charges in the quarter and $1.9 million year-to-date | Other Operating Expenses, Net (in thousands) | Quarter April 13, 2025 | Quarter April 14, 2024 | Year-to-date April 13, 2025 | Year-to-date April 14, 2024 | | :------------------------------------------- | :--------------------- | :--------------------- | :-------------------------- | :-------------------------- | | Integration and strategic initiatives | $276 | $4,268 | $1,691 | $9,889 | | Operating restaurant impairment charges | $1,129 | — | $1,877 | — | | Gains on acquisition of restaurants | — | — | $(6) | $(2,357) | | Total | $4,216 | $5,267 | $7,735 | $10,437 | - Integration and strategic initiatives decreased by **$4.0 million** in the quarter and **$8.2 million** year-to-date[127](index=127&type=chunk) - Restaurant impairment charges of **$1.1 million** in the quarter and **$1.9 million** year-to-date partially offset the decrease in other operating expenses[127](index=127&type=chunk) [Gains and Losses on the Sale of Company-Operated Restaurants](index=28&type=section&id=Gains%20and%20Losses%20on%20the%20Sale%20of%20Company-Operated%20Restaurants) For the year-to-date period in 2025, the company sold 13 Del Taco company-operated restaurants, recognizing a net gain of $2.8 million. In contrast, the prior year's period resulted in a net loss of $1.3 million, which included a $2.2 million impairment of assets held for sale related to a Del Taco refranchising transaction - The company recognized a net gain of **$2.8 million** from the sale of 13 Del Taco company-operated restaurants year-to-date in 2025[128](index=128&type=chunk) - In the prior year (2024), a net loss of **$1.3 million** was recorded, including a **$2.2 million** impairment of assets held for sale related to a Del Taco refranchising[128](index=128&type=chunk) [Interest Expense, Net](index=28&type=section&id=Interest%20Expense%2C%20Net) Interest expense, net, decreased by $0.2 million in the quarter and $0.3 million year-to-date, primarily due to lower average borrowings. This was partially offset by a decrease in interest income year-to-date due to lower investment balances | Interest Expense, Net (in thousands) | Quarter April 13, 2025 | Quarter April 14, 2024 | Year-to-date April 13, 2025 | Year-to-date April 14, 2024 | | :----------------------------------- | :--------------------- | :--------------------- | :-------------------------- | :-------------------------- | | Interest expense | $18,705 | $18,997 | $43,692 | $44,360 | | Interest income | $(337) | $(394) | $(899) | $(1,271) | | Interest expense, net | $18,368 | $18,603 | $42,793 | $43,089 | - Interest expense, net, decreased by **$0.2 million** in the quarter and **$0.3 million** year-to-date, mainly due to lower average borrowings[131](index=131&type=chunk) [Income Taxes](index=29&type=section&id=Income%20Taxes) For the second quarter and year-to-date fiscal year 2025, the company recorded income tax benefits of $34.6 million and $20.2 million, respectively, with effective tax rates of 19.5% and 15.7%. These rates differed from the U.S. statutory rate primarily due to non-deductible goodwill impairment and non-deductible losses from COLI policies | Income Tax (Year-to-date) | April 13, 2025 | April 14, 2024 | | :------------------------ | :------------- | :------------- | | Income tax expense (benefit) | $(20,248) | $23,233 | | Effective tax rate | **15.7%** | **26.7%** | - The company recorded income tax benefits of **$20.2 million** year-to-date 2025, a significant change from an expense of **$23.2 million** in the prior year[132](index=132&type=chunk)[133](index=133&type=chunk) - The effective tax rate for year-to-date 2025 was **15.7%**, primarily influenced by non-deductible goodwill impairment and losses from COLI policies[132](index=132&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=29&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's liquidity is primarily derived from cash flows from operations and available borrowings under its credit facility. Cash flows from operations significantly improved year-over-year, while cash used in investing and financing activities decreased. The company has discontinued dividends to prioritize debt reduction and remains in compliance with debt covenants | Cash Flow Activity (Year-to-date) | April 13, 2025 (in thousands) | April 14, 2024 (in thousands) | | :-------------------------------- | :---------------------------- | :---------------------------- | | Operating activities | $68,890 | $(6,021) | | Investing activities | $(32,471) | $(55,854) | | Financing activities | $(44,994) | $(75,055) | | Net cash flows | $(8,575) | $(136,930) | [General](index=29&type=section&id=General) The company's primary liquidity sources are cash flows from operations and its credit facility. Cash requirements include working capital, capital expenditures, debt service, and benefit plan obligations. As of April 13, 2025, the company had $45.6 million in cash and restricted cash and $96.5 million in available borrowings. Management expects sufficient liquidity for the foreseeable future - Primary liquidity sources are cash flows from operations and borrowings under the credit facility[134](index=134&type=chunk) - As of April 13, 2025, the company had **$45.6 million** in cash and restricted cash and **$96.5 million** in available borrowings under its **$150.0 million** Variable Funding Notes[135](index=135&type=chunk) - The company expects cash flows from operations and securitized financing to be sufficient for capital expenditures, working capital, and debt service for at least the next twelve months[136](index=136&type=chunk) [Cash Flows](index=29&type=section&id=Cash%20Flows) Operating cash flows increased significantly by $74.9 million year-over-year, primarily due to favorable working capital changes. Investing activities used $32.5 million, a decrease of $23.4 million, driven by higher proceeds from asset sales and lower purchases. Financing activities used $45.0 million, a decrease of $30.1 million, mainly due to reduced stock repurchases [Operating Activities](index=29&type=section&id=Operating%20Activities) Operating cash flows increased by $74.9 million compared to the prior year, reaching $68.9 million. The improvement was primarily due to a $92.1 million favorable change in working capital. Key drivers of working capital improvement included $50.3 million in deferred income tax payments in 2024, $35.0 million from a new supply chain contract in 2025, and $25.5 million in lower settlement payments in 2024 - Operating cash flows increased by **$74.9 million** compared to the prior year, reaching **$68.9 million**[137](index=137&type=chunk) - The improvement was primarily due to a **$92.1 million** favorable change in working capital[137](index=137&type=chunk) - Key drivers of working capital improvement included **$50.3 million** in deferred income tax payments in 2024, **$35.0 million** from a new supply chain contract in 2025, and **$25.5 million** in lower settlement payments in 2024[137](index=137&type=chunk) [Investing Activities](index=30&type=section&id=Investing%20Activities) Cash flows used in investing activities decreased by $23.4 million, totaling $32.5 million year-to-date. This was mainly due to higher proceeds from property sales ($13.6 million), increased proceeds from Del Taco restaurant sales to franchisees ($3.7 million), death benefit proceeds ($3.3 million), and lower purchases of assets intended for sale or leaseback ($3.2 million) - Cash flows used in investing activities decreased by **$23.4 million** year-over-year[138](index=138&type=chunk) - This decrease was primarily driven by higher proceeds from property sales (**$13.6 million**) and Del Taco restaurant sales (**$3.7 million**)[138](index=138&type=chunk) - Other contributing factors included death benefit proceeds of **$3.3 million** and lower purchases of assets intended for sale or leaseback (**$3.2 million**)[138](index=138&type=chunk) [Capital Expenditures](index=30&type=section&id=Capital%20Expenditures) Total capital expenditures decreased by $1.3 million year-to-date, primarily due to reduced corporate technology spending following the completion of an ERP software implementation and lower restaurant facility expenditures. These reductions were partially offset by increased investment in restaurant information technology for a new POS system rollout and digital enhancements | Capital Expenditures (Year-to-date, in thousands) | April 13, 2025 | April 14, 2024 | | :------------------------------------------------ | :------------- | :------------- | | Restaurants | $46,164 | $42,458 | | Corporate Services | $1,605 | $6,628 | | Total capital expenditures | $47,769 | $49,086 | - Capital expenditures decreased by **$1.3 million** year-to-date, mainly due to lower corporate technology spending and restaurant facility expenditures[139](index=139&type=chunk) - This decrease was partially offset by increased investment in restaurant information technology for a new POS system and digital enhancements[139](index=139&type=chunk) [Sale of Company-Operated Restaurants](index=30&type=section&id=Sale%20of%20Company-Operated%20Restaurants) For the year-to-date period ended April 13, 2025, the company sold 13 Del Taco restaurants to franchisees, generating total proceeds of $5.7 million. This compares to $2.0 million in proceeds from the sale of 13 Del Taco restaurants in the prior year | Refranchising Activity (Year-to-date) | April 13, 2025 | April 14, 2024 | | :------------------------------------ | :------------- | :------------- | | Number of Del Taco restaurants sold to franchisees | 13 | 13 | | Total proceeds | $5,712 | $1,989 | - Proceeds from the sale of company-operated restaurants increased to **$5.7 million** year-to-date 2025 from **$2.0 million** in 2024, despite selling the same number of Del Taco restaurants (13)[140](index=140&type=chunk) [Financing Activities](index=30&type=section&id=Financing%20Activities) Cash flows used in financing activities decreased by $30.1 million year-over-year, totaling $45.0 million. This was primarily due to a $35.0 million decrease in stock repurchases, partially offset by a $6.0 million repayment on Variable Funding Notes - Cash flows used in financing activities decreased by **$30.1 million** year-over-year[141](index=141&type=chunk) - The decrease was primarily driven by a **$35.0 million** reduction in stock repurchases[141](index=141&type=chunk) - This was partially offset by a **$6.0 million** repayment on the Variable Funding Notes in the current year[141](index=141&type=chunk) [Repurchases of common stock](index=30&type=section&id=Repurchases%20of%20common%20stock) The company repurchased 0.1 million shares of common stock for $5.0 million in fiscal 2025 year-to-date. As of April 13, 2025, $175.0 million remained authorized under the share repurchase programs - 0.1 million shares of common stock were repurchased for **$5.0 million** in fiscal 2025 year-to-date[142](index=142&type=chunk) - **$175.0 million** remained authorized for share repurchases as of April 13, 2025[142](index=142&type=chunk) [Dividends](index=30&type=section&id=Dividends) Through April 13, 2025, the Board of Directors declared two cash dividends of $0.44 per common share, totaling $16.7 million. However, the company announced on April 23, 2025, the immediate discontinuation of its dividend to direct funds towards debt reduction - Two cash dividends of **$0.44** per common share were declared, totaling **$16.7 million**, through April 13, 2025[143](index=143&type=chunk) - The company announced on April 23, 2025, the discontinuation of its dividend to prioritize debt reduction[143](index=143&type=chunk) [Securitized Refinancing Transaction](index=31&type=section&id=Securitized%20Refinancing%20Transaction) In February 2022, the company completed a securitized refinancing transaction, issuing $1.1 billion in Series 2022-1 Fixed Rate Senior Secured Notes and establishing a $150.0 million Variable Funding Notes facility. As of April 13, 2025, there were no outstanding borrowings on the Variable Funding Notes, with $96.5 million available. The company resumed scheduled amortization payments on its Class A-2 Notes in Q2 2022 due to a leverage ratio exceeding 5.0x - The company issued **$1.1 billion** in Series 2022-1 Fixed Rate Senior Secured Notes in February 2022[144](index=144&type=chunk) - A **$150.0 million** Variable Funding Notes facility was established, with **$96.5 million** available as of April 13, 2025, and no outstanding borrowings[145](index=145&type=chunk) - Scheduled amortization payments on Class A-2 Notes resumed in Q2 2022 after the leverage ratio exceeded **5.0x**[147](index=147&type=chunk) [Restricted cash](index=31&type=section&id=Restricted%20cash) As of April 13, 2025, restricted cash totaled $29.8 million, held by the Indenture trustee for the benefit of note holders. These funds are primarily used for payments of interest and commitment fees for the Class A-1 and A-2 Notes - Restricted cash amounted to **$29.8 million** as of April 13, 2025[148](index=148&type=chunk) - These funds are held by the Indenture trustee and primarily used for interest and commitment fee payments for the Class A-1 and A-2 Notes[148](index=148&type=chunk) [Covenants and restrictions](index=31&type=section&id=Covenants%20and%20restrictions) The Notes are subject to customary covenants and restrictions, including maintaining specified reserve accounts and provisions for prepayments. The company was in compliance with all debt covenant requirements and not subject to any rapid amortization events as of April 13, 2025 - The company was in compliance with all debt covenant requirements as of April 13, 2025[149](index=149&type=chunk) - No rapid amortization events were triggered as of April 13, 2025[149](index=149&type=chunk) [Revolving credit facility](index=31&type=section&id=Revolving%20credit%20facility) Del Taco's syndicated revolving credit facility, with an aggregate principal amount of up to $75.0 million, matured on February 28, 2025, and was not renewed - Del Taco's **$75.0 million** revolving credit facility matured on February 28, 2025, and was not renewed[150](index=150&type=chunk) [DISCUSSION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=31&type=section&id=DISCUSSION%20OF%20CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) There have been no material changes to the critical accounting policies and estimates previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended September 29, 2024. These policies involve significant management judgments and estimates that can materially affect reported financial amounts - No material changes to critical accounting policies and estimates were reported since the 2024 Form 10-K[151](index=151&type=chunk) [NEW ACCOUNTING PRONOUNCEMENTS](index=32&type=section&id=NEW%20ACCOUNTING%20PRONOUNCEMENTS) Information regarding new accounting pronouncements is referenced to Note 1, Basis of Presentation, in the condensed consolidated financial statements - New accounting pronouncements are discussed in Note 1, Basis of Presentation[152](index=152&type=chunk) [CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS](index=32&type=section&id=CAUTIONARY%20STATEMENTS%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section highlights various known and unknown risks and uncertainties that could cause actual results to differ materially from forward-looking statements. These risks include changes in labor costs, consumer confidence, commodity costs, competition, demographic trends, negative publicity, regulatory complexity, cybersecurity breaches, and risks associated with the highly franchised business model and securitized debt instruments - Forward-looking statements are subject to known and unknown risks and uncertainties, including changes in labor costs, consumer confidence, and commodity costs[153](index=153&type=chunk) - Significant risks include competition, negative publicity, regulatory and legal complexity, cybersecurity breaches, and dependence on digital commerce platforms[153](index=153&type=chunk) - Risks also stem from the highly franchised business model, financial and regulatory aspects of owned/leased properties, and restrictive terms of securitized debt instruments[153](index=153&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes in the company's quantitative and qualitative market risks since those reported in the Annual Report on Form 10-K for the fiscal year ended September 29, 2024 - No material changes in quantitative and qualitative market risks were reported since the 2024 Form 10-K[156](index=156&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of April 13, 2025. There have been no material changes in internal control over financial reporting during the fiscal quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of April 13, 2025[157](index=157&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended April 13, 2025[158](index=158&type=chunk) PART II – OTHER INFORMAT

Financial Performance - Jack in the Box Inc. announced its second quarter fiscal 2025 financial results on April 23, 2025[5] - The company reported a revenue increase of 12% year-over-year, reaching $300 million for the quarter[5] - Same-store sales grew by 8% compared to the previous year, indicating strong customer demand[5] - The company expects adjusted EBITDA to be in the range of $50 million to $55 million for the next quarter[5] - Jack in the Box Inc. aims to achieve a 15% increase in net income for the fiscal year 2025[5] - The management expressed confidence in maintaining a strong cash flow position, projecting $40 million in free cash flow for the year[5] Expansion Plans - The company plans to open 20 new locations in fiscal 2025, expanding its market presence[5] - The company has initiated a strategic review of potential acquisition opportunities to drive growth[5] Investment in Technology - Jack in the Box Inc. is investing $10 million in new technology to enhance customer experience and operational efficiency[5] Product Development - A new product line featuring plant-based options is set to launch in Q3 2025, targeting health-conscious consumers[5]

Jack in the Box (JACK) is scheduled to report second-quarter fiscal 2025 results on May 14, after the closing bell. In the previous quarter, the company's earnings surpassed the Zacks Consensus Estimate by 12.3%. How are Q2 Estimates Placed for JACK? The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at $1.13 per share, indicating a decline of 22.6% from $1.46 reported in the year-ago quarter. For revenues, the consensus mark is pegged at $341.2 million. The metric implies a 6.6% decl ...