Jack in the Box(JACK) - 2025 Q3 - Quarterly Results

Executive Summary Q3 2025 Highlights 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 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] - 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] Brand Performance Jack in the Box Performance 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 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] - 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] 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 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] Operating Costs and Expenses 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][17] Income Tax Provision 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] Capital Allocation Capital Allocation 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] - The company discontinued its dividend[21] Guidance & Outlook Company-Wide Fiscal Year 2025 Guidance 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 | | :---------------------------