Financial Data and Key Metrics Changes - For Q4 2025, same-store sales for Jack in the Box declined 7.4%, with franchise same-store sales down 7.6% and company-owned same-store sales down 5.3% [19] - Jack restaurant level margin decreased by 240 basis points year-over-year to 16.1%, driven by sales deleverage, commodity inflation of 6.9%, and elevated labor costs [20] - Consolidated adjusted EBITDA for Q4 was $45.6 million, down from $65.5 million in the prior year, primarily due to lower same-store sales [26] - GAAP diluted earnings per share for Q4 was $0.30, compared to $1.12 in the prior year [27] Business Line Data and Key Metrics Changes - Jack in the Box opened 15 restaurants and closed 47 in Q4, ending the year with 2,136 restaurants [19] - Del Taco's system same-store sales declined 3.9%, with company-owned same-store sales down 3.1% and franchise same-store sales down 4.2% [24] - Del Taco restaurant level margin decreased to 6.8% from 9.3% in the prior year, primarily due to transaction declines and inflationary increases in commodities [24] Market Data and Key Metrics Changes - The Chicago market had a -130 basis point drag on overall company restaurant level margin due to elevated labor costs from new restaurant openings [21] - Franchise level margin for Jack in the Box was $62.6 million, or 38.9% of franchise revenues, compared to $70.9 million, or 40.4% a year ago [22] Company Strategy and Development Direction - The company is focused on the "Jack on Track" plan, which aims to simplify the business and strengthen the Jack in the Box brand [8] - The divestiture of Del Taco is a key step to refocus on the Jack in the Box brand and improve operational performance [8] - The company plans to enhance operational excellence and improve food quality, with a focus on consistency across operations [12] Management's Comments on Operating Environment and Future Outlook - Management expects 2026 to be a rebuilding year, with same-store sales returning to positive as operational improvements are implemented [16] - The company anticipates challenges in the first quarter of 2026 but expects improvements in the second quarter, coinciding with the 75th anniversary celebrations [39] - Management has not built in significant macroeconomic tailwinds into their guidance, expecting conditions to remain flat [60] Other Important Information - The company ended the year with total debt of $1.7 billion and a net debt to adjusted EBITDA leverage ratio of six times [28] - Capital expenditures for Q4 were $17.9 million, with cash flows from operations for the quarter at $33.7 million [28] Q&A Session Summary Question: What are the main drivers of improvement in same-store sales for 2026? - Management expects improvements to be driven by a combination of promotional strategies, operational enhancements, and softer comparisons in the second half of the year [39][40] Question: What is the assumption in the current EBITDA guidance regarding real estate sales and closures? - Management confirmed that the guidance includes block closures and anticipates $50 million to $70 million in real estate sales [41][42] Question: How is franchisee sentiment regarding the current competitive environment? - Franchisees are under pressure but remain supportive of the brand, with ongoing conversations to drive business forward [66][70] Question: What are the expectations for G&A expenses in the second half of 2026? - G&A is expected to decrease to approximately 2.3%-2.4% of system-wide sales in the second half as the company right-sizes the business [62] Question: How are value scores trending, and what is the strategy moving forward? - Value scores have improved slightly, and the company aims to maintain consistent value offerings across its menu [84][92]