Core Insights - Jack in the Box Inc. is focused on simplifying its business and reducing debt levels, with significant progress made since the completion of the Del Taco sale [1][2][24] - The company celebrated its 75th anniversary in 2026, receiving positive customer responses to anniversary promotions [1][5][12] - The first quarter results showed a decrease in same-store sales by 6.7%, attributed to a decline in transactions and sales mix, despite menu price increases [17][18] Business Strategy - The company is implementing the "Jack on Track" plan to strengthen its business model and improve long-term financial performance [24][26] - Efforts include closing underperforming restaurants, with 12 closures in the first quarter, which have generally resulted in a 30% sales benefit to nearby locations [24][25] - Capital expenditures for technology and restaurant reimages were $23.2 million in Q1, focusing on IT improvements [25] Financial Performance - Earnings from continuing operations were $14.4 million for the quarter, down from $31.0 million in the same period last year [23] - The company reported a GAAP diluted earnings per share of $0.75, compared to $1.61 in the prior year [23] - Jack's restaurant-level margin percentage decreased to 16.1%, down from 23.2%, primarily due to increased food and labor costs [18][19] Market Trends - Commodity inflation was reported at 7.1% for the quarter, significantly impacting food and packaging costs [18][50] - The company is experiencing challenges in the Chicago market, particularly with labor costs and operational efficiencies [19][35] - Franchise-level margins decreased to $84.1 million, or 38.6% of franchise revenues, compared to 40.9% a year ago [20] Customer Engagement - The launch of the 75th anniversary marketing calendar included promotions that resonated well with customers, driving sales of higher-margin items [6][7] - The company is committed to providing value to customers while maintaining profitability, with ongoing price-pointed promotions [7][8] - Jack in the Box is focusing on enhancing the guest experience through operational improvements and training initiatives [10][11] Future Outlook - The company expects steady improvement in top-line performance as it continues to execute its strategic initiatives throughout 2026 [8][28] - Jack in the Box aims to reduce total debt by an additional $200 million as part of its financial strategy [26] - The company is assessing refinancing options for upcoming debt tranches, considering market conditions and interest rates [27]

Financial Data and Key Metrics Changes - The first quarter same-store sales for Jack in the Box decreased by 6.7%, with franchise restaurant same-store sales down 7% and company-owned same-store sales down 4.7% [18] - Jack's restaurant level margin percentage decreased to 16.1%, down from 23.2% [18] - Earnings from continuing operations were $14.4 million for Q1 2026, compared to $31 million for the same quarter last year [23] - GAAP diluted earnings per share from continuing operations for Q1 was $0.75, down from $1.61 in the prior year [24] - Consolidated adjusted EBITDA was $68.2 million, down from $88.8 million in the prior year [24] Business Line Data and Key Metrics Changes - Franchise level margin was $84.1 million or 38.6% of franchise revenues, compared to $97.1 million or 40.9% a year ago [20] - SG&A for the quarter was $37 million or 10.6% of revenues, down from $41.2 million or 11.1% a year ago [20] Market Data and Key Metrics Changes - Food and packaging costs as a percentage of sales were 29.7%, increasing 380 basis points from the prior year due to commodity inflation of 7.1% [19] - Labor costs as a percentage of sales were 35.3%, increasing 200 basis points from the prior year [19] Company Strategy and Development Direction - The company is focused on simplifying the business and reducing debt, having successfully closed the sale of Del Taco and made a significant debt paydown [7][8] - The Jack On Track plan aims to bolster long-term financial performance by strengthening the balance sheet and positioning the company for sustainable growth [25] - The company is enhancing its value proposition and menu strategy, celebrating its 75th anniversary with brand activations and new product launches [13][14] Management's Comments on Operating Environment and Future Outlook - Management noted that Q1 results were choppy but broadly in line with expectations, with improvements expected as the year progresses [9][11] - The company anticipates steady improvement in top-line performance as it focuses on fundamentals essential for sustainable growth [11][16] - Management expressed confidence in the actions being taken to strengthen the business and drive long-term shareholder value [17] Other Important Information - The company expects to generate $50 million-$60 million from real estate sales by the end of fiscal year 2026, which will be used to pay down debt [27] - The effective tax rate for continuing operations for Q1 was 32.4%, compared to 30% for the same quarter a year ago [23] Q&A Session Summary Question: Trends observed in January and impact of weather - Management noted that January showed meaningful improvements, with same-store sales performing better than in Q1, despite weather impacts [32] Question: Chicago performance and labor inefficiencies - Management acknowledged ongoing challenges in Chicago due to a tough labor market and operational issues, but expressed optimism for improvements in the coming months [35][36] Question: Franchisee four-wall margins and support - Management indicated that while franchisees are facing margin pressures, they are not providing blanket assistance but are looking into specific cases [40][41] Question: Price-value equation and protecting margins - Management discussed their ability to take price increases while maintaining a strong value proposition for customers, including adjustments to bundles and portion sizes [43][45] Question: Breakfast performance relative to competitors - Management stated that breakfast remains a consistent part of their offering, with no significant changes in performance compared to other day parts [66][67] Question: Regional performance and California market challenges - Management acknowledged that California presents challenges due to labor pressures and noted that over 40% of their restaurants are located there, impacting overall performance [86]

Financial Data and Key Metrics Changes - The first quarter same-store sales for Jack in the Box decreased by 6.7%, with franchise restaurant same-store sales down 7% and company-owned same-store sales down 4.7% [17] - Jack's restaurant level margin percentage decreased to 16.1%, down from 23.2% [17] - Consolidated adjusted EBITDA was $68.2 million, down from $88.8 million in the prior year [23] - Earnings from continuing operations were $14.4 million for the first quarter of 2026, compared to $31 million for the same quarter a year ago [22] - GAAP diluted earnings per share from continuing operations for the first quarter was $0.75, compared to $1.61 in the same period of the prior year [23] Business Line Data and Key Metrics Changes - Franchise level margin was $84.1 million or 38.6% of franchise revenues, compared to $97.1 million or 40.9% a year ago [19] - There were 6 restaurant openings and 14 restaurant closures in the quarter [19] Market Data and Key Metrics Changes - Food and packaging costs as a percentage of sales were 29.7% for the quarter, increasing 380 basis points from the prior year due to commodity inflation of 7.1% [18] - Labor costs as a percentage of sales were 35.3%, increasing 200 basis points from the prior year [18] Company Strategy and Development Direction - The company is focused on simplifying the business and has made progress since the last quarter, including the sale of Del Taco and a significant paydown on debt [6][7] - The Jack OnTrack plan aims to bolster long-term financial performance by strengthening the balance sheet and positioning the company for sustainable growth [24] - The company is modernizing restaurants with cost-effective refreshes that improve curb appeal, generating modest sales lifts [14] Management's Comments on Operating Environment and Future Outlook - Management noted that Q1 results were choppy but broadly in line with expectations, with improvements starting in January [8] - The company expects steady improvement on the top line as it moves through 2026, focusing on fundamentals essential for sustainable growth [10] - Management remains confident that actions taken will lead to a stronger, more stable platform for growth [10] Other Important Information - The effective tax rate for continuing operations for the first quarter of 2026 was 32.4%, compared to 30% for the same quarter a year ago [22] - The company generated $10.9 million of proceeds from real estate sales in the first quarter, with associated gains of approximately $6.3 million [26] Q&A Session Summary Question: Trends observed in January and impact of weather - Management noted that January showed meaningful improvements, with same-store sales performing better than in Q1, even factoring in weather impacts [31] Question: Chicago performance and labor inefficiencies - Management acknowledged ongoing challenges in Chicago, citing a tough labor market and the need to dial in operations after opening multiple restaurants [34] Question: Support for franchisees amid margin pressures - Management indicated that while franchisees are facing pressure on margins, they are not providing blanket assistance but are evaluating individual cases [40] Question: Price-value equation in the current environment - Management has been able to take more price on the company side while ensuring value for customers, including lowering prices on certain bundles [44] Question: Breakfast performance relative to competitors - Breakfast has remained consistent for the company, with all-day breakfast being a core offering [65] Question: Regional performance and California market challenges - Management noted that California has been challenging, impacting both sales and profitability due to labor pressures [84]

Financial Data and Key Metrics Changes - The first quarter same-store sales for Jack in the Box decreased by 6.7%, with franchise restaurant same-store sales down 7% and company-owned same-store sales down 4.7% [16] - Jack's restaurant level margin percentage decreased to 16.1%, down from 23.2% in the prior year [16] - Earnings from continuing operations were $14.4 million for Q1 2026, compared to $31 million in the same quarter of the prior year [20] - GAAP diluted earnings per share from continuing operations was $0.75, down from $1.61 in the same period of the prior year [21] - Consolidated adjusted EBITDA was $68.2 million, down from $88.8 million in the prior year [21] Business Line Data and Key Metrics Changes - Franchise level margin was $84.1 million or 38.6% of franchise revenues, compared to $97.1 million or 40.9% a year ago [18] - There were 6 restaurant openings and 14 closures in the quarter, indicating a net decrease in restaurant count [18] Market Data and Key Metrics Changes - Food and packaging costs as a percentage of sales were 29.7%, increasing 380 basis points from the prior year due to commodity inflation of 7.1% [17] - Labor costs as a percentage of sales were 35.3%, increasing 200 basis points from the prior year, primarily due to a change in the mix of restaurants [17] Company Strategy and Development Direction - The company is focused on simplifying the business and reducing debt, having made a significant paydown of $105 million on its debt during the quarter [5][24] - The Jack on Track plan aims to bolster long-term financial performance by strengthening the balance sheet and positioning the company for sustainable growth [22] - The company is modernizing its restaurants with cost-effective refreshes that improve curb appeal, generating modest sales lifts [12] Management's Comments on Operating Environment and Future Outlook - Management noted that Q1 results were choppy but broadly in line with expectations, with improvements expected as the year progresses [7] - The company anticipates steady improvement on the top line as it moves through 2026, focusing on fundamentals essential for sustainable growth [9] - Management expressed confidence in the actions being taken to strengthen the business and improve profitability [15] Other Important Information - The company completed the sale of Del Taco on December 22, 2025, and the results of Del Taco are excluded from continuing operations [16] - The effective tax rate for continuing operations for Q1 2026 was 32.4%, compared to 30% for the same quarter a year ago [20] Q&A Session Summary Question: Trends observed in January and impact of weather - Management noted that January saw meaningful improvements, with same-store sales performing better than in Q1, despite weather impacts [29][30] Question: Chicago performance and labor inefficiencies - Management acknowledged ongoing challenges in Chicago, attributing them to a tough labor market and operational issues, but expressed optimism for future improvements [31][32] Question: Support for franchisees amid commodity pressures - Management indicated that while franchisees are facing margin pressures, they are not providing blanket assistance but are evaluating individual cases [37] Question: Price-value equation in the current environment - Management stated they have been able to take more price on the company side while ensuring value for customers, including lowering prices on certain bundles [42][43] Question: Breakfast performance relative to competitors - Management reported that breakfast remains consistent for Jack in the Box, with no significant changes compared to other day parts [63][65] Question: Regional performance and California market challenges - Management acknowledged that California presents challenges due to labor pressures and noted that over 40% of their restaurants are based there, impacting overall performance [82][83]