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Jack In The Box (JACK)
:JACK
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Jack In The Box
(NASDAQ:JACK)
46Neutral
Positive Factors
Cost Management
Adjusted F1Q25 earnings were ahead of estimates, mainly driven by lower COGS at company stores and lower-than-expected G&A spending.
Earnings
Jack in the Box reported fiscal 1Q adj EBITDA of $97.2M, beating estimates and driven by better consolidated restaurant-level margins of 20%.
Negative Factors
Management Changes
The company announced the departure of CEO Darin Harris and CFO Lance Tucker has stepped up as the interim CEO, leaving the story and strategy in limbo.
Sales Performance
Expectations of negative comps in F2Q indicate a need for a modest acceleration for both brands, more so for Del Taco, to reach year end comp targets.
Traffic and Sales
Potential for investor sentiment to remain subdued until better traffic fundamentals materialize.
Jack In The Box (JACK) vs. S&P 500 (SPY)
Market Cap
$484.47M
Dividend Yield6.85%
Average Volume (3M)987.04K
Price to Earnings (P/E)―
Beta (1Y)0.79
Revenue Growth-6.02%
EPS Growth-136.86%
CountryUS
Employees1,606
SectorConsumer Cyclical
Sector Strength55
IndustryRestaurants
Share Statistics
EPS (TTM)-2.15
Shares Outstanding18,858,295
10 Day Avg. Volume1,293,177
30 Day Avg. Volume987,039
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.66
Price to Cash Flow (P/CF)1.30
P/FCF Ratio1.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$41.50Price Target Upside67.20% Upside
Rating ConsensusHold
Number of Analyst Covering13
Jack In The Box Business Overview & Revenue Model
Company DescriptionJack in the Box Inc. operates and franchises Jack in the Box quick-service restaurants. As of November 23, 2021, it operated and franchised approximately 2,200 Jack in the Box quick-service restaurants in 21 states and Guam. The company was founded in 1951 and is headquartered in San Diego, California.
How the Company Makes MoneyJack in the Box generates revenue primarily through the operation and franchising of its fast-food restaurants. The company earns money by selling food and beverages directly to customers in its company-owned locations. Additionally, a significant portion of its revenue comes from franchising, where the company collects royalties and fees from franchisees who operate Jack in the Box outlets. These franchise revenues include initial franchise fees, ongoing royalties based on a percentage of sales, and lease income from properties owned by Jack in the Box and leased to franchisees. The company's earnings are also influenced by strategic marketing initiatives, menu innovation, and operational efficiencies, which help drive customer traffic and sales.
Jack In The Box Financial Statement Overview
Summary
Jack In The Box is experiencing financial challenges with declining revenue, decreasing profitability, and cash flow issues, alongside a heavily leveraged balance sheet with negative equity. These factors suggest the company faces significant financial pressure, requiring strategic measures to improve its financial stability and growth prospects.Income Statement
The company has shown a declining revenue trend from $1.692 billion in 2023 to $1.571 billion in TTM (Trailing-Twelve-Months) 2024, indicating challenges in maintaining growth. Net profit margin has turned negative at -2.34% in TTM 2024, compared to 7.73% in 2023, showing a significant drop in profitability. The gross profit margin also decreased from 76.79% in 2023 to 27.70% in TTM 2024. While the EBIT and EBITDA margins remain relatively stable, the overall income statement reflects concerns regarding decreasing revenue and profitability.55
Neutral
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio due to negative stockholders' equity, indicating financial instability. The total liabilities exceed total assets, resulting in a negative equity position. The company's return on equity is not calculable due to negative equity, posing a risk to financial health. Despite steady total assets, the heavy leverage and negative equity position cast doubt on long-term sustainability.40
Negative
Cash Flow
Operating cash flow has significantly decreased from $215 million in 2023 to $68.8 million in TTM 2024, showing a concerning drop in operational efficiency. Free cash flow turned negative in TTM 2024 at -$46.7 million, compared to positive $140.1 million in 2023, indicating a decline in cash generation capability. The operating cash flow to net income ratio is not favorable due to negative net income, further highlighting cash flow challenges.48
Neutral
| Breakdown | ||||
| Sep 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Sep 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.22B | 1.69B | 1.47B | 1.14B | 1.02B | Gross Profit |
| 911.20M | 1.30B | 433.31M | 411.60M | 354.47M | EBIT |
| 31.43M | 278.75M | 248.27M | 289.95M | 179.11M | EBITDA |
| 77.64M | 334.07M | 300.19M | 327.98M | 231.91M | Net Income Common Stockholders |
| -35.32M | 130.83M | 115.78M | 165.75M | 89.76M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 24.75M | 157.65M | 108.89M | 55.35M | 199.66M | Total Assets |
| 2.74B | 3.00B | 2.92B | 1.75B | 1.91B | Total Debt |
| 3.18B | 3.16B | 3.17B | 2.23B | 2.33B | Net Debt |
| 3.16B | 3.01B | 3.06B | 2.18B | 2.13B | Total Liabilities |
| 3.59B | 3.72B | 3.66B | 2.57B | 2.70B | Stockholders Equity |
| -851.80M | -718.33M | -736.19M | -817.88M | -793.36M |
| Cash Flow | Free Cash Flow | |||
| 0.00 | 140.05M | 116.41M | 160.11M | 124.00M | Operating Cash Flow |
| 0.00 | 215.01M | 162.88M | 201.12M | 143.53M | Investing Cash Flow |
| 0.00 | 42.22M | -578.59M | -20.93M | 29.12M | Financing Cash Flow |
| 0.00 | -207.36M | 478.18M | -343.55M | -87.29M |
Jack In The Box Technical Analysis
Negative
24.82
Price Trends
33.69
Negative
38.04
Negative
42.95
Negative
Market Momentum
-2.51
Positive
29.16
Positive
7.60
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JACK, the sentiment is Negative. The current price of 24.82 is below the 20-day moving average (MA) of 27.91, below the 50-day MA of 33.69, and below the 200-day MA of 42.95, indicating a bearish trend. The MACD of -2.51 indicates Positive momentum. The RSI at 29.16 is Positive, neither overbought nor oversold. The STOCH value of 7.60 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JACK.
Jack In The Box Risk Analysis
Jack In The Box disclosed 36 risk factors in its most recent earnings report. Jack In The Box reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Jack In The Box Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $386.95M | 16.33 | -102.54% | 2.11% | 6.83% | 24.77% | |
71 Outperform | $2.47B | 14.92 | 41.18% | 2.26% | 4.13% | 56.76% | |
70 Outperform | $296.97M | 11.56 | 10.05% | ― | 0.93% | 15.12% | |
64 Neutral | $2.57B | 13.88 | 68.30% | 7.62% | 2.98% | -2.58% | |
59 Neutral | $263.40M | 6.64 | 110.27% | ― | -5.86% | 672.77% | |
59 Neutral | $11.76B | 10.11 | -0.70% | 3.92% | 1.27% | -16.30% | |
46 Neutral | $484.47M | ― | 4.15% | 6.85% | -6.02% | -136.86% |
* Consumer Cyclical Sector Average
Performance Comparison
JACK
Jack In The Box
24.82
-32.41
-56.63%
NATH
Nathan's Famous
91.45
26.78
41.41%
CAKE
Cheesecake Factory
45.31
12.70
38.95%
WEN
Wendy's
12.89
-4.64
-26.47%
PBPB
Potbelly
8.46
-2.01
-19.20%
LOCO
El Pollo LoCo
9.63
0.85
9.68%
Jack In The Box Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -25.84% | Next Earnings Date: May 14, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed sentiment, balancing positive developments in digital investments and menu optimization with challenges in same-store sales and economic pressures impacting the outlook. While there are strategic plans for growth and capital allocation adjustments, the near-term outlook remains cautious.Highlights
Positive Same-Store Sales Despite Challenges
Jack in the Box achieved positive same-store sales growth of 40 basis points in Q1, despite adverse weather conditions in California, Texas, and the Midwest, which negatively impacted sales by 20 basis points.
New Restaurant Openings and Market Expansion
Jack in the Box opened five new restaurants and plans to open 35 to 45 new locations in fiscal year 2025, including expansions into Chicago and Florida.
Digital and Tech Stack Investments
Significant investments were made in the company's tech stack, enhancing digital competitiveness across both brands, Jack in the Box and Del Taco.
Del Taco Menu Optimization Initiative
Improved menu optimization at Del Taco has resulted in higher attach rates and better average check.
Lowlights
Negative Q2 Outlook
Both Jack in the Box and Del Taco are expected to report negative same-store sales in Q2 due to ongoing macroeconomic pressures.
Del Taco Performance Challenges
Del Taco faced a challenging quarter with pressured same-store sales and six closures, expected to continue into Q2.
Reduced Share Repurchase Activity
Jack in the Box reduced its share repurchase allocation from $20 million to $5 million for fiscal year 2025, reallocating funds to reduce leverage.
GAAP EPS Decline
Consolidated GAAP diluted earnings per share decreased to $1.75 from $1.93 in the prior year.
Company Guidance
In the Jack in the Box First Quarter 2025 earnings call, the company reported a positive same-store sales growth of 40 basis points, despite adverse weather conditions impacting sales by approximately 20 basis points. The restaurant level margin remained flat year-over-year at 23.2%, aided by a new beverage contract contributing a one-time benefit of $3 million or 200 basis points. Jack in the Box opened five restaurants and closed six, with plans to open 35 to 45 restaurants during fiscal year 2025. Del Taco experienced a challenging quarter with negative same-store sales but noted improvements from a menu optimization initiative. The company refranchised 13 Del Taco locations, increasing franchise ownership to approximately 80%. Consolidated GAAP diluted earnings per share were $1.75, with operating earnings per share at $1.92. The company repurchased 124,000 shares for $5 million and adjusted its capital expenditure guidance to $100-$105 million for the year. Despite headwinds in Q2, annual same-store sales, operating EPS, and adjusted EBITDA guidance were maintained.Jack In The Box Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Jack In The Box Appoints Lance Tucker as CEO
Positive
Mar 31, 2025
On March 31, 2025, Jack in the Box Inc. announced the appointment of Lance Tucker as the new Chief Executive Officer and a member of the Board, effective immediately. Tucker, who has extensive experience in corporate finance and previously held senior roles at companies like Davidson Hospitality Group and CKE Restaurants Holdings, will see his compensation package significantly increased as he takes on this leadership role. This strategic appointment is expected to strengthen the company’s executive team and potentially enhance its market positioning.
Executive/Board Changes
Jack In The Box CEO Darin Harris Resigns
Neutral
Feb 24, 2025
On February 20, 2025, Darin Harris announced his resignation as CEO and Director of Jack in the Box Inc. to pursue other opportunities, with Lance Tucker stepping in as interim principal executive officer effective February 24, 2025. Tucker, who has extensive experience in corporate finance and the restaurant industry, is expected to maintain the company’s competitive edge in the quick-service restaurant sector. Meanwhile, Dawn Hooper will serve as interim principal financial officer, continuing her long-standing tenure with the company. The Board has expressed confidence in Tucker’s ability to balance growth and financial goals during this leadership transition.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.