Jack in the Box, the iconic fast food chain with a rich history spanning 74 years, is set to undergo significant changes as it grapples with declining sales and shifting consumer spending habits. The company announced on Wednesday that it plans to close approximately 10% of its locations, which translates to about 150 to 200 underperforming restaurants. This decision comes in response to a broader overhaul aimed at stabilizing the business and improving financial performance.
As part of its restructuring strategy, Jack in the Box intends to shutter 80 to 120 restaurants by the end of the year. With around 2,200 locations primarily concentrated on the US West Coast, these closures are seen as a necessary step to address the company's balance sheet. CEO Lance Tucker emphasized that the goal is to "accelerate cash flow and pay down debt," with an ambitious target of eliminating $300 million in debt over the next two years. He expressed optimism that these adjustments will pave the way for "consistent, net positive unit growth" in the future.
In addition to the closures, Jack in the Box is also exploring "strategic alternatives" for its Del Taco brand, which it acquired just three years ago. Tucker disclosed that the acquisition has faced significant challenges, including rising inflation and fierce competition from established players like Taco Bell. "I don’t know that Del Taco’s results over the next several years are going to meaningfully contribute to Jack’s bottom line," he stated, suggesting that it might be prudent to consider selling the brand to a new owner.
Recent financial reports indicate that Del Taco has experienced a 3.6% decline in sales, prompting Jack in the Box to withhold future financial guidance as it navigates the potential sale. The broader picture is also concerning for the chain, as Jack in the Box reported a 4.4% drop in sales during the second quarter of 2025. These challenges are reflected in the company's stock performance, which has plummeted by 57% over the past year and is down nearly 7% in premarket trading on Thursday.
In conclusion, Jack in the Box is actively working to reshape its future amidst a challenging economic landscape. With the planned closure of underperforming locations and the potential sale of Del Taco, the fast food chain aims to strengthen its financial position and ensure long-term sustainability. As these changes unfold, stakeholders will be watching closely to see how they impact the brand's overall performance and market presence.
