Jack in the Box is scaling down its storefronts ― and maybe streamlining its menu ― after it reported the worst same-store sales decline in 15 years.
The stock tumbled by over 3% in intraday Monday trading, after shedding 2% on Friday, as investors reacted to last week’s weak quarterly report. Year-to-date, Jack’s shares are down a staggering 58%.
The San Diego-based chain, which has a strong Lone Star State presence, has struggled in recent years. In the spring, Jack in the Box announced a plan to pay down its debt and shutter between 150-200 underperforming stores. Although Jack in the Box has simultaneously announced ambitious expansion plans, its most recent earnings report suggests things are going from bad to worse.
That could have trickle-down effects on Texas ― Jack in the Box’s second-largest market ― and by extension the greater Dallas area, where dozens of locations sit within relatively close proximity of each other.
Business Briefing
The Lone Star State houses 580 Jack in the Box locations. Four Texas cities rank among the top 10 U.S. cities with the largest number of Jack in the Box locations.
- #1: Houston (98)
- #5: Dallas (38)
- #7: San Antonio (33)
- #9: Fort Worth (22)
Jack in the Box may need to rally its die-hard customers, who get 24/7 access to a western frontier of affordable grub like breakfast tacos, burgers and even egg rolls.
However, that menu hasn’t been appetizing enough to lure in foot traffic, and CEO Lance Tucker is vowing to reverse the sales decline.
In the restaurant closure plan announced in April, Jack in the Box indicated that roughly 80 to 120 of those affected are set to take place before the end of 2025. Specific locations remain unknown.
In an effort to get back to the basics, improvements are being focused on better customer experience, consistent quality across menu items, and more training and support for restaurant employees.
“As I look longer term, the entire guest experience requires improvement in the coming months and years,” Tucker said during the company’s earnings call. “The value equation has gotten a bit off track across the broader QSR industry and Jack in the Box is no different.”
The value equation that’s led Jack in the Box astray ― a commitment to fast service and 24/7 egg roll availability.
“It’s a difficult task at Jack in the Box simply because so much of the equity relies on variety,” Tucker said. “It’s making sure how do you keep as much variety out there on the menu for the guest while maybe trying to make it a little simpler in the back of the house.”
Still, Jack in the Box isn’t sure its business strategy can offset national market trends impacting fast food chains – including a decline in low-income consumer spending on fast food, especially among Hispanic customers, which are plentiful across Texas and the D-FW.
“Jack-in-the-box significantly over-indexes with hispanic guests, who, especially in our core markets, face uncertainty and have pulled back on their spending,” Tucker told analysts, according to a transcript of his remarks. “This issue is having an outsized impact on our sales.”
With Texas home to both a large Hispanic population and a dense network of Jack in the Box locations, the local market may soon see changes. Which locations and neighborhoods will see restaurant closures in 2025 and 2026 remains unknown.