JACK IN THE BOX INC (JACK) Q1 2025 Earnings Summary

Executive Summary

Q1 2025 delivered modest top-line stabilization at Jack in the Box (system SSS +0.4%) against a challenging macro backdrop, while Del Taco remained pressured (system SSS −4.5%); consolidated revenue declined 3.7% to $469.4M and diluted EPS was $1.75, with Operating EPS of $1.92 .
Restaurant-level margin for Jack in the Box held essentially flat YoY at 23.2%, aided by beverage funding from a new contract; management quantified about $3M (~200 bps) of this as a one-time benefit in Q1 .
Guidance: Capex lowered to $100–$105M (from $105–$115M) and FY25 share repurchases cut to ~$5M (from ~$20M), while same-store sales, Operating EPS ($5.05–$5.45) and Adjusted EBITDA ($288–$303M) guidance were maintained versus Nov 20 baseline .
Leadership transition: CEO Darin Harris departed; CFO Lance Tucker appointed Interim Principal Executive Officer, emphasizing capital allocation discipline and leverage reduction; Q2-to-date comps were negative for both brands and expected to be down for the quarter, a key near-term narrative driver .

What Went Well and What Went Wrong

What Went Well

Sequential traffic/mix improvements at Jack and positive system SSS (+0.4%), despite wildfires and severe weather headwinds costing ~20 bps of Q1 SSS; management credited franchise execution and value/digital strategy .
Jack restaurant-level margin held at 23.2% YoY, supported by lower food and packaging costs and beverage funding tied to a new contract; one-time benefit of ~$3M (~200 bps) flagged by management .
Development progress: 3 new Jack franchise development agreements (10 restaurants) in Q1, continued Chicago and Florida expansion plans; Del Taco signed 40 agreements since acquisition (303 restaurants) and completed refranchising of 13 units in Q1 .

Quote: “I am pleased with Jack’s Q1 results as we were able to battle through a difficult macro environment... to deliver positive same-store sales and sequential traffic and mix improvements for Jack in the Box.” — Lance Tucker .

What Went Wrong

Del Taco softness: system SSS −4.5% with margin compression to 13.8% (from 15.6% YoY), reflecting the impact of California wage increases and refranchising mix; management expects Del’s Q2 comps to be negative .
Consolidated revenue fell 3.7% to $469.4M due to Del Taco refranchising; GAAP diluted EPS declined YoY to $1.75 (from $1.93), and Adjusted EBITDA dipped to $97.2M (from $101.8M) .
SG&A increased $4.3M YoY to $50.7M, driven by fluctuations in COLI; excluding net COLI gains, G&A was 2.3% of systemwide sales .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$487.5	$349.3	$469.4
Diluted EPS ($)	$1.93	$1.12	$1.75
Operating EPS ($)	$1.95	$1.16	$1.92
Adjusted EBITDA ($USD Millions)	$101.8	$65.5	$97.2
Earnings from Operations ($USD Millions)	$79.5	$51.1	$74.2
SG&A ($USD Millions)	$46.4	$30.0	$50.7
Effective Tax Rate (%)	26.9%	29.2%	29.8%

Segment performance and KPIs:

Metric	Q1 2024	Q4 2024	Q1 2025
Jack System SSS (%)	+0.8%	−2.1%	+0.4%
Jack Company SSS (%)	+2.0%	−2.2%	−0.4%
Jack Franchise SSS (%)	+0.7%	−2.0%	+0.5%
Jack Systemwide Sales ($USD Millions)	$1,358.8	$995.6	$1,366.1
Jack RL Margin % (Company)	23.1%	18.5%	23.2%
Jack Franchise-Level Margin %	41.2%	40.4%	40.9%
Del System SSS (%)	+2.2%	−3.9%	−4.5%
Del Company SSS (%)	+1.8%	−3.0%	−2.5%
Del Franchise SSS (%)	+2.4%	−4.2%	−5.1%
Del Systemwide Sales ($USD Millions)	$290.5	$219.9	$284.9
Del RL Margin % (Company)	15.6%	9.3%	13.8%
Del Franchise-Level Margin %	29.3%	26.5%	25.7%

Operational KPIs:

KPI	Q1 2024	Q4 2024	Q1 2025
Jack Openings / Closures (Units)	7 / 1	16 / 20	5 / 6
Jack Ending Units (Total)	2,192	2,191	2,190
Del Openings / Closures (Units)	3 / 3	2 / 5	1 / 6
Del Ending Units (Total)	592	594	589
Del Refranchised in Q1 (Units)	—	—	13
Share Repurchases ($ / Shares)	—	0.3M shares (cost N/A)	$5.0M / 0.124M shares
Dividend Declared ($/sh)	$0.44	$0.44	$0.44
POS Rollout (# Restaurants)	—	“significant progress”	~1,000 restaurants

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital Expenditures	FY 2025	$105–$115M	$100–$105M	Lowered
Share Repurchases	FY 2025	~$20M	~$5M (all executed in Q1)	Lowered
Operating EPS	FY 2025	$5.05–$5.45	Maintained	Maintained
Adjusted EBITDA	FY 2025	$288–$303M	Maintained	Maintained
Jack SSS	FY 2025	Flat to +1%	Maintained	Maintained
Jack RL Margin (Company)	FY 2025	20–22%	Maintained	Maintained
Jack Franchise Margin	FY 2025	40–41%	Maintained	Maintained
Del SSS	FY 2025	~Flat to −1%	Maintained	Maintained
Del RL Margin (Company)	FY 2025	9–11%	Maintained	Maintained
Del Franchise Margin	FY 2025	25–26%	Maintained	Maintained

Earnings Call Themes & Trends

Topic	Q3 2024 (Jul’24)	Q4 2024 (Nov’24)	Q1 2025 (Feb’25)	Trend
Macro/Consumer	“Challenging sales environment” with transaction pressure	“Difficult top-line macro environment” through 2024	Q2-to-date negative comps expected; consumer cautious	Persistent headwinds
Labor/Wages (CA AB1228)	Labor cost pressure at both brands; Jack RL margin impact	FY25 margin guide reflects full-year AB1228 impact	Labor increase in Q1 driven by CA minimum wage; Del margin pressure	Ongoing margin headwind
Digital/POS	~100 restaurants on new POS; next-gen app going live Sep 1	“Significant progress” on POS roll-out	~1,000 restaurants on new POS; kiosk capabilities	Accelerating rollout
Beverage Funding	Not highlighted	Not highlighted	New beverage contract; one-time ~$3M (~200 bps) margin benefit	New tailwind (partly non-recurring)
Development/Expansion	Jack entering Chicago; Del openings record first-week sales	30 Jack openings in FY24; Chicago/Florida planned	3 Jack dev agreements (10 units); Chicago summer; Florida later	Pipeline intact
Refranchising (Del)	+27 refranchised post-Q3; margins mixed	47 refranchised FY24; ~80% franchised	13 refranchised in Q1; ~80% franchised; ongoing	Continued shift asset-light
Capital Allocation	—	FY25 plan included $20M buybacks	Capex pruned; buybacks curtailed to $5M; focus on leverage reduction	Pivot to FCF/deleveraging

Management Commentary

Strategy and focus: “We are fundamentally well positioned to drive sales and expand our brands while efficiently allocating our capital in a way that drives shareholder value.” — Lance Tucker .
Capital allocation: “There will be more to come… to unlock free cash flow… bringing the debt down a little bit most certainly would be an unlock.” — Lance Tucker .
Sales outlook: “We are running negative quarter-to-date and expect a negative Q2 same-store sales result for both brands… We have a strong marketing calendar… value leadership and digital evolution to drive sales.” — Lance Tucker .

Q&A Highlights

Capital allocation pivot: Management indicated near-term actions to slow Capex and halt further buybacks in favor of free cash flow and leverage reduction; more initiatives expected by May .
Corporate builds vs asset-light: Company store builds will be used selectively to seed and complement franchise growth in new markets, not lead expansion, reaffirming asset-light posture .
Industry/macro conditions: Consumer caution persists; Jack believes fundamentals (menu, value, digital) position the brand to compete effectively despite headwinds .

Estimates Context

Wall Street consensus (S&P Global) for Q1 2025 EPS and revenue was unavailable at the time of analysis due to provider limit; as a result, we cannot quantify beats/misses vs consensus for the quarter. Values intended for consensus comparison will be updated once accessible from S&P Global [GetEstimates error: Daily Request Limit Exceeded].

Key Takeaways for Investors

Jack’s stabilization: System SSS turned slightly positive (+0.4%) with margin resilience (23.2% RL) aided by beverage funding; however, magnitude of underlying demand recovery remains modest and partly supported by non-recurring tailwinds .
Del Taco remains the swing factor: Comps and company margins remain pressured (system SSS −4.5%, RL margin 13.8%), with refranchising and CA wage impacts continuing; Q2 comps expected negative .
Capital discipline is a new catalyst: Capex trimmed and buybacks cut to $5M with explicit focus on FCF acceleration and deleveraging; watch May call for additional actions (potentially sentiment-supportive if credible) .
Guidance maintained where it counts: Despite a weak Q2 start, FY25 Operating EPS ($5.05–$5.45) and Adjusted EBITDA ($288–$303M) are reiterated, suggesting confidence in calendar-year margin levers and digital/value initiatives .
Near-term trading lens: Management’s disclosure that Q2 comps are tracking negative is a key near-term overhang; execution on value/digital calendar and the quantification of additional FCF actions are likely the primary stock movers into the next print .
Development pipeline intact: Chicago openings in summer and Florida later in the year, plus new franchise agreements, support the medium-term unit growth narrative even as corporate builds are moderated .
Monitor wage and cost dynamics: Continued visibility on CA wage impacts, beverage funding sustainability (one-time vs run-rate), and COLI-driven SG&A volatility is essential for margin trajectory assessment .