Jack in the Box is planning a strategic overhaul due to struggling sales as customers reduce spending, leading to the planned closure of 150 to 200 underperforming locations, representing 10% of its restaurants.
The big picture: The closures are part of efforts to improve the company’s balance sheet, accelerate cash flow, and reduce debt by $300 million over the next two years, with 80 to 120 locations expected to shut down by the end of the year, particularly focusing on stores situated on the US West Coast.
- CEO Lance Tucker emphasized the goal of achieving consistent, net positive unit growth through these closures and restructuring efforts aimed at addressing financial challenges and fostering growth opportunities for the chain.
Go deeper: In addition to closing locations, Jack in the Box is exploring “strategic alternatives” for Del Taco, a Mexican-inspired chain acquired three years ago, citing rising inflation, tough competition from rivals like Taco Bell, and uncertainties about its future contributions to Jack in the Box’s bottom line as reasons for the potential sale.
- The decision to explore selling Del Taco comes in the wake of pre-announced earnings showing a 3.6% drop in sales for the brand, leading to the discontinuation of financial guidance as the company evaluates options for its future.
- Jack in the Box also faced its own challenges, with sales dipping by 4.4% in the second quarter of 2025 and its stock price plummeting by 57% over the past year, reflecting broader struggles within the fast-food industry.
Zoom out: While competitors like McDonald’s and Chipotle reported sluggish performance at the beginning of the year, Taco Bell stands out with a forecasted 8% increase in sales driven by innovative menu offerings, showcasing disparities in performance within the fast-food sector.
