Jack In The Box 2025 Q2 Earnings Misses Targets as Net Income Plummets 669.4%

Jack In The Box (JACK) reported its fiscal 2025 Q2 earnings on May 14th, 2025. The company's results fell short of expectations, with significant declines in both revenue and net income. The guidance was adjusted to reflect ongoing challenges in the macroeconomic environment. Jack in the Box anticipates improved sales in the latter half of 2025 due to new marketing strategies but faces immediate hurdles.

Revenue
Jack In The Box experienced a 7.8% decrease in total revenue, which fell to $336.70 million in Q2 2025 from $365.35 million in Q2 2024. Company restaurant sales amounted to $95.09 million, while franchise rental revenues were $77.94 million. Franchise royalties brought in $43.30 million, and marketing fees contributed $43.14 million. Technology and sourcing fees added $3.81 million, with franchise fees and other services totaling $2.45 million. The combined revenue from these segments reached $265.73 million.

Earnings/Net Income
In Q2 2025, Jack In The Box reported a net loss of $7.47 per share, a stark contrast to the profit of $1.27 per share in Q2 2024, representing a negative change of 688.2%. The company recorded a net loss of $142.23 million, down significantly from the $24.98 million net income in the same quarter of the previous year. This performance highlights a challenging period for the company.

Price Action
The stock price of Jack In The Box edged down by 0.54% during the latest trading day, dropped 3.46% over the most recent full trading week, and climbed 3.80% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing Jack in the Box shares following revenue announcements and holding them for 30 days has yielded substantial losses over the past five years. This strategy resulted in a -55.15% return compared to an 87.14% benchmark return, with an excess return of -142.29%. The Sharpe ratio stood at -0.37, indicating poor risk-adjusted returns. Additionally, the maximum drawdown was a considerable -79.66%, underscoring the high risk and significant losses associated with this approach. Such performance suggests that investors might need to reassess this strategy given its historical performance.

CEO Commentary
"I am encouraged by our marketing plans in the back half of 2025, which we expect to energize sales despite the difficult industry-wide macro environment in which we continue to operate," said Lance Tucker, Chief Executive Officer of Jack in the Box. He emphasized the company's commitment to addressing areas of need identified in the 'JACK on Track' plan, expressing confidence in establishing consistent top-line trends while simplifying operations and enhancing the investor narrative.

Guidance
The company anticipates that the marketing strategies implemented in the latter half of 2025 will drive sales growth, aiming to mitigate challenges posed by the current macroeconomic environment. Jack in the Box is focused on improving business performance and achieving a more efficient operational model, which is expected to contribute positively to their financial results in the upcoming quarters.

Additional News
Jack in the Box has announced plans to close up to 200 underperforming restaurants as part of its "JACK on Track" initiative, aiming to enhance long-term financial performance. This decision, revealed in an April 23 press release, seeks to optimize cash flow, reduce debt, and foster growth. The company is also exploring the potential sale of its Del Taco brand, having retained Bank of America Securities for guidance on strategic alternatives, including divestiture. These moves reflect a shift towards a more asset-light and franchise-focused business model.