Jack in the Box same-store sales of (1.1%)
Diluted EPS from continuing operations of $1.08 and Operating EPS of $0.96
SAN DIEGO,--(BUSINESS WIRE)--Jack in the Box Inc. (NASDAQ: JACK) announced financial results for the third quarter ended July 5, 2026.
“During my first months as interim CEO, I've spent significant time listening to our franchisees, meeting with our teams, and gaining a deeper understanding of the Jack in the Box business. With our refinancing now complete, we're fully focused on improving restaurant performance and executing against the priorities that will create the greatest long-term value. While we have more work ahead, I'm increasingly confident that our path forward is becoming clearer to strengthen franchisee profitability, improve execution, and build a stronger foundation for sustainable growth,” said Mark King, Interim Chief Executive Officer of Jack in the Box Inc.
Same-store sales declined 1.1% in the third quarter, comprised of franchise same-store sales decline of 1.2% and company-owned same-store sales decline of 0.9%. Sales performance resulted primarily from a decline in transactions, partially offset by an increase in price. Systemwide sales for the third quarter decreased 1.4%.
Restaurant-Level Margin(1), a non-GAAP measure, was $17.0 million, or 17.6%, compared to $16.9 million, or 17.9%, a year ago driven primarily by commodity cost inflation and a change in the mix of restaurants, partially offset by increased price.
Franchise-Level Margin(1), a non-GAAP measure, was $60.3 million, or 37.4%, a decrease from $66.2 million, or 39.3%, a year ago. The decrease was primarily due to lower sales driving lower rent and royalty revenue and a decrease in the number of restaurants as part of the 'JACK on Track' closure program. Bad debt expense was also higher versus the prior year quarter.
Jack in the Box restaurant count decreased in the third quarter, with 4 restaurant openings and 17 restaurant closures.
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Jack in the Box Restaurant Counts:
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Total revenues decreased 1.8% to $257.7 million, compared to $262.4 million in the prior year quarter. The lower revenue is primarily the result of same-store sales declines, as well as a lower number of restaurants.
The SG&A expense for the third quarter was $17.0 million, a decrease of $3.5 million compared to the prior year quarter. The decrease was due primarily to lower legal costs due to a litigation reversal and lower stock compensation due to forfeitures, partially offset by the fluctuation of $4.2 million in the cash surrender value of our COLI policies, as well as higher incentive compensation in the quarter. When excluding net COLI gains, G&A was 1.4% of systemwide sales.
Other operating income, net for the third quarter was $3.1 million, a change of $7.6 million compared to other operating expense, net of $4.5 million in the prior year quarter. The change was primarily due to an increase in gains on the sale of real estate.
Net earnings from continuing operations was $21.0 million for the third quarter of fiscal 2026. This is compared with net earnings from continuing operations of $22.8 million for the third quarter of the prior year.
Adjusted EBITDA(3), a non-GAAP measure, was $61.2 million in the third quarter of fiscal 2026 compared with $57.1 million for the prior year quarter.
The income tax provision reflects an effective tax rate of 36.9% in the third quarter of 2026 as compared to 20.9% in the prior year. The major components of the year-over-year increase in tax rate were additional tax expense from the establishment of valuation allowance on interest deduction limitations in the current year and non-deductible component of share-based compensation, while the prior year’s effective tax rate included additional tax benefit from non-taxable gains from the market performance of insurance products used to fund certain non-qualified retirement plans. The non-GAAP operating EPS tax rate for the third quarter of 2026 was 35.7%, which differed from the effective tax rate as it is without the impacts of the nondeductible component of share-based compensation.
Third quarter diluted earnings per share from continuing operations was $1.08 in 2026, compared to $1.19 in the prior year quarter. Operating Earnings Per Share(2), a non-GAAP measure, was $0.96 in the third quarter of fiscal 2026 compared with $1.04 in the prior year quarter.
(1)
Restaurant-Level Margin and Franchise-Level Margin are non-GAAP measures. These non-GAAP measures are reconciled to earnings (loss) from operations, the most comparable GAAP measure, in the attachment to this release. See "Reconciliation of Non-GAAP Measurements to GAAP Results."
(2)
Operating Earnings Per Share represents the diluted earnings per share on a GAAP basis, excluding certain adjustments. See "Reconciliation of Non-GAAP Measurements to GAAP Results." Operating earnings per share may not add due to rounding.
(3)
Adjusted EBITDA represents net earnings on a GAAP basis excluding certain adjustments. See "Reconciliation of Non-GAAP Measurements to GAAP Results."
Del Taco Discontinued Operations
In October 2025, the Company entered into a definitive agreement to sell Del Taco Holdings Inc. (“Del Taco”) to Yadav Enterprises, Inc., a California corporation and Anil Yadav, which was completed on December 22, 2025. As a result of the sale, operating results for Del Taco are included in discontinued operations for all periods presented. There were losses from discontinued operations, net of taxes of $0.9 million for the third quarter of 2026, compared with losses from discontinued operations, net of taxes of $0.8 million in the prior year quarter.
During the third quarter, the Company prepaid $110.0 million of its existing Series 2019-1 Class A-2-II Notes. The repayment was made using proceeds from withdrawing excess COLI funding as well as cash on hand. Additionally, during the third quarter, the Company completed the financing of $500 million of 2026-1 Class A-2 Notes, which have an anticipated repayment date of May 2031. As part of the refinancing transaction, the Company fully paid down the remainder of its 2019-1 Class A-2-II Notes which had an anticipated repayment date of August 2026, and also partially paid down its 2022-1 Class A-2-I Notes which have an anticipated repayment date of February 2027.
The Company did not repurchase any shares of our common stock in the third quarter. As of the end of the third quarter, there was $175.0 million remaining under the Board-authorized stock buyback program.
The Company updated its guidance. The below reflects updated expectations for the fiscal year ending September 27, 2026.
The below guidance remains unchanged for the company's expectations for fiscal year ending September 27, 2026.
The Company will host a conference call for analysts and investors on Wednesday, August 12, 2026, beginning at 2:00 p.m. PT (5:00 p.m. ET). The call will be webcast live via the Investors section of the Jack in the Box company website at http://investors.jackinthebox.com. A replay of the call will be available through the Jack in the Box Inc. corporate website for 21 days. The call can be accessed via phone by dialing (888) 596-4144 and using ID 7573961.
Jack in the Box Inc. (NASDAQ: JACK), founded and headquartered in San Diego, California, is a restaurant company that operates and franchises Jack in the Box®, one of the nation's largest hamburger chains with 2,115 restaurants across 25 states, Mexico and Guam. For more information, including franchising opportunities, visit www.jackinthebox.com.
Category: Earnings
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “goals,” “guidance,” “intend,” “plan,” “project,” “may,” “will,” “would” and similar expressions. These statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate. These estimates and assumptions involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. Factors that may cause our actual results to differ materially from any forward-looking statements include, but are not limited to: the success of new products, marketing initiatives and restaurant remodels and drive-thru enhancements; the impact of competition, unemployment, trends in consumer spending patterns and commodity costs; the Company’s ability to achieve and manage its planned growth, which is affected by the availability of a sufficient number of suitable new restaurant sites, the performance of new restaurants, risks relating to expansion into new markets and successful franchise development; the ability to attract, train and retain top-performing personnel, litigation risks; risks associated with disagreements with franchisees; supply chain disruption; food-safety incidents or negative publicity impacting the reputation of the Company's brand; increased regulatory and legal complexities, risks associated with the amount and terms of the securitized debt issued by certain of our wholly owned subsidiaries; stock market volatility. These and other factors are discussed in the Company’s annual report on Form 10-K and its periodic reports on Form 10-Q filed with the Securities and Exchange Commission, which are available online at http://investors.jackinthebox.com or in hard copy upon request. The Company undertakes no obligation to update or revise any forward-looking statement, whether as the result of new information or otherwise.
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JACK IN THE BOX INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) DATA
(Unaudited)
The following table presents certain income and expense items included in our condensed consolidated statements of earnings (loss) as a percentage of total revenues, unless otherwise indicated. Percentages may not add due to rounding.
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JACK IN THE BOX INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS
(Unaudited)
To supplement the condensed consolidated financial statements, which are presented in accordance with GAAP, the Company uses the following non-GAAP measures: Adjusted Net Income, Operating Earnings Per Share, Adjusted EBITDA, Restaurant-Level Margin and Franchise-Level Margin. Management believes that these measurements, when viewed with the Company's results of operations in accordance with GAAP and the accompanying reconciliations in the tables below, provide useful information about operating performance and period-over-period changes, and provide additional information that is useful for evaluating the operating performance of the Company's core business without regard to potential distortions.
Operating Earnings Per Share represents diluted earnings per share from continuing operations on a GAAP basis excluding restructuring, integration and other, net COLI gains, pension and post-retirement benefit costs, impairment charges, gains on the sale of company-operated restaurants, gains on the sale of real estate to franchisees, excess tax shortfall from share-based compensation arrangements, loss on extinguishment of debt and other tax-related impacts.
Operating Earnings Per Share should be considered as a supplement to, not as a substitute for, analysis of results as reported under U.S. GAAP or other similarly titled measures of other companies. Management believes Operating Earnings Per Share provides investors with a meaningful supplement of the Company’s operating performance and period-over-period changes without regard to potential distortions.
Below is a reconciliation of Non-GAAP Adjusted Net Income to the most directly comparable GAAP measure of net income. Also below is a reconciliation of Non-GAAP Operating Earnings Per Share to the most directly comparable GAAP measure, diluted earnings per share from continuing operations:
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Adjusted EBITDA represents net earnings from continuing operations on a GAAP basis excluding income taxes, interest expense, net, gains on the sale of company-operated restaurants, other operating (income) expenses, net, depreciation and amortization, amortization of cloud computing costs, amortization of favorable and unfavorable leases and subleases, net, amortization of franchise tenant improvement allowances and other, net COLI gains, and pension and post-retirement benefit costs.
Adjusted EBITDA should be considered as a supplement to, not as a substitute for, analysis of results as reported under U.S. GAAP or other similarly titled measures of other companies. Management believes Adjusted EBITDA is useful to investors to gain an understanding of the factors and trends affecting the Company's ongoing cash earnings, from which capital investments are made and debt is serviced.
Below is a reconciliation of non-GAAP Adjusted EBITDA to the most directly comparable GAAP measure, net earnings from continuing operations (in thousands):
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Restaurant-Level Margin is defined as company restaurant sales less restaurant operating costs (food and packaging, labor, and occupancy costs) and is neither required by, nor presented in accordance with GAAP. Restaurant-Level Margin excludes revenues and expenses of our franchise operations and selling, general, and administrative expenses. Certain other costs are also excluded, such as depreciation and amortization, pre-opening costs, other operating (income) expenses, net, and gains on the sale of company-operated restaurants. As such, Restaurant-Level Margin is not indicative of the overall results of the Company and does not accrue directly to the benefit of shareholders because of the exclusion of corporate-level expenses. Restaurant-Level Margin should be considered as a supplement to, not as a substitute for, analysis of results as reported under GAAP or other similarly titled measures of other companies. The Company is presenting Restaurant-Level Margin because it believes that it provides a meaningful supplement to net earnings of the company's core business operating results, as well as a comparison to those of other similar companies. Management utilizes Restaurant-Level Margin as a key performance indicator to evaluate the profitability of company-operated restaurants. Below is a reconciliation of non-GAAP Restaurant-Level Margin to the most directly comparable GAAP measure, earnings from continuing operations (in thousands):
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Franchise-Level Margin is defined as franchise revenues less franchise operating costs (occupancy expenses, advertising contributions, and franchise support and other costs) and is neither required by, nor presented in accordance with GAAP. Franchise-Level Margin excludes revenue and expenses of our company-operated restaurants and selling, general, and administrative expenses. Certain other costs are also excluded, such as depreciation and amortization, pre-opening, other operating (income) expenses, net, and gains on the sale of company-operated restaurants. As such, Franchise-Level Margin is not indicative of the overall results of the Company and does not accrue directly to the benefit of shareholders because of the exclusion of corporate-level expenses. Franchise-Level Margin should be considered as a supplement to, not as a substitute for, analysis of results as reported under GAAP or other similarly titled measures of other companies. The Company is presenting Franchise-Level Margin because it believes that it provides a meaningful supplement to net earnings of the Company's core business operating results, as well as a comparison to those of other similar companies. Management utilizes Franchise-Level Margin as a key performance indicator to evaluate the profitability of our franchise operations. Below is a reconciliation of non-GAAP Franchise-Level Margin to the most directly comparable GAAP measure, earnings from continuing operations (in thousands):
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SOURCE Jack in the Box Inc.
Jack in the Box Inc. (NASDAQ: JACK), based in San Diego, is a restaurant company that operates and franchises Jack in the Box® restaurants.