Q1 2026 Jack in the Box Inc Earnings Call

February 18, 2026

Speaker #1: Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the JACK IN THE BOX Q1 2026 earnings call.

Operator: Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Jack in the Box Q1 2026 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you. I'd now like to turn the call over to Rachel Webb, Vice President of Investor Relations. Please go ahead.

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad.

Speaker #1: If you'd like to withdraw your question, press star 1 again. Thank you. I'd now like to turn the call over to Rachel Webb, Vice President of Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Thanks, operator, and good afternoon, everyone. We appreciate you joining today's conference call, highlighting results from our first quarter of fiscal 2026. With me today are Chief Executive Officer Lance Tucker, our Chief Financial Officer Dawn Hooper, and our Chief Customer and Digital Officer Ryan Ostrom.

Rachel Webb: Thanks, operator, and good afternoon, everyone. We appreciate you joining today's conference call, highlighting results from our first quarter of fiscal 2026. With me today, our Chief Executive Officer, Lance Tucker, our Chief Financial Officer, Dawn Hooper, and our Chief Customer and Digital Officer, Ryan Ostrom. Following their prepared remarks, we will be happy to take questions from our covering sell-side analysts. Note that during both our discussion and Q&A, we may refer to non-GAAP items. Please refer to the non-GAAP reconciliations provided in the earnings release, which is available on our investor relations website at jackinthebox.com. We will also be making forward-looking statements based on current information and judgments that reflect management's outlook for the future. However, actual results may differ materially from these expectations because of business risks.

Speaker #2: Following their prepared remarks, we will be happy to take questions from our covering sell-side analysts. Note that during both our discussion and Q&A, we may refer to non-GAAP items.

Speaker #2: Please refer to the non-GAAP reconciliations provided in the earnings release, which is available on our investor relations website at jackinthebox.com. We will also be making forward-looking statements based on current information and judgments that reflect management's outlook for the future.

Speaker #2: However, actual results may differ materially from these expectations because of business risks. We, therefore, consider the safe harbor statement in the earnings release and the cautionary statements in our most recent 10-K to be part of our discussion.

Rachel Webb: We therefore consider the Safe Harbor statement in the earnings release and the cautionary statements in our most recent 10-K to be part of our discussion. Material risk factors, as well as information relating to company operations, are detailed in our most recent 10-K, 10-Q, and other public documents filed with the SEC and are available on our investor relations website. Additionally, on 21 January 2026, the company filed a definitive proxy statement and related materials with the SEC in connection with the 2026 annual meeting of stockholders. Our directors and certain officers are participants in the solicitation of proxies in connection with the annual meeting. Stockholders are encouraged to read the proxy statement and related materials, as they contain important information, including the identity of the participants and their direct or indirect interests by security holdings or otherwise.

Speaker #2: Material risk factors, as well as information relating to company operations, are detailed in our most recent 10-K, 10-Q, and other public documents filed with the SEC, and are available on our investor relations website.

Speaker #2: Additionally, on January 21, 2026, the company filed a definitive proxy statement and related materials with the SEC in connection with the 2026 annual meeting of stockholders.

Speaker #2: Our directors and certain officers are participants in the solicitation of proxies in connection with the annual meeting. Stockholders are encouraged to read the proxy statement and related materials, as they contain important information, including the identity of the participants and their direct or indirect interests, by security holdings or otherwise.

Speaker #2: While we understand that there may be interest in our ongoing proxy contest, please note the purpose of today's call is to discuss Jack's first quarter earnings results, and we ask that you keep your questions focused on our financial performance.

Rachel Webb: While we understand that there may be interest in our ongoing proxy contest, please note the purpose of today's call is to discuss Jack's Q1 earnings results, and we ask that you keep your questions focused on our financial performance. With that, I would like to turn the call over to our Chief Executive Officer, Lance Tucker.

Speaker #2: And with that, I would like to turn the call over to our Chief Executive Officer Lance Tucker.

Speaker #3: Thanks, Rachel. And I appreciate everyone joining us today. I want to begin by thanking our teams, our franchisees, and our shareholders. This past quarter has been one of hard work, dedication, and grit.

Lance Tucker: Thanks, Rachel, and I appreciate everyone joining us today. I want to begin by thanking our teams, our franchisees, and our shareholders. This past quarter has been one of hard work, dedication, and grit. It's a quarter critical in laying the foundation for 2026 and beyond. We remain focused on simplifying the business, and we've made visible progress since the last quarter. On this call, I'll provide a brief update on our Jack on Track plans and how I'm thinking about the remainder of 2026, and then I'll turn it over to Dawn to walk through Q1 results. In December, we successfully closed on the sale of Del Taco, and we then made a significant paydown on our debt. We are doing exactly what we committed to do by simplifying the business and bringing down debt levels, and I'm really pleased with the progress to date.

Speaker #3: It was a quarter critical in laying the foundation for 2026 and beyond. We remain focused on simplifying the business. And we've made visible progress since the last quarter.

Speaker #3: On this call, I'll provide a brief update on our JACK on Track plans and how I'm thinking about the remainder of 2026, and then I'll turn it over to Dawn to walk through first quarter results.

Speaker #3: In December, we successfully closed on the sale of Del Taco, and we then made a significant paydown on our debt. We are doing exactly what we committed to do: simplifying the business and bringing down debt levels.

Speaker #3: And I'm really pleased with the progress to date. With the transaction complete, only minimal separation activities remain, and the team is fully recentered on strengthening the JACK IN THE BOX brand and executing the remaining elements of our JACK on track plan.

Lance Tucker: With the transaction complete, only minimal separation activities remain, and the team is fully recentered on strengthening the Jack in the Box brand and executing the remaining elements of our Jack on Track plan. As we entered 2026, Jack in the Box proudly marked its 75th anniversary, a milestone few brands reach. The response to our anniversary activations has been positive, reinforcing what we know to be true. Jack remains beloved by our customers. Guests are leaning into the nostalgia that defines our heritage while embracing the differentiation and innovation that continue to move the brand forward. 2026 is about laying the foundation for sustainable long-term growth, which requires doing a lot of hard work right now. We're confident that the actions we're taking will lead to a stronger, more stable platform from which to grow.

Speaker #3: As we entered 2026, JACK IN THE BOX proudly marked its 75th anniversary. A milestone few brands reach. The response to our anniversary activations has been positive, reinforcing what we know to be true.

Speaker #3: JACK remains beloved by our customers. Guests are leaning into the nostalgia that defines our heritage while embracing the differentiation and innovation that continue to move the brand forward.

Speaker #3: 2026 is about laying the foundation for sustainable, long-term growth, which requires doing a lot of hard work right now. We're confident that the actions we're taking will lead to a stronger, more stable platform from which to grow.

Speaker #3: We are beginning to see early results that reinforce that we are on the right path. But as a reminder, this is a multi-step process, and the benefits of this work will take time to fully materialize.

Lance Tucker: We are beginning to see early results that reinforce that we are on the right path. As a reminder, this is a multi-step process, and the benefits of this work will take time to fully materialize. Turning now to first quarter results. Q1 results were choppy but broadly in line with our expectations. As we discussed on the last call, we got off to a tough start to the quarter, and while we did experience some bright spots throughout the quarter, the end of the calendar year did not improve to the degree we were looking for. It really was not until January that we started experiencing consistent, meaningful improvements to performance, and importantly, the improvement was on both a one- and a two-year basis.

Speaker #3: Turning now to first quarter results. Q1 results were choppy, but broadly in line with our expectations. As we discussed on the last call, we got off to a tough start to the quarter.

Speaker #3: And while we did experience some bright spots throughout the quarter, the end of the calendar year didn't improve to the degree we were looking for.

Speaker #3: There really wasn’t until January that we started experiencing consistent, meaningful improvements to performance, and importantly, the improvement was on both a one- and a two-year basis.

Speaker #3: January featured the launch of our 75th anniversary marketing calendar, including a throwback combo in the chicken supreme munchie meal, coupled with a new fan favorite, Jibi, a backpack charm.

Lance Tucker: January featured the launch of our 75th anniversary marketing calendar, including a Throwback Combo in the Chicken Supreme Munchie Meal, coupled with a new fan favorite, Jibbi, a backpack charm. Customers have been trying to collect all 4 Jibbies, and we've seen a great response, which drove an increase in sales of our Munchie Meals, which generate a higher average check. Customers are still careful about where they spend, and we remain committed to a strategy grounded in driving value for guests, while protecting profitability for ourselves and our franchisees. You'll see us continue to feature price-pointed value promotions, but also drive our barbell strategy with add-ons and upsales through technology.

Speaker #3: Customers have been trying to collect all four Jibis, and we've seen a great response, which drove an increase in sales of our Munchie Meals, which generate a higher average check.

Speaker #3: Customers are still careful about where they spend, and we remain committed to a strategy grounded in driving value for guests, while protecting profitability for ourselves and our franchisees.

Speaker #3: You'll see us continue to feature price-pointed value promotions, but also drive our barbell strategy with add-ons and upsells through technology. To reiterate, Q1 was in line with our expectations, and we knew the year would get off to a slow start.

Lance Tucker: To reiterate, Q1 was in line with our expectations, and we knew the year would get off to a slow start, but as the reaffirmation of our guidance reflects, we expect to see steady improvement on the top line as we move through 2026. This is really a year of getting back to our roots at Jack in the Box. We have been very deliberate in how we spend our time and capital, focusing on the fundamentals we believe are essential to sustainably improving the business. These efforts will take time to become visible in our results, but they are critical to improving consistency, profitability, and long-term returns, and I'm more convinced than ever that we're moving in the right direction.

Speaker #3: But as the reaffirmation of our guidance reflects, we expect to see steady improvement on the top line as we move through 2026. This is really a year of getting back to our roots at JACK IN THE BOX.

Speaker #3: We have been very deliberate in how we spend our time and capital, focusing on the fundamentals we believe are essential to sustainably improving the business.

Speaker #3: These efforts will take time to become visible in our results, but they are critical to improving consistency, profitability, and long-term returns. And I'm more convinced than ever that we're moving in the right direction.

Speaker #3: To frame up some of the early progress we're making on JACK's way, which is designed to improve the guest experience, I'm pleased with the progress the team has made in improving operations.

Lance Tucker: To frame up some of the early progress we're making on Jack's Way, which is designed to improve the guest experience, I'm pleased with the progress the team has made in improving operations. Last quarter, we identified a gap in field support and restructured that team. Shannon has moved these changes decisively from design to execution, meaning we have a greatly increased presence in the restaurants to give more real-time support to our franchisees and team members as they ultimately work to delight the guests. Starting in Q1, the team aligned training on our core Jack's Way principles to further simplify the experience for our team members and reinforce the importance of fundamentals. For example, aligning with our Monster Munchies promotion, the team was focused on doubling down on joyful service, and we'll continue to see the fundamentals reinforced across every marketing window.

Speaker #3: Last quarter, we identified a gap in field support and restructured that team. Shannon has moved these changes decisively from design to execution, meaning we have a greatly increased presence in the restaurants to give more real-time support to our franchisees and team members as they ultimately work to delight the guest.

Speaker #3: Starting in Q1, the team aligned training on our core JACK's Way principles to further simplify the experience for our team members and reinforce the importance of fundamentals.

Speaker #3: For example, aligning with our Monster Munchies promotion, the team was focused on doubling down on joyful service, and we'll continue to see the fundamentals reinforced across every marketing window.

Speaker #3: In Q1, we also enhanced our restaurant audit process to reinforce critical behaviors and standards to elevate the guest experience. We have additional high-touch training coming later this year, including in-restaurant workshops.

Lance Tucker: In Q1, we also enhanced our restaurant audit process to reinforce critical behaviors and standards to elevate the guest experience. We have additional high-touch training coming later this year, including in-restaurant workshops, and none of this would be successful without laying the foundation of a new field team to ensure it sticks. We are also making progress on enhancing our value proposition and menu strategy. As we continue to celebrate our 75th anniversary, you'll see brand activations leaning into classic fan favorites, while we also launch new products designed to drive customer interest and trial, leveraging innovation that can only be found at Jack in the Box. Just last week, we announced the return of one of our most popular products, the Hot Mess Burger.

Speaker #3: And none of this would be successful without laying the foundation of a new field team to ensure it sticks. We are also making progress on enhancing our value proposition and menu strategy.

Speaker #3: As we continue to celebrate our 75th anniversary, you'll see brand activations leaning into classic fan favorites, while we also launch new products designed to drive customer interest and trials, leveraging innovation that can only be found at JACK IN THE BOX.

Speaker #3: Just last week, we announced the return of one of our most popular products, the Hot Mess Burger. This limited-time offer is paired with another collectible: our antenna ball, featuring the meat riot jacket from one of our most memorable JACK commercials.

Lance Tucker: This limited time offer is paired with another collectible, our Antenna Ball, featuring the Meat Riot Jack head from one of our most memorable Jack commercials. We're also incorporating experiential marketing with an anniversary tour that kicked off in LA and is landing in Austin for Jack's actual anniversary later this month. We've continued to simplify on marketing as well. We've simplified our marketing calendar to have a more balanced and consistent focus between value and innovation. We've also reduced our media messages from 3 to 2, which allows our teams to focus on stronger execution of fewer LTOs and drive media effectiveness. The final component of Jack's Way is modernizing our restaurants. Key takeaway here is that we're focused on a highly cost-effective refresh that substantially improves the curb appeal of our restaurants.

Speaker #3: We're also incorporating experiential marketing with an anniversary tour that kicked off in LA and is landing in Austin for JACK's actual anniversary later this month.

Speaker #3: We've continued to simplify marketing as well. We simplified our marketing calendar to have a more balanced and consistent focus between value and innovation. We've also reduced our media messages from 3 to 2, which allows our teams to focus on stronger execution of fewer LTOs.

Speaker #3: And drive media effectiveness. The final component of JACK's way is modernizing our restaurants. Key takeaway here is that we're focused on a highly cost-effective refresh that substantially improves the curb appeal of our restaurants.

Speaker #3: So far, the menu refreshes we've put in market have generated a modest but meaningful uplift. And we remain encouraged by the limited investment they require.

Lance Tucker: So far, the many refreshes we've put in market have generated a modest but meaningful uplift, and we remain encouraged by the limited investment they require. Across roughly 20 restaurants in test today, we're seeing low single-digit sales lifts. We're now expanding these efforts in Southern California markets, which allows us to capture additional upside potential as we see higher clusters of refreshed restaurants. As you recall, last year, we also modernized our technology within the restaurant, rolling out both new POS and back-of-house systems. We can now start leveraging these systems not only for cost efficiencies, but also better upsell capabilities, which we expect will improve both the top and bottom lines. Before I turn it over to Dawn, I want to reiterate just a few key points.

Speaker #3: Across roughly 20 restaurants and tests today, we're seeing low single-digit sales lifts. We're now expanding these efforts in Southern California markets, which allows us to capture additional upside potential.

Speaker #3: As we see higher clusters of refreshed restaurants. As you recall, last year we also modernized our technology within the restaurant. Rolling out both new POS and back-of-house systems.

Speaker #3: We can now start leveraging these systems, not only for cost efficiencies, but also better upsell capabilities, which we expect will improve both the top and bottom lines.

Speaker #3: Before I turn it over to Dawn, I want to reiterate just a few key points. First, we're doing exactly what we said we were going to do with regard to both the JACK On Track initiatives to strengthen our business model and also with our JACK's way programs to improve operating results.

Lance Tucker: First, we're doing exactly what we said we were going to do with regard to both the Jack on Track initiatives to strengthen our business model, and also with our Jack's Way programs to improve operating results. Both are yielding tangible results. Second, we're seeing early positive results from simplification efforts we've made across ops and marketing, allowing our teams to focus on what truly matters: driving trial, frequency, and executing on a great customer experience. I'm confident that these changes will drive improved same-store sales as we move through the balance of the year. Finally, I continue to be inspired by the efforts and resiliency of both our team and our franchisees, and by the foundation we're building as we do the hard work to strengthen the business.

Speaker #3: Both are yielding tangible results. Second, we're seeing early positive results from simplification efforts we've made across ops and marketing, allowing our teams to focus on what truly matters: driving trial, frequency, and executing on a great customer experience.

Speaker #3: I'm confident that these changes will drive improved same-store sales as we move through the balance of the year. And finally, I continue to be inspired by the efforts and resiliency of both our team and our franchisees.

Speaker #3: And by the foundation we're building as we do the hard work to strengthen the business. These efforts are helping us to sharpen our discipline as a brand, and position JACK to drive sustained, profitability, and long-term shareholder value as we move through 2026.

Lance Tucker: These efforts are helping us to sharpen our discipline as a brand and position Jack to drive sustained profitability and long-term shareholder value as we move through 2026.

Ryan Ostrom: ...with that, I'll turn it over to Dawn.

Speaker #3: And with that, I'll turn it over to Dawn.

Lance Tucker: ...with that, I'll turn it over to Dawn.

Speaker #1: Thanks, Lance. And good afternoon, everyone. I will start by reviewing the details on our performance in the first quarter as well as provide an update on JACK On Track.

Dawn Hooper: Thanks, Lance, and good afternoon, everyone. I will start by reviewing the details on our performance in Q1, as well as provide an update on Jack on Track. Before I begin, I just wanted to remind everyone that the company completed the sale of Del Taco on 22 December 2025, and the results of Del Taco are excluded from continuing operations and associated results for these purposes. Q1 same-store sales for Jack in the Box decreased 6.7%, comprised of franchise restaurant same-store sales decrease of 7% and a company-owned same-store sales decrease of 4.7%. This resulted from a decline in transactions and sales mix, partially offset by menu price increases. Jack's restaurant-level margin percentage in the quarter decreased to 16.1%, down from 23.2%.

Speaker #1: Before I begin, I just wanted to remind everyone that the company completed the sale of Del Taco on December 22nd, 2025. And the results of Del Taco are excluded from continuing operations and associated results for these purposes.

Speaker #1: The first quarter of the same-store sales for JACK IN THE BOX decreased 6.7%, comprised of franchise restaurant same-store sales decrease of 7%, and a company-owned same-store sales decrease of 4.7%.

Speaker #1: This resulted from a decline in transactions and sales mix partially offset by menu price increases. JACK's restaurant-level margin percentage in the quarter decreased to 16.1%, down from 23.2%.

Speaker #1: Food and packaging costs as a percentage of sales were 29.7% for the quarter, increasing 380 basis points from the prior year. This was driven by commodity inflation of 7.1% in the quarter, the negative impact from rolling over a prior year beverage benefit, and a change in the mix of restaurants.

Dawn Hooper: Food and packaging costs as a percentage of sales were 29.7% for the quarter, increasing 380 basis points from the prior year. This was driven by commodity inflation of 7.1% in the quarter, the negative impact from rolling over a prior year beverage benefit, and a change in the mix of restaurants. Labor costs as a percentage of sales were 35.3%, increasing 200 basis points from the prior year. This increase was primarily related to a change in the mix of restaurants driven by our Chicago restaurants. We expected Chicago to have elevated labor in the quarter, and while the market did improve throughout the quarter, there is still work to be done. Shannon and team are working with urgency to address this market.

Speaker #1: Labor costs as a percentage of sales were 35.3%, increasing $200 basis points from the prior year. This increase was primarily related to a change in the mix of restaurants driven by our Chicago restaurants.

Speaker #1: We expected Chicago to have elevated labor in the quarter, and while the market did improve throughout the quarter, there is still work to be done.

Speaker #1: Shannon and team are working with urgency to address this market. Occupancy and other costs increased 120 basis points, driven by higher costs for utilities and other operating expenses.

Dawn Hooper: Occupancy and other costs increased 120 basis points, driven by higher costs for utilities and other operating expenses. Franchise level margin was $84.1 million, or 38.6% of franchise revenues, compared to $97.1 million, or 40.9% a year ago. The decrease was mainly driven by lower sales, driving lower rent and royalty revenue, and a decrease in the number of restaurants. Turning to restaurant count, there were 6 restaurant openings and 14 restaurant closures in the quarter. SG&A for the quarter was $37 million, or 10.6% of revenues, compared to $41.2 million or 11.1% a year ago.

Speaker #1: Franchise-level margin was 84.1 million, or 38.6% of franchise revenues, compared to 97.1 million, or 40.9% a year ago. The decrease was mainly driven by lower sales driving lower rent and royalty revenue, and a decrease in the number of restaurants.

Speaker #1: Turning to restaurant count, there were six restaurant openings and 14 restaurant closures in the quarter. SG&A for the quarter was $37 million, or 10.6% of revenues, compared to $41.2 million, or 11.1%, a year ago.

Speaker #1: The decrease of 4.1 million was primarily due to the market fluctuations of our COLI policies and the current period income from our transition services agreement.

Dawn Hooper: The decrease of $4.1 million was primarily due to the market fluctuations of our COLI policies and the current period income from our transition services agreement, partially offset by increases in information technology expenses and digital advertising costs. Excluding net COLI gains of $2.4 million, as well as advertising costs, G&A was 2.5% of total system-wide sales for the quarter. Following the Del Taco sale, we are generating income associated with a transition services agreement, or TSA, and we received approximately $900,000 in Q1. We expect our TSAs to largely be completed by the end of Q2. For the full year, we expect the income to be nominal, no more than around $2 million. This income is included in our reported G&A figures.

Speaker #1: Partially offset by increases in information technology expenses and digital advertising costs. Excluding that COLI gain of $2.4 million, as well as advertising costs, G&A was 2.5% of total system-wide sales for the quarter.

Speaker #1: Following the Del Taco sale, we are generating income associated with the transition services agreement, or TSA. And we received approximately $900,000 in the first quarter.

Speaker #1: We expect our TSAs to largely be completed by the end of the second quarter. For the full year, we expect the income to be nominal, no more than around 2 million.

Speaker #1: This income is included in our reported G&A figures. Other operating expenses, net, were $8.1 million for the quarter, which include proxy contest fees and professional fees for a tax refund settlement, partially offset by gains on real estate sales.

Dawn Hooper: Other operating expenses net were $8.1 million for the quarter, which include proxy contest fees and professional fees for a tax refund settlement, partially offset by gains on real estate sales. The effective tax rate for continuing operations for Q1 2026 was 32.4%, compared to 30% for the same quarter a year ago. The adjusted tax rate used to calculate the non-GAAP operating earnings per share this quarter was 31.2%. Earnings from continuing operations was $14.4 million for Q1 2026, as compared to $31 million for Q1 of the prior year.

Speaker #1: The effective tax rate for continuing operations for the first quarter of 2026 was 32.4%, compared to 30% for the same quarter a year ago.

Speaker #1: The adjusted tax rate used to calculate the non-GAAP operating earnings per share this quarter was 31.2%. Earnings from continuing operations were $14.4 million for the first quarter of 2026, as compared to $31 million for the first quarter of the prior year.

Speaker #1: We reported a GAAP diluted earnings per share from continuing operations for the first quarter of $0.75, compared to diluted net earnings per share from continuing operations of $1.61 in the same period of the prior year.

Dawn Hooper: We reported a GAAP diluted earnings per share from continuing operations for Q1 of $0.75, compared to diluted net earnings per share from continuing operations of $1.61 in the same period as the prior year. Operating earnings per share, which includes adjustments for certain items, was $1 for the quarter versus $1.86 in Q1 of the prior year. Consolidated Adjusted EBITDA was $68.2 million, down from $88.8 million in the prior year, due primarily to the impact from sales deleverage. Now for some specifics regarding Jack on Track. As a reminder, while Lance discussed elements of Jack's Way, which focuses on operational and sales improvements, Jack on Track is meant to bolster the long-term financial performance of the company by strengthening the balance sheet and positioning the company for sustainable growth.

Speaker #1: Operating earnings per share, which includes adjustments for a certain item, was $1 for the quarter, versus $1.86 in the first quarter of the prior year.

Speaker #1: Consolidated adjusted EBITDA was $82.6 million, down from $88.8 million in the prior year, due primarily to the impacts from sales deleverage. Now, for some specifics regarding JACK On Track.

Speaker #1: As a reminder, while Lance discussed elements of JACK's Way, which focuses on operational and sales improvements, JACK On Track is meant to bolster the long-term financial performance of the company by strengthening the balance sheet and positioning the company for sustainable growth.

Speaker #1: I've already mentioned a few points in regards to our JACK On Track plan, but to put a finer point on it. First, we simplified the company by selling Del Taco and successfully closing on the transaction in December.

Dawn Hooper: I've already mentioned a few points in regards to our Jack on Track plan, but to put a finer point on it. First, we simplified the company by selling Del Taco and successfully closing on the transaction in December. Second, we are focusing on franchisee economics by closing underperforming restaurants. In Q1, franchisees closed 12 restaurants. Based on closures so far, we have generally seen a roughly 30% sales benefit to nearby restaurants.... This element of Jack on Track is moving a little slower than we would have expected, as franchisees are evaluating lease dynamics and sales transfer benefits on a case-by-case basis. Third, we are preserving our capital expenditures for technology and restaurant reimages. For Q1, our capital expenditures were $23.2 million, which primarily includes spending on restaurant information technology.

Speaker #1: Second, we are focusing on franchisee economics by closing underperforming restaurants. In the first quarter, franchisees closed 12 restaurants. Based on closures so far, we have generally seen a roughly 30% sales benefit to nearby restaurants.

Speaker #1: This element of JACK On Track is moving a little slower than we would have expected, as franchisees are evaluating lease dynamics and sales transfer benefits on a case-by-case basis.

Speaker #1: Third, we are preserving our capital expenditures for technology and restaurant re-images. For the first quarter, our capital expenditures were 23.2 million, which primarily includes spending on restaurant information technology.

Speaker #1: Approximately $8 million reported in Q1 relates to prior year expenditures, primarily for our new Chicago restaurants, that were incurred in fiscal '25 but paid in fiscal '26.

Dawn Hooper: Approximately $8 million reported in Q1 relates to prior year expenditures, primarily for our new Chicago restaurants that were incurred in fiscal 2025, but paid in fiscal 2026. This is solely a timing impact and does not represent incremental fiscal year 2026 spend. Lastly, and importantly, our focus on debt reduction. During the quarter, we made a partial prepayment of $105 million on our August 2026 tranche. Our total debt outstanding at quarter end was $1.6 billion, and our net debt to adjusted EBITDA leverage ratio was 6.5 times. Please note that this figure now excludes any historical adjusted EBITDA impact for Del Taco. We remain committed to paying down an additional $200 million in debt over the course of our Jack on Track plan.

Speaker #1: This is solely a timing impact and does not represent incremental fiscal year 2026 spend. Lastly, and importantly, our focus on debt reduction. During the quarter, we made a partial prepayment of $105 million on our August 2026 tranche.

Speaker #1: Our total debt outstanding at quarter end was $1.6 billion, and our net debt to adjusted EBITDA leverage ratio was 6.5 times. Please note that this figure now excludes any historical adjusted EBITDA impact for Del Taco.

Speaker #1: We remain committed to paying down an additional $200 million in debt over the course of our JACK On Track plan. As it pertains to real estate sales, we generated $10.9 million of proceeds in the first quarter, with associated gains of approximately $6.3 million.

Dawn Hooper: As it pertains to real estate sales, we generated $10.9 million of proceeds in Q1, with associated gains of approximately $6.3 million. We expect to sell real estate with proceeds of $50 to 60 million by the end of fiscal year 2026, with the expectation that these proceeds, along with cash on hand, would be applied to pay down debt. We are thoughtfully assessing refinancing options related to our upcoming tranches, taking into account market conditions, interest rates, and our long-term capital structure objectives. It is likely we will be in the market in the coming months. Lastly, as we mentioned in today's release, we are reiterating our guidance from November 2025. In closing, this quarter reflects steady progress on Jack on Track as we continue to build a stronger foundation for sustainable long-term growth.

Speaker #1: We expect to sell real estate with proceeds of $50 to $60 million by the end of fiscal year 2026, with the expectation that these proceeds, along with cash on hand, would be applied to pay down debt.

Speaker #1: We are thoughtfully assessing refinancing options related to our upcoming tranches, taking into account market conditions, interest rates, and our long-term capital structure objectives. It is likely we will be in the market in the coming months.

Speaker #1: Lastly, as we mentioned in today's release, we are reiterating our guidance from November 2025. In closing, this quarter reflects steady progress on JACK On Track as we continue to build a stronger foundation for sustainable, long-term growth.

Speaker #1: We look forward to keeping you updated on our progress throughout this fiscal year. Thanks again for your time this afternoon. Operator, please open the line for questions.

Dawn Hooper: We look forward to keeping you updated on our progress throughout this fiscal year. Thanks again for your time this afternoon. Operator, please open the line for questions.

Operator: As a reminder, if you'd like to ask a question, press star, followed by one on the telephone keypad. Your first question comes from the line of Alex Slagle from Jefferies. Your line is live.

Speaker #2: As a reminder, if you'd like to ask a question, press star, followed by one, on the telephone keypad. Your first question comes from your line.

Speaker #2: Alex Swigle from Jefferies. Your line is live.

Speaker #3: Hey, thanks. And good afternoon. I guess I wanted to follow up on just some of the trends you're seeing I mean, it sounds like the initial response to some of the 75th anniversary work's been good.

Andy Barish: Hey, thanks, and good afternoon. I guess I wanted to follow up on just some of the trends you're seeing. I mean, it sounds like the initial response to some of the 75th anniversary work's been good, and January trends were improved, and maybe you could elaborate on what you saw. I'm not sure, like, how much there's weather that maybe came into and impacted at all in your system into February, if that's something we should consider also.

Alex Slagle: Hey, thanks, and good afternoon. I guess I wanted to follow up on just some of the trends you're seeing. I mean, it sounds like the initial response to some of the 75th anniversary work's been good, and January trends were improved, and maybe you could elaborate on what you saw. I'm not sure, like, how much there's weather that maybe came into and impacted at all in your system into February, if that's something we should consider also.

Speaker #3: And January trends were improved in maybe you could elaborate on what you saw. I'm not sure how much there was weather that maybe came into an impact at all in your system, into February, if that's something we should consider also.

Speaker #4: Sure. Hi, Alex. So, kind of to your point, once we hit the beginning of '26, we did start to see some kind of meaningful improvements, certainly when we got off to the new window.

Lance Tucker: Sure. Hi, Alex. Kind of to your point, once we hit the beginning of 2026, we did start to see some kind of meaningful improvements. Certainly when we got off to the new window, that helped a lot. As we got into Q2, because bear in mind, our quarter ended kind of mid-January, as we got into Q2, we're really seeing kind of same-store sales play out the way we thought they would. We started the second quarter really a couple of hundred basis points better than we were in the first quarter, and that's before the weather impact. To your question about weather, we're actually over 400 basis points better when you factor in the winter storm, which on a full quarter basis, will have about a 60 or 70 basis point impact to the quarter.

Speaker #4: That helped a lot. And as we got into Q2, because bear in mind our quarter ended kind of mid-January as we got into Q2, we're really seeing kind of same-store sales play out the way we thought they would.

Speaker #4: We started the second quarter really a couple hundred basis points better than we were in the first quarter. And that's before the weather impact, to your question about weather.

Speaker #4: We're actually over 400 basis points better when you factor in the winter storm, which on a full quarter basis will have about a 60 or 70 basis point impact to the quarter.

Speaker #4: Since we're talking about roughly a month of impact, it's a couple hundred basis points just for the month. So when you factor out the weather, we're really low single digits right now, which we're pleased with.

Lance Tucker: Since we're talking about, you know, roughly a month of impact, it's 200 basis points just for the month. So when you factor out the weather, we're really low single digits right now, which we're pleased with. We're not quite where we want to be, but -200. Let me rephrase that. I think I misspoke there. We're not quite where we want to be, but we're certainly gaining on it, and we're getting really good initial response to our 75th anniversary marketing.

Speaker #4: We're not quite where we want to be. But—negative, let me rephrase that. I think I misspoke there. We're not quite where we want to be, but we're certainly gaining on it, and we're getting really good initial response to our 75th anniversary marketing.

Speaker #3: Awesome. The Chicago performance and the efforts to recover from some of the labor inefficiencies there—what's the issue going on there? I guess, why is it still a drag?

Andy Barish: Awesome. The Chicago performance and the efforts to recover from some of the labor inefficiencies there, what's the issue going on there? I guess, why is it still a drag? I would have thought it was more about the openings and staffing up, and that would sort of you'd be able to get out of that, you know, heading into the Q2, I guess.

Alex Slagle: Awesome. The Chicago performance and the efforts to recover from some of the labor inefficiencies there, what's the issue going on there? I guess, why is it still a drag? I would have thought it was more about the openings and staffing up, and that would sort of you'd be able to get out of that, you know, heading into the Q2, I guess.

Speaker #3: I would have thought it was more about the openings and staffing up, and that would sort of be able to get out of that heading into the 2Q, I guess.

Lance Tucker: We're still working on it, as you can see from the results. I think from a top-line standpoint, we're kind of performing reasonably well, particularly given that we have not yet turned on our 24-hour operations. We've not yet turned on digital. We don't have our full menu yet, so there's still a lot of upside on the top line. We haven't turned those things on yet because we do still have some issues we're working through, and I think the easiest thing I can say about it is, it's a tough labor market. We opened eight restaurants in the span of under three months, which for us and our corporate operations side is a lot, and we're just still dialing in the PNL there. So, it is one of the big priorities we have right now.

Speaker #4: Well, we're still working on it. As you can see from the results, I think from a top-line standpoint, we're kind of performing reasonably well, particularly given that we have not yet turned on our 24-hour operations.

Speaker #4: We've not yet turned on digital. We don't have our full menu yet, so there's still a lot of upside on the top line. We haven't turned those things on yet because we do still have some issues we're working through.

Speaker #4: And I think the easiest thing I can say about it is it's a tough labor market. We opened eight restaurants in the span of under three months, which for us and our corporate operations side is a lot.

Speaker #4: And we're just still dialing in the P&L there, so it is one of the big priorities we have right now. We're spending a lot of time up in Chicago to get that fixed.

Lance Tucker: We're spending a lot of time up in Chicago to get that fixed. I think it will be fixed in the coming months, and then you'll see us be able to turn on the sales side full steam, and I think you'll see that market come around the way we expect it to.

Speaker #4: I think it will be fixed in the coming months. And then you'll see us be able to turn on the sales side, full steam, and I think you'll see that market come around the way you've expected to.

Speaker #5: And the only thing I'd add to that, Lance, is we did expect continued margin compression of Chicago in our guidance that we provided specifically in Q1.

Dawn Hooper: The only thing I'd add to that, Lance, is we did expect continued margin compression in Chicago in our guidance that we provided, specifically in Q1.

Speaker #3: All right. Thanks.

Sara Senatore: All right, thanks!

Alex Slagle: All right, thanks!

Speaker #2: Your next question comes from the line of Jeff Bandstein from Barclays. Your line is live.

Operator: Your next question comes from the line of Jeff Bernstein from Barclays. Your line is live.

Speaker #6: Hi, good afternoon. This is Product One for Jeff. Thanks for the question. Lance, I had a question on franchisee four-wall margins. They were presumably below the company margin at 16.1%, given the ongoing disparity in comp performance.

Jeffrey Bernstein: Hi, good afternoon. This is Pratik on for Jeff. Thanks for the question. Lance, I had a question on franchisee four-wall margins. They were presumably below the company margin at 16.1%, given the ongoing disparity in comp performance. Beyond Jack on Track, is there anything in the short term that you can do to help franchisees navigate this difficult environment, maybe on the commodity side, to secure better prices or maybe rent relief? And I have one follow-up.

Pratik Patel: Hi, good afternoon. This is Pratik on for Jeff. Thanks for the question. Lance, I had a question on franchisee four-wall margins. They were presumably below the company margin at 16.1%, given the ongoing disparity in comp performance. Beyond Jack on Track, is there anything in the short term that you can do to help franchisees navigate this difficult environment, maybe on the commodity side, to secure better prices or maybe rent relief? And I have one follow-up.

Speaker #6: Beyond JACK On Track, is there anything in the short term that you can do to help franchisees navigate this difficult environment? Maybe on the commodity side to secure better prices, or maybe rent relief?

Speaker #6: And I have one follow-up.

Lance Tucker: So generally speaking, our franchisees have pretty good economics with AUVs, you know, still approaching $2 million. But you're right, we are seeing, you know, pressure on four-wall EBITDA right now between the sales conditions and then beef inflation in particular. So, you know, at this point, no, we're not doing any kind of blanket assistance. But we are looking at what we need to do in those kind of one-off cases where we have a franchisee struggling. But generally speaking, I mean, as you can imagine right now, particularly with where beef is, yeah, the four-wall margins are not where they need to be, but we're doubling down, doing a lot on the profitability side. We just actually restructured our team to make sure we're more focused on profitability.

Speaker #4: So, generally speaking, our franchisees have pretty good economics with AUVs—still approaching $2 million. But you're right, we are seeing pressure on four-wall EBITDA right now between the sales conditions and then beef inflation in particular.

Speaker #4: So at this point, no, we're not doing any kind of blanket assistance. But we are looking at what we need to do in those kind of one-off cases where we have a franchisee struggling.

Speaker #4: But generally speaking, I mean, as you can imagine, right now, particularly with where beef is, yeah, the four-wall margins are not where they need to be, but we're doubling down, doing a lot on the profitability side.

Speaker #4: We just actually restructured our team to make sure we're more focused on profitability. We're doing things like rolling out a new soft drink dispenser.

Lance Tucker: We're doing things like rolling out a new soft drink dispenser. We're doing a number of things within the supply chain to try to cut costs. So yeah, we're kind of putting a full court press on our digital or on all of our profitability. And then we're also making some revamps to our digital programs, including loyalty, that are gonna add some profitability back in that channel as well.

Speaker #4: We're doing a number of things within the supply chain to try to cut costs. So yeah, we're kind of putting a full-core press on our digital or on all of our profitability.

Speaker #4: And then we're also making some revamps to our digital programs including loyalty. They're going to add some profitability back in that channel as well.

Speaker #3: Got it. Thank you for that. And Dawn, it was encouraging to see the company traffic trend improve modestly on a two-year basis. I believe you were at the mid-2% pricing range to close fiscal '25.

Jeffrey Bernstein: Got it. Thank you for that. And Dawn, it was encouraging to see the company traffic trend improve modestly on a two-year basis. I believe you were at the mid-2% pricing range to close fiscal 2025, and you ended this quarter at 3%, it looks like, per the 10-Q. Just wanted to get your thoughts on how you think about the price value equation in this environment, while at the same time, you know, protecting your margins and unit economics. Thank you.

Pratik Patel: Got it. Thank you for that. And Dawn, it was encouraging to see the company traffic trend improve modestly on a two-year basis. I believe you were at the mid-2% pricing range to close fiscal 2025, and you ended this quarter at 3%, it looks like, per the 10-Q. Just wanted to get your thoughts on how you think about the price value equation in this environment, while at the same time, you know, protecting your margins and unit economics. Thank you.

Speaker #3: And you ended this quarter at 3%. It looks like per the 10Q. Just wanted to get your thoughts on how you think about the price-value equation in this environment while at the same time protecting your margins and unit economics.

Speaker #3: Thank you.

Speaker #4: This is Lance. I'll start with that one. And Dawn, come on and jump in here as she needs to. We have been able to take a little more price on the company side.

Lance Tucker: This is Lance. I'll start with that one, and then Dawn can come on and jump in here as she needs to. We have been able to take a little more price on the company side. It's interesting, the franchisees have taken a little more price than we had historically, so our absolute prices are still lower. But throughout the quarter, we were able to take a little more price on the company side and still leave ourselves in a spot where we feel very comfortable with the value proposition we're giving to our guests. The other thing we did do during the quarter was we took several of our bundles and made sure that we lowered prices in one of our chicken bundles, in one of our burger combos, in a breakfast combo.

Speaker #4: It's interesting. The franchisees have taken a little more price than we had historically, so our absolute prices are still lower. But throughout the quarter, we were able to take a little more price on the company side and still leave ourselves in a spot where we feel very comfortable with the value proposition we're giving to our guests.

Speaker #4: The other thing we did do during the quarter was we took several of our bundles and made sure that we lowered prices kind of in one of our chicken bundles and one of our burger combos.

Speaker #4: And a breakfast combo, we also added ounces into the soft drink amounts. So we're doing a lot of things to try to make sure that we're showing that value to the customer.

Lance Tucker: We also added ounces into the soft drink amounts. So we're doing a lot of things to try to make sure that we're showing that value to the customer, while at the same time, making sure that we're protecting profitability, not only here on the corporate side, but ultimately the franchisees as well.

Speaker #4: While at the same time making sure that we're protecting profitability not only here on the corporate side, but ultimately for the franchisees as well.

Speaker #3: Thank you very much.

Jeffrey Bernstein: Thank you very much.

Pratik Patel: Thank you very much.

Speaker #2: Your next question comes from the line of Sarah Sanator from Bank of America. Your line is live.

Operator: Your next question comes from the line of Sara Senatore from Bank of America. Your line is live.

Speaker #6: Hi, thanks for the question. Isaiah on for Sarah. Just kind of touching on what you were just discussing—anything specific as to why there was such a large gap in comp between the company restaurants and the franchise ones?

Sara Senatore: Hi, thanks for the question. Isaiah on for Sara. Just kind of touching on what you were just discussing, anything specific as to why there was such a large gap in comp between the company restaurants and the franchise ones? Maybe anything related to operations, tech, anything that you have there?

[Analyst] (Bank of America): Hi, thanks for the question. Isaiah on for Sara. Just kind of touching on what you were just discussing, anything specific as to why there was such a large gap in comp between the company restaurants and the franchise ones? Maybe anything related to operations, tech, anything that you have there?

Speaker #6: Maybe anything related to operations, tech, anything that you have there?

Lance Tucker: I'd say a couple things. One is we think a little bit of pricing disparity, but I think probably the bigger factor is our company restaurants are pretty much 100 percent religious about opting into the offers that we do on the digital side. The franchisees tend to be a little more selective as to which actual promotions they're gonna opt into. And so we've seen on the company side, a lot more overall effectiveness on the digital side than we have with the franchisees, and I think that's probably the biggest singular driver.

Speaker #4: I'd say a couple of things. One is we think a little bit of price disparity, but I think probably the bigger factor is our company restaurants are pretty much 100% religious about opting into the offers that we do on the digital side.

Speaker #4: The franchisees tend to be a little more selective as to which actual promotions they're going to opt into. And so we've seen on the company side, a lot more overall effect from this on the digital side than we have with the franchisees.

Speaker #4: And I think that's probably the biggest singular driver.

Speaker #6: Got it, thanks. And then, just kind of switching gears, I was wondering if you could give us a little color on how you guys have historically competed against larger competitors during periods of intense value competition.

Jeffrey Bernstein: Got it. Thanks. And then just kind of switching gears. Just thinking about how if you could give us a little color on just how you guys have historically competed against larger competitors, just in periods of intense value competition. And when you're thinking about scale, do you guys think more about the importance of competing nationally, or do you view scale on a more local, you know, easier to compete kind of basis more?

[Analyst] (Bank of America): Got it. Thanks. And then just kind of switching gears. Just thinking about how if you could give us a little color on just how you guys have historically competed against larger competitors, just in periods of intense value competition. And when you're thinking about scale, do you guys think more about the importance of competing nationally, or do you view scale on a more local, you know, easier to compete kind of basis more?

Speaker #6: And when you're thinking about scale, do you guys think more about the importance of competing nationally, or do you view scale on a more local, easier-to-compete kind of basis more?

Speaker #4: Let me start with that, and then I'll ask Ryan to jump in and supplement me a little bit too. But I think, first of all, we've always been smaller than some of these really big chains like a McDonald's or Taco Bell, Burger King, whoever it may be.

Lance Tucker: Let me start with that, and then I'll, I'll ask Ryan to jump in and, and supplement me a little bit, too. But I think, first of all, you know, we've always been smaller than some of these really big chains, like a McDonald's or Taco Bell, Burger King, whoever it may be. I think in order for us to be successful when they're out there with heavy value, we've got to have our own consistent value, and then we've got to lean into what really differentiates Jack, which is innovation. We have a lot of innovation, both within our LTOs but also within our core menu. And so making sure we've got our own consistent price, that that price is in a reasonable spot, and that we continue to bring innovative products you can't get somewhere else, is the, is the biggest piece.

Speaker #4: I think, in order for us to be successful when they're out there with heavy value, we've got to have our own consistent value, and then we've got to lean into what really differentiates JACK, which is innovation.

Speaker #4: We have a lot of innovation, both within our LTOs but also within our core menu. And so, making sure we've got our own consistent price, that that price is in a reasonable spot, and that we continue to bring innovative products.

Speaker #4: Can't get somewhere else is the biggest piece. And I'll turn it over to Ryan and let him supplement that.

Lance Tucker: And I'll turn it over to Ryan and let him supplement that.

Speaker #6: Yeah. We know to be relevant. We have to have that price point of value, which we have in every single window moving forward, which is something we didn't have in '25.

Ryan Ostrom: Yeah, we know to be relevant, we have to have that price point and value, which we have in every single window, moving forward, which is something we did not have in 25. That really goes after our value guest, but it is about the distinctive and ownable value that we have out there. When you think about Jack in the Box, it is really about that abundance value. It is about the Munchie Meals. We saw a great response to our Jibbies, so adding some gift with purchase on our abundant meals has done really well. On top of aggressive, quick hit value, I mean, we are an iconic brand that has tacos, and our ability to pulse in some aggressive, disruptive price points on tacos, celebrating our seventy-fifth, like we are, once a month with $0.75 tacos.

Speaker #6: So that really goes after that value guess. But it's about the distinctive and ownable value that we have out there. So when you think about Jack in the Box, it's really about that abundance value.

Speaker #6: It's about the Munchie Meals. We saw great response to our Jibby's. So adding some gift with purchase on our abundant meals has done really well.

Speaker #6: On top of aggressive quick-hit value, I mean, we are an iconic brand that has tacos. And so our ability to pulse in some aggressive, disruptive price points on tacos—celebrating our 75th, like we are once a month with 75-cent tacos.

Speaker #6: We have a 75-cent Jumbo Jacks coming next week or this Saturday. These types of offers that are ownable and distinctive to us really drive a quick impact to drive traffic to our brand.

Ryan Ostrom: We have $0.75 Jumbo Jacks coming next week or this Saturday. These type of offers that are ownable and distinctive to us really drive a quick impact to drive traffic to our brand. But we also have to look at value differently, and where we really need to compete is how do we improve value for the guest through quality? And so it's not all just about price points; it's about improving the quality of our goods. And we've already executed some of that in our latest window with improving our, our core grilled chicken. And our next step is looking across our core platform and improving across our items to make sure that value for the money score, that's really important to the guest, matches up with the product they're getting. And so you'll see a lot more quality improvements from our brand moving forward.

Speaker #6: But we also have to look at value differently, and where we really need to compete is: how do we improve value for the guests through quality?

Speaker #6: And so it's not all just about price points. It's about improving the quality of our goods. And we've already executed some of that in our latest window with improving our core grilled chicken.

Speaker #6: And our next step is looking across our core platform and improving across our items to make sure that value-for-the-money score that's really important to the guest matches up with the product they're getting.

Speaker #6: And so you'll see a lot more quality improvements from our brand moving forward.

Speaker #2: Your next question comes from the line of Andrew Charles from TD Cowen. Your line is live.

Operator: Your next question comes from the line of Andrew Charles from TD Cowen. Your line is live.

Speaker #3: Great. Thanks. Dawn, you caught up to 7% commodity inflation in the quarter. Can you just remind us what you're expecting for commodity inflation for the year?

Andrew Charles: Great, thanks. Dawn, you called out the 7% commodity inflation in the quarter. Can you just remind us what you're expecting, you know, for commodity inflation for the year? And really, just how much of that 7% increase was in beef as well as the forecast for that within the 2026 guidance.

Speaker #3: And really just how much of that 7% increase was in beef as well as the forecast for that within the 26 guidance?

Speaker #5: Yeah. So our guidance still stands. We had guided to mid-single digits back in November. Beef is definitely the most impactful Q1 actually came in a little higher than we had anticipated.

Dawn Hooper: Yeah. So, our guidance still stands. We had guided to mid-single digits back in November. Beef is definitely the most impactful. Q1 actually came in a little higher than we had anticipated, but you can look to see beef up double digits, and as the year continues, that impact will moderate. It was definitely the highest in Q1.

Speaker #5: But you can look to see beef up double digits, and as the year continues, that impact will moderate. It was definitely the highest in Q1.

Speaker #3: Great. Thank you.

Andrew Charles: Great. Thank you.

Speaker #2: Your next question comes from the line of Gregory Frankfort from Guggenheim. Your line is live.

Operator: Your next question comes from the line of Gregory Francfort from Guggenheim. Your line is live.

Gregory Francfort: Hey, hey, thanks for the question. My first one, just on weather. Is it—I guess there was some maybe drag later in January, but you guys have a lot of stores on the West Coast. Are you guys able to identify if it may have helped late December and early January?

Speaker #3: Hey, thanks for the question. My first one's just on weather. I guess there was some, maybe, drag later in January, but you guys have a lot of stores on the West Coast.

Speaker #3: Are you guys able to identify if it may have helped late December and early January?

Speaker #4: We didn't see any meaningful improvements or benefits, I would say, relative to weather. Certainly, everything we saw was more related, particularly with the big Texas footprint and where we are in the Midwest.

Lance Tucker: We didn't see any meaningful improvements or benefits, I would say, relative to weather. Certainly everything we saw was more related, particularly with the big Texas footprint and where we are in the Midwest, to I think it was called Fern, Winter Storm Fern. That impacted us by 200 basis points, actually.

Speaker #4: To think, it was called Firm—Winter Storm Firm. That impacted us by a couple hundred basis points, actually.

Gregory Francfort: Got it. And then just maybe going back to kind of franchisee health and performance. How much is beef up now versus where it was a few years ago? And if that reverses, I guess, what could that do to franchisee cash flows, and do you expect that to happen over the next 12 to 18 months? Thanks.

Speaker #3: Got it. And then, just maybe going back to kind of franchisee health and performance—how much is beef up now versus where it was a few years ago, and is that reversing?

Speaker #3: I guess, what could that do to franchisee cash flows? And do you expect that to happen over the next 12 to 18 months? Thanks.

Speaker #4: I think Dawn's going to look back and see if she can give a reasonable estimate as to what it's done for the last few years.

Lance Tucker: I think Dawn's gonna look back and see if she can give a reasonable estimate as to what it's done for the last few years. I don't have that off the top of my head. Obviously, though, beef is trading, you know, very, very high relative to where it's been, and we would expect a fairly significant benefit if it were to go down. As Dawn said, we expect it to moderate some throughout 2026. But I think at least as far as the predictions I've seen, the next 12 to 18 months, we wouldn't expect it to become a tailwind.

Speaker #4: I don't have that off the top of my head. Obviously, though, beef is trading very, very high relative to where it's been. And we would expect a fairly significant benefit if it were to go down, as Dawn said.

Speaker #4: We expect it to moderate some throughout '26. But I think, at least as far as the predictions I've seen, over the next 12 to 18 months, we wouldn't expect it to become a tailwind.

Speaker #3: Okay. Thanks for the perspective, Lance.

Gregory Francfort: Okay. Thanks for the perspective, Lance.

Speaker #2: Your next question comes from the line of Samantha Chang from Goldman Sachs. Your line is live.

Operator: Your next question comes from the line of Samantha Chang from Goldman Sachs. Your line is live.

Speaker #7: Hi. This is Samantha for Christine Cho. Thanks for taking my question. I wanted to ask about breakfast. I know many of your competitors have called out the steak part as an underperforming part of the day as it tends to be more economically sensitive.

Ryan Ostrom: Hi, this is Samantha. I'm for Christine Cho. Thanks for taking my question. I wanted to ask about breakfast. I know many of your competitors have called out this day part as an underperforming part of the day, as it tends to be more economically sensitive, with some peers recently making breakfast optional for franchisees. Could you share an update on how you're thinking about breakfast and how this day part has performed at Jack relative to the rest of the day, particularly following the launch of your Munch Better Deals lineup? Thanks.

[Analyst] (Goldman Sachs): Hi, this is Samantha. I'm for Christine Cho. Thanks for taking my question. I wanted to ask about breakfast. I know many of your competitors have called out this day part as an underperforming part of the day, as it tends to be more economically sensitive, with some peers recently making breakfast optional for franchisees. Could you share an update on how you're thinking about breakfast and how this day part has performed at Jack relative to the rest of the day, particularly following the launch of your Munch Better Deals lineup? Thanks.

Speaker #7: With some peers recently making breakfast optional for franchisees, could you share an update on how you're thinking about breakfast and how the steak part has performed at JACK relative to the rest of the day, particularly following the launch of your Munch Better Deals lineup?

Speaker #7: Thanks.

Speaker #4: Sure. So, breakfast for us has actually been pretty consistent. It's always been a big part of what we do at Jack. And of course, we have breakfast all day, which I'm sure you're aware.

Lance Tucker: Sure. So breakfast for us has actually been pretty consistent. It's always been a big part of what we do at Jack, and of course, we have breakfast all day, which I'm sure you're aware. So from our perspective, as we look, like, at this past quarter, as an example, it was pretty consistent with all our other day parts, with the exception of late night, which is where we really had some gains. So overall, we haven't seen much change. We are aware that other competitors are giving some optionality to their franchisees as to whether or not they do breakfast, but we'll have to wait and see if that impacts us.

Speaker #4: So from our perspective, as we look at this past quarter as an example, it was pretty consistent with all other day parts with the exception of late night, which is where we really had some gains.

Speaker #4: So overall, we haven't seen much change. We are aware that other competitors are giving some optionality to their franchisees as to whether or not they do breakfast, but we'll have to wait and see if that impacts us.

Speaker #3: Yeah. And with us, it's all-day breakfast is a core of our brand that's been around for since this brand's been around. So basically, it is something that we don't we take really serious on making sure that we continue to drive breakfast and an all-day solution to our guests.

Ryan Ostrom: Yeah, with us, it's all-day breakfast is the core of our brand that's been around since this brand's been around. So basically, it's something that we take really serious on making sure that we continue to drive breakfast and an all-day solution to our guests.

Speaker #2: Your next question comes from the line of Karen Holthouse from Citi. Your line is live.

Operator: Your next question comes from the line of Karen Holthouse from Citi. Your line is live.

Speaker #8: Hi, this is Karen on for John Tower. Just going back to the remodel program, I don't know if you've shared, or are willing to share, your guardrails around what you're thinking in terms of your cost per unit?

Jon Tower: ... Hi, this is Karen, on for Jon Tower. Just going back to the remodel program, I don't know if you've shared or are willing to share your guardrails around what you're thinking in terms of your cost per unit. What are, like, the key elements you think are really, you know, driving that curbside appeal or change in curbside appeal? And, you know, how do franchisees plan on funding this? Do they think, you know, they can do it through existing cash flows? Is there appetite for financing it? Anything on that would be great.

Karen Holthouse: ... Hi, this is Karen, on for Jon Tower. Just going back to the remodel program, I don't know if you've shared or are willing to share your guardrails around what you're thinking in terms of your cost per unit. What are, like, the key elements you think are really, you know, driving that curbside appeal or change in curbside appeal? And, you know, how do franchisees plan on funding this? Do they think, you know, they can do it through existing cash flows? Is there appetite for financing it? Anything on that would be great.

Speaker #8: What are the key elements you think are really driving that curbside appeal or change in curbside appeal? And how do franchisees plan on funding this?

Speaker #8: Do they think they can do it through existing cash flows? Is there appetite for financing it? Anything on that would be great.

Speaker #4: Sure, Karen. As I know, I've said a couple of times here over the last few of these calls, our ultimate goal is to get a full-scale re-image program established and going kind of towards the end of the year.

Lance Tucker: Sure, Karen. You know, as, as I know I've said a couple of times here over the last few of these calls, our ultimate goal is to get a full-scale reimage program established and going kinda towards the end of the year. Really, what we're doing right now, though, is much more of what we're considering kind of a mini refresh. And the intent, honestly, is just to improve the curb appeal until we get to such point as we can do the full reimage program. Because as you know, even if we kick that off, you know, within the next twelve months or so, it takes usually a number of years for those things to play out. So this is really more cosmetic, is what I would tell you. It's paint, it's restriping and sealing the parking lot.

Speaker #4: Really, what we're doing right now, though, is much more of what we're considering kind of a mini-refresh. The intent, honestly, is just to improve the curb appeal until we get to such a point that we can do the full reimage program because, as you know, even if we kick that off within the next 12 months or so, it usually takes a number of years for those things to play out.

Speaker #4: So this is really more cosmetic, is what I would tell you. It's paint, it's restriping and sealing the parking lot, it's cleaning up the landscaping.

Lance Tucker: It's cleaning up the landscaping. It's making sure the drive path looks good, and that can be done for a very, very low cost. You know, I'm talking under $20,000, and franchisees tend to have a way of getting things done more cheaply than we do. So for them, it's probably under $10,000. So this is the kind of thing that really is intended just to give us a better curb appeal, get us through to the point when we are ready to get the full-scale reimage program going, and do so at a tremendously economical price.

Speaker #4: It's making sure the drive path looks good. And that can be done for a very, very low cost. I'm talking under $20,000. And franchisees tend to have a way of getting things done more cheaply than we do.

Speaker #4: So for them, it's probably under $10,000. So this is the kind of thing that really is intended just to give us a better curb appeal, get us through to the point when we are ready to get the full-scale re-image program going, and do so at a tremendously economical price.

Speaker #8: And just a follow-up. When we get there end of this year, hopefully talking about legging into a broader remodel program, is your expectation that there would be some incentives tied to doing that or any sort of financial support for franchisees?

Jon Tower: Then just a follow-up. When, you know, we get there, you know, end of this year, hopefully talking about looking into a broader remodel program, is your expectation that, you know, there would be some incentives tied to doing that or any sort of financial support, financial support for franchisees?

Karen Holthouse: Then just a follow-up. When, you know, we get there, you know, end of this year, hopefully talking about looking into a broader remodel program, is your expectation that, you know, there would be some incentives tied to doing that or any sort of financial support, financial support for franchisees?

Speaker #4: 100%. Let me rephrase that. 100%, there will be assistance from corporate, corporate will not pay for it 100%, figured out better clean that up.

Lance Tucker: 100%. We-- Let me rephrase that. 100% there will be assistance from corporate. Corporate will not pay for it 100%. Figured I better clean that up. But the... You know how these things can get taken out of context. But anyway, yes, we would expect to make a meaningful contribution to whatever reimage program we would eventually roll out. The most recent one we did was in the 35% neighborhood, if I'm not mistaken, and so I would think a little bit either side of that is what we'd be talking about.

Speaker #4: But, you know how these things can get taken out of context. But anyway, yes, we would expect to make a meaningful contribution to whatever re-image program we would eventually roll out.

Speaker #4: The most recent one we did was in the 35% neighborhood, if I’m not mistaken. And so, I would think a little bit either side of that is what we’d be talking about.

Speaker #8: Okay, great. I'll pass it on.

Jon Tower: Okay, great. I'll pass it on.

Karen Holthouse: Okay, great. I'll pass it on.

Speaker #4: Thank you.

Lance Tucker: Thank you.

Speaker #2: Your next question comes from the line of Jim Sanderson from North Coast Research. Your line is live.

Operator: Your next question comes from the line of Jim Sanderson from North Coast Research. Your line is live.

Speaker #9: Hey, thanks for the question. I wanted to find out a little bit more about Hispanic consumer demand. I think you had called that out in the past as something that was unusually more difficult for JACK in the box.

Jim Sanderson: Hey, thanks for the question. I wanted to find out a little bit more about Hispanic consumer demand. I think you had called that out in the past as something that was unusually more difficult for Jack in the Box. Has that improved over the past year and most recently, and is it improving at a much richer pace?

Speaker #9: Has that improved over the past year and most recently? And is it improving at a much richer pace?

Speaker #4: What we've seen, let's say over the last quarter, is not a whole lot of movement, frankly. We've seen, both in the low-income and the consumer and the Hispanic consumer segments, maybe the slightest amount of change.

Lance Tucker: What we've seen, let's say, over the last quarter, is not a whole lot of movement, frankly. We've seen, you know, both in the low income and the consumer- and the Hispanic consumer segments. We've seen maybe the slightest amount of change, meaning improvement, but not anything significant at this point.

Speaker #4: Meaning improvement, but not anything significant to this point.

Speaker #9: Okay, so that's more or less trending with the sequential improvements you've observed across the board. Is that the right way to look at that?

Jim Sanderson: Okay, so that's more or less trending with the sequential improvements you've observed across the board. Is that the right way to look at that? Nothing then-

Speaker #9: Nothing?

Lance Tucker: It's kinda in that ballpark. Certainly, we're not seeing anything meaningful as far as improvement there yet.

Speaker #4: It's kind of in that ballpark. Certainly, we're not seeing anything meaningful as far as improvement there yet.

Lance Tucker: It's kinda in that ballpark. Certainly, we're not seeing anything meaningful as far as improvement there yet.

Speaker #9: All right. And if I could follow up on a question–you had mentioned some technology or leveraging in-store. And I was wondering, is that related to the new point-of-sale system, to the kiosks?

Jim Sanderson: All right. And, if I could follow up on a question on... You had mentioned some technology you were leveraging in store, and I was wondering, is that related to the new point-of-sale system, to the kiosks? Anything there to call out that might be beneficial, especially in the back half, to drive traffic or transaction?

Speaker #9: Anything there to call out that might be beneficial, especially in the back half to drive traffic or transaction?

Speaker #4: Jim, there's a couple of things we've done, actually. So we completed the rollout of the POS system along I think it was about the end of August.

Lance Tucker: Jim, there's a couple of things-

Jim Sanderson: Yeah.

Lance Tucker: We've done actually. We completed the rollout of the POS system along, I think it was about the end of August. As we continue to make refinements to that system and learn it, I would expect to see some benefit there. The other thing we did, and this is a real tribute to the ops team as well as our IT team, led by Doug Cook, we did deploy new back of house,

Speaker #4: And so as we continue to make refinements to that system and learn it, I would expect to see some benefit there. But the other thing we did, and this is a real tribute to the ops team as well as our IT team led by Doug Cook, we did deploy new back-of-house.

Jim Sanderson: Mm.

Speaker #4: Both on the labor management side and the inventory side. And that was completed in November of '25. And so again, it's kind of very early days.

Lance Tucker: both on the labor management side and the inventory side, and that was completed in November of 2025. And so again, it's kind of very early days. We're getting to know the systems. We're learning how to utilize them, but our focus for the balance of the year is really gonna be: how do we leverage those systems now that we've made those investments to get more efficiencies out of them, both on the top line and the bottom line?

Speaker #4: We're getting to know the systems. We're learning how to utilize them. But our focus for the balance of the year is really going to be how do we leverage those systems now that we've made those investments to get more efficiencies out of them, both on the top line and the bottom line?

Speaker #9: All right. Thank you very much.

Jim Sanderson: All right. Thank you very much.

Speaker #2: Your next question comes from Jake Bartlett from Truist Securities. Your line is live.

Operator: Your next question comes from Jake Bartlett from Truist Securities. Your line is live.

Speaker #10: Great, thanks for taking the question. Mine was about your regional performance. And as we compare Jack in the Box to the larger peers, it might be unfair just given your exposure to certain markets.

Jon Tower: Great. Thanks for taking the question. You know, mine was about your regional performance and, you know, as we compare Jack in the Box to the larger peers, it might be, you know, unfair just giving your exposure to certain markets. So I'm wondering whether, you know, markets like California are particularly weighing the system down, and maybe how you think you might compare to your peers within a big market like California.

Jake Bartlett: Great. Thanks for taking the question. You know, mine was about your regional performance and, you know, as we compare Jack in the Box to the larger peers, it might be, you know, unfair just giving your exposure to certain markets. So I'm wondering whether, you know, markets like California are particularly weighing the system down, and maybe how you think you might compare to your peers within a big market like California.

Speaker #10: So I'm wondering, whether markets like California are particularly weighing the system down. And maybe how do you think you might compare to your peers within a big market like California?

Lance Tucker: Sure. I'll start with that, and then I'll ask Ron to jump in if there's anything he wants to add, or Rachel, for that matter. You know, California has been difficult for, I believe, most brands, at least from the information that we have. So I do believe that is a little more of a headwind, not only on the sales front, but certainly on the profitability front, with some of the labor pressures that you see in California. Now, as we look at Q1 in particular, I think the weather, obviously, the weather impact we've already talked about was more of a Texas and Midwest phenomenon than it was in California.

Speaker #4: Sure. I'll start with that, and then I'll ask Ryan to jump in if there's anything he wants to add, or Rachel, for that matter.

Speaker #4: But California has been difficult for, I believe, most brands, at least from the information that we have. So I do believe that is a little more of a headwind, not only on the sales front, but certainly on the profitability front, with some of the labor pressures that you see in California.

Speaker #4: Now, as we look at first quarter in particular, I think the weather, obviously, the weather impact we've already talked about was more of a Texas and Midwest phenomenon than it was in California.

Speaker #4: But just generally speaking, what we've seen in my time back here is that California has been challenging. And I think when you look at our over 40% of restaurants being based in California, we certainly have a little more of a headwind when you're looking at an overall consolidated number than some of our competitors may.

Lance Tucker: But just generally speaking, what we've seen in my time back here is that California has been challenging, and I think when you look at our over 40% of restaurants being based in California, we certainly have a little more of a headwind, when you're looking at an overall consolidated number than some of our competitors may.

Speaker #2: That concludes the question and answer session. I'd now like to turn the call back over to Lance Tucker, CEO, for closing remarks.

Operator: That concludes the question-and-answer session. I'd now like to turn the call back over to Lance Tucker, CEO, for closing remarks.

Speaker #4: As always, just want to say thanks to everybody for your time, and we'll look forward to seeing you this time next quarter.

Lance Tucker: As always, just wanna say thanks to everybody for your time, and we'll look forward to seeing you this time next quarter.

Operator: That concludes today's meeting. You may now disconnect.

Q1 2026 Jack in the Box Inc Earnings Call

Request a DemoDemo

JACK

Jack in the Box

Earnings