American restaurant company Jack in the Box is conducting a strategic review to potentially sell its Del Taco business and has suspended its dividend as part of a restructuring initiative led by new CEO Lance Tucker.
The company said it will also close 150 to 200 underperforming restaurants under a block closure programme.
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BofA Securities has been appointed to assist Jack in the Box in the process of exploring strategic alternatives for the Del Taco brand.
Tucker, who became CEO as of this month, said: “In my time thus far as CEO, I have worked quickly with our teams to conclude that Jack in the Box operates at its best, and maximises shareholder return potential, within a simplified and asset-light business model.”
Based in San Diego, Jack in the Box acquired Del Taco for $575m in 2022, aiming to leverage the Mexican food chain’s strong drive-thru presence.
However, a slowdown in demand has resulted in challenging quarters for Jack in the Box, with stiff competition and value wars in the fast-food industry affecting its performance. Over the past year, the company’s stock value has halved.
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By GlobalDataJack in the Box reported a 4.4% drop in same-store sales in its select preliminary financial results for the fiscal year’s second quarter, ending 13 April 2025.
The company anticipates comparable sales to decrease by a low-to-mid-single-digit percentage for the fiscal year 2025, following a 1.3% decline in 2024.
As part of its capital allocation plans, Jack in the Box will significantly reduce its investment in company-owned new unit restaurant development starting in 2026.
However, the company said it will continue with planned enhancements of its existing restaurant base through restaurant reimages.
Plans also include continuous investment in evolving technologies and digital capabilities to see better growth via the company’s digital sales channels.
