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Jack in the Box develops and franchises quick-service restaurants in the United States. The company operates through its hamburger chain (Jack in the Box), and up until recently, a Mexican-American chain under the Del Taco brand.
The restaurant chain closed the sale of its Del Taco brand for $115 million, a massive loss on the more than $575 million the company paid back in 2022. It’s also implementing a block closure program, which is projected to culminate in the closure of approximately 150-200 underperforming restaurants.
Jack in the Box continues to face pressure from weakened consumer demand across income tiers, leading to negative traffic trends. Additionally, higher labor expenses, commodity inflation, along with rising utilities and other operating costs are weighing on profitability.
In the latest quarter, same-store sales for the Jack brand declined 7.4%, with both franchise and company-operated locations posting declines. In addition, a limited international presence might be a big disadvantage for the company and hurt its competitive position. Maintaining liquidity has also become a grueling task amid persistent macroeconomic risks.
The Zacks Rundown
A Zacks Rank #5 (Strong Sell) stock, Jack in the Box (JACK - Free Report) is a component of the Zacks Retail – Restaurants industry group, which currently ranks in the bottom 24% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has throughout the year:
Image Source: Zacks Investment Research
Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
JACK shares have been underperforming the market over the past year. The stock hit a 52-week low last month and represents a compelling short opportunity as we near the end of 2025.
Recent Earnings Misses & Deteriorating Outlook
Jack in the Box has fallen short of earnings estimates in two of the past three quarters. Back in November, the company reported fiscal fourth-quarter earnings of 30 cents per share, missing the Zacks Consensus Estimate by a whopping -34.78%.
The hamburger chain has posted a trailing four-quarter average earnings miss of -7.1%. Consistently falling short of earnings estimates is a recipe for underperformance, and JACK is no exception.
The company has been on the receiving end of negative earnings estimate revisions as of late. Looking at the current quarter, analysts have slashed estimates by -20.98% in the past 60 days. The fiscal Q1 Zacks Consensus EPS Estimate is now $1.13 per share, reflecting negative growth of -41.15% relative to the year-ago period.
Image Source: Zacks Investment Research
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, JACK stock is in a sustained downtrend. Notice how the stock has made a steady series of lower lows this year, widely underperforming the major indices. Also note that shares are trading below downward-sloping 50-day (blue line) and 200-day (red line) moving averages – another good sign for the bears.
Image Source: StockCharts
JACK stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average crosses below its 200-day moving average. Shares would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. The stock has fallen more than 50% this year alone.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that JACK stock is included in one of the worst-performing industry groups adds yet another headwind to a long list of concerns.
A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of JACK until the situation shows major signs of improvement.
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Bear of the Day: Jack in the Box (JACK)
Jack in the Box develops and franchises quick-service restaurants in the United States. The company operates through its hamburger chain (Jack in the Box), and up until recently, a Mexican-American chain under the Del Taco brand.
The restaurant chain closed the sale of its Del Taco brand for $115 million, a massive loss on the more than $575 million the company paid back in 2022. It’s also implementing a block closure program, which is projected to culminate in the closure of approximately 150-200 underperforming restaurants.
Jack in the Box continues to face pressure from weakened consumer demand across income tiers, leading to negative traffic trends. Additionally, higher labor expenses, commodity inflation, along with rising utilities and other operating costs are weighing on profitability.
In the latest quarter, same-store sales for the Jack brand declined 7.4%, with both franchise and company-operated locations posting declines. In addition, a limited international presence might be a big disadvantage for the company and hurt its competitive position. Maintaining liquidity has also become a grueling task amid persistent macroeconomic risks.
The Zacks Rundown
A Zacks Rank #5 (Strong Sell) stock, Jack in the Box (JACK - Free Report) is a component of the Zacks Retail – Restaurants industry group, which currently ranks in the bottom 24% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has throughout the year:
Image Source: Zacks Investment Research
Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
JACK shares have been underperforming the market over the past year. The stock hit a 52-week low last month and represents a compelling short opportunity as we near the end of 2025.
Recent Earnings Misses & Deteriorating Outlook
Jack in the Box has fallen short of earnings estimates in two of the past three quarters. Back in November, the company reported fiscal fourth-quarter earnings of 30 cents per share, missing the Zacks Consensus Estimate by a whopping -34.78%.
The hamburger chain has posted a trailing four-quarter average earnings miss of -7.1%. Consistently falling short of earnings estimates is a recipe for underperformance, and JACK is no exception.
The company has been on the receiving end of negative earnings estimate revisions as of late. Looking at the current quarter, analysts have slashed estimates by -20.98% in the past 60 days. The fiscal Q1 Zacks Consensus EPS Estimate is now $1.13 per share, reflecting negative growth of -41.15% relative to the year-ago period.
Image Source: Zacks Investment Research
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, JACK stock is in a sustained downtrend. Notice how the stock has made a steady series of lower lows this year, widely underperforming the major indices. Also note that shares are trading below downward-sloping 50-day (blue line) and 200-day (red line) moving averages – another good sign for the bears.
Image Source: StockCharts
JACK stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average crosses below its 200-day moving average. Shares would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. The stock has fallen more than 50% this year alone.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that JACK stock is included in one of the worst-performing industry groups adds yet another headwind to a long list of concerns.
A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of JACK until the situation shows major signs of improvement.