Jack in the Box is facing a challenging period as economic pressures reshape consumer fast-food spending habits, particularly among lower-income Americans. As inflation and rising costs squeeze household budgets, more people are limiting discretionary spending, including eating out. Ipsos research found that over 40% of low-income adults are visiting quick-service restaurants less frequently, compared to just 30% of those earning over $100,000, signaling that the downturn in restaurant visits is driven by broader economic uncertainty rather than changing tastes or the popularity of GLP-1 weight-loss drugs.
Chains with devoted customer bases, such as Chick-fil-A, Chipotle, and McDonald’s, have weathered these conditions better. Consumers often view spending at these brands as a justifiable treat. Jack in the Box, however, has struggled to cultivate a similarly loyal following. Its customer base is considered more casual and sporadic, limiting its resilience during economic downturns.
Financially, Jack in the Box has reported significant headwinds:
- Same-store sales fell 7.4% in Q4 2025, with negative traffic and mix, only partially offset by modest price increases.
- Restaurant-level margins dropped by 240 basis points to 16.1% year over year, pressured by sales deleverage, commodity inflation, and rising labor costs.
- The company ended the year with $1.7 billion in debt, with a net debt to adjusted EBITDA ratio of six times, prompting a focus on debt reduction.
In response, Jack in the Box has launched its “Jack on Track” turnaround strategy. Key components include:
- Selling Del Taco, a brand acquired for over $575 million in 2022, for just $115 million in 2025. Proceeds will be used to pay down debt and refocus on the core brand.
- Closing 150–200 underperforming restaurants, many over 30 years old, in a block closure program through 2026.
- Streamlining operations, emphasizing value offerings, retraining staff, and investing in technology and store refreshes.
Despite these moves, analysts remain cautious. TD Cowen recently cut its price target to $16, just above the current share price, reflecting skepticism about the speed and effectiveness of the turnaround. Over the past year, the stock has lost nearly 68% of its value. Consensus analyst targets range widely, from $15 to $73, but recent ratings cluster around $16, implying further downside risk.
Looking ahead, Jack in the Box is betting on operational discipline, cost controls, and a return to simplicity to stabilize the business and eventually achieve positive net unit growth. The company’s ability to pay down debt, improve restaurant economics, and regain customer traffic will determine whether its turnaround efforts succeed in a highly competitive, value-driven fast-food market.