Jack in the Box, a well-known fast-food chain, plans to close 150 to 200 locations. This decision is part of a larger strategy to restructure the company amid declining sales and financial struggles.
Restaurant Closures Aim to Cut Debt and Improve Cash Flow
The company will close up to 10% of its restaurants, which currently total around 2,200 locations, mostly on the West Coast. CEO Lance Tucker stated that the closures would help the company reduce debt by $300 million over the next two years. The goal is to achieve positive growth for the brand in the long term.
Del Taco Sale Under Consideration Due to Financial Struggles
Jack in the Box is also considering selling its Del Taco brand. The fast-food chain acquired Del Taco three years ago but has faced challenges, including rising inflation and competition from brands like Taco Bell. Sales at Del Taco have dropped 3.6%, prompting Jack in the Box to rethink its ownership.
Stock Price Decline Reflects Company’s Struggles
Shares of Jack in the Box have fallen by 57% in the past year. The company’s stock dropped nearly 7% in premarket trading on Thursday. While competitors like McDonald’s and Chipotle are also facing struggles, Taco Bell is expecting an 8% sales increase due to new menu items.
Jack in the Box Faces Tough Challenges Moving Forward
The closures and potential sale of Del Taco mark a critical point for the company. Jack in the Box aims to cut costs and improve its performance. The focus is now on financial recovery and rebuilding its brand in a highly competitive market.
