Jack in the Box is seeking to offload its struggling Del Taco restaurant business and suspended its dividend as part of a restructuring plan under new CEO Lance Tucker, it said Wednesday.
Shares of the restaurant operator were down 6% in extended trading, as the company also plans to close about 150 to 200 underperforming restaurants, starting with 80 to 120 restaurant exits by the end of 2025.
Tucker, who took over the helm on March 31, said the measures would help reduce the company’s debt, improve long-term financial performance across its restaurant system and strengthen the balance sheet.
The San Diego, California-based firm has engaged Bank of America Securities to assist in the process of exploring strategic alternatives for the Del Taco brand, including a possible divestiture.
The hamburger chain bought Del Taco in 2022 in a $575 million deal, looking to capitalize on the Mexican food chain’s drive-thru foothold.
However, a demand slowdown has led to a series of tough quarters for the company amid increasing competition for consumer wallet and value wars in the fast food space. Over the last 12 months, the company’s stock has lost more than half its value.
Jack in the Box logged a 4.4% decline in same-store sales in the second quarter ended April 13, according to preliminary results released by the company on Wednesday.
For the fiscal year 2025, comparable sales are forecast to be down low-to-mid-single digits compared to a 1.3% decline in 2024.
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