JACK IN THE BOX INC Q1 FY2025 earnings call

• Thanked Darin Harris for his tenure, noting accomplishments like navigating COVID - 19, investing in tech stack, growing unit pipeline, strengthening franchisee relationships, and building a talented leadership team.
• Recapped first quarter results for Jack in the Box, including same-store sales, restaurant level margin, and restaurant openings/closings. Also gave an early look at Q2 with expected negative same-store sales but a strong marketing calendar and barbell strategy in place.
• Provided an update on 2025 guidance, including changes to share repurchase allocation and capital expenditure range.
• Expressed belief in the right leadership team, being well-positioned to drive sales and expand brands while allocating capital to drive shareholder value, and that foundational investments were the right steps for future success.

For Jack in the Box: In the first quarter, same-store sales were up 40 basis points, but the California wildfires and unusual weather in Texas and Midwest regions in the final two weeks had an approximate 20 basis point negative impact on Q1 same-store sales. Restaurant level margin percentage was essentially flat year-over-year at 23.2%, helped by the completion of the new beverage partner contract. Jack is expecting to open between 35 and 45 restaurants for fiscal year 2025, including openings in Chicago this summer and Florida later in the year. In the first quarter, 124,000 shares of common stock were repurchased for $5 million. For Del Taco: It was a challenging quarter with pressured same-store sales results, and is expected to post negative same-store sales in the second quarter. The menu optimization initiative rolled out system wide in the middle of the first quarter has driven higher attach rates and better average check. Del Taco restaurant count at quarter end was 589 with one opening and six closures during the quarter. Del Taco expects to be within the original guidance of opening 15 to 20 restaurants this fiscal year. 13 restaurants were refranchised in the first quarter, bringing Del Taco to approximately 80% franchise owned.

• Maintaining annual same-store sales, operating EPS, and adjusted EBITDA guidance based on solid Q1 results.
• Updated share repurchase allocation: previously $20 million, now $5 million total for the fiscal year, all executed in the first quarter.
• Updated capital expenditure range to $100 million to $105 million for the year, a slight reduction as part of ongoing assessment of capital investment.
• Anticipating announcing further free cash flow acceleration opportunities likely on the next earnings call in May.

Q: Brian Bittner asked about capital allocation, including CapEx guidance reduction and debt reduction priorities.

A: Lance Tucker said job one was looking at capital allocation, made quick decisions to slow CapEx, move away from share repurchases for now, and that there will be more to come in May regarding unlocking free cash flow and that bringing debt down is an unlock they'll look at hard.

Q: Lauren Silberman asked about assessing company store opening strategy and sales strategy for the rest of the year.

A: Lance Tucker said there is a place for company store builds, but they are an asset light company and company builds will be more of a complement to franchisees. Regarding sales strategy, they have a good calendar, innovation, value leadership, and growing digital capabilities and aim to reestablish positive momentum in the back half of the year.

Q: Gregory Francfort asked about the environment in 2025 and if Jack is outperforming the industry.

A: Lance Tucker said it's hard to say if outperforming, but the consumer is cautious, and Jack's fundamentals are good with the right menu and levers to pull, so they are competing about as well as others.