Jack in the Box probably didn’t envision its 75th anniversary this way.
The San Diego-based fast-food chain was founded in 1951, and it has a lot of plans to celebrate its diamond jubilee. It plans to bring back some classic menu items, starting with the Chicken Supreme, a sandwich not seen since 2004. Customers who order it as a meal will also get a “Jibbi,” or collectible bag charms.
On Tuesday, members of the chain’s loyalty program will be able to get two of Jack in the Box’s famous tacos for 75 cents. It is planning trivia and other games.
“We have a number of pretty exciting things going on,” Lance Tucker, Jack in the Box’s CEO, told analysts in November.
The jubilee comes at an otherwise difficult time for Jack in the Box, which is facing a few challenges.
Its same-store sales have fallen more than 7% in each of the past two quarters, the chain’s worst performance in 15 years. There’s not even an exception for the pandemic. The company is closing underperforming restaurants for the second time in four years. It just completed the sale of Del Taco, which it only bought four years ago, at an 80% decline in value.
Its stock, meanwhile, lost more than half its value last year, among the worst in a restaurant industry in which steep valuation declines were commonplace. Its market cap is now less than the price Jack in the Box paid for Del Taco in 2021.
At the same time, the company faces an activist investor in Sardar Biglari, who has been buoyed by strong recent performance at Steak n Shake and just spearheaded a partially successful proxy fight at longtime nemesis Cracker Barrel.
At least some of Jack in the Box’s problems of late are not of its own doing. Many of the brand’s locations are in California, which now requires fast-food chains to pay workers at least $20 an hour.
Most of its stores are also in Texas and California, each of which has high populations of immigrant residents and where markets have been depressed over the past year amid an immigration crackdown by the Trump Administration.
To be sure, El Pollo Loco operates in many of the same markets and hasn’t seen sales fall nearly as much—though it does, somewhat coincidentally, face a challenge in the form of Biglari, who is trying to buy the chicken chain.
Jack in the Box does operate in a burger category that has been particularly difficult of late, at least for more traditional players. Even then, the company has underperformed every other burger chain. At least those that are publicly traded.
Same-store sales in the third calendar quarter averaged -0.1% for publicly traded limited-service burger chains, including fast-casuals Habit and Shake Shack.
In some respects, Jack in the Box may be paying the price of decades of changes and shifts and uncertainty.
The company for years focused primarily on refranchising, which stunted unit growth. Franchisees got so angry at the way the brand was operated they called for the ouster of the CEO in 2018. When that CEO left, his replacement closed locations, vowed expansion and better franchisee relationships and bought Del Taco.
That CEO left early last year, thrusting Tucker into the top spot. The company has refocused again, offloading Del Taco, closing stores and focusing on profitability. He’ll have some work to do: That profitability fell 74% last quarter.
Amid all of this, the chain hasn’t gotten the unit growth it has long coveted. Jack in the Box finished its last quarter with 2,136 restaurants after closing a net of 32 locations. That is 100 fewer than it had five years ago. And 10 years ago. And 15 years ago.