The government shutdown apparently came at a bad time for Jack in the Box.
The fast-food chain on Wednesday reported a 7.4% decline in same-store sales in its fiscal fourth quarter, its second straight decline exceeding 7%. The company said that it lost sales because customers came in less often and spent less when they did. The company hadn’t had declines of this level since the Great Recession.
Executives said on Wednesday that sales improved 300 basis points at the end of the quarter, after the chain focused more on discounts such as a $5 Smashed Jack and a $4.99 Bonus Jack combo.
But the government shutdown and continued economic uncertainty sent them back down again in the current quarter.
“Like many brands, we’ve recently seen a few weeks of downward pressure tied to the effects of the government shutdown, as well as lapping several weeks of our stronger results from last year,” CEO Lance Tucker told analysts, according to a transcript on the financial services site AlphaSense.
“We are taking necessary steps to enhance how we improve our value perception and we will continue refining our menu strategy,” he added.
The tough sales this year have hit profit margins. Restaurant-level margins as a percent of sales declined 240 basis points, to 16.5%. Some of that was due to the chain’s entry into the Chicago market, where Jack in the Box opened eight restaurants in the quarter, the fastest new-market entry in company history.
That drove up labor costs. But commodity costs increased, too, thanks in part to beef inflation. At company locations Jack in the Box paid higher costs for rent, third-party delivery fees and security.
“When you have a difficult year like we had in 2025,” Tucker said, “that does in fact put pressure on franchise” profit-and-loss statements.
Executives remained confident in the coming fiscal year, which will mark the San Diego-based chain’s 75th anniversary. Tucker said he expects same-store sales to return to positive territory for the full year, though Jack in the Box told analysts that results for the upcoming fiscal year will be roughly flat, from down 1% to up 1%. Executives did say that sales stabilized among lower-income and Hispanic consumers that had been shying away from their restaurants this year.
Still, Jack in the Box’s 2025 will not go down as one of its better years. The company opened the year with the departure of CEO Darin Harris. He was replaced by the recently appointed CFO Lance Tucker. The company unloaded Del Taco, at a substantial decline in value. The activist investor Sardar Biglari is currently gunning for two seats on its board. The company is dealing with higher costs from California labor rates. And then sales fell off a cliff.
The company’s stock price has lost two-thirds of its value so far this year as a result.
Jack in the Box does have plans to fix all of it. The company is in the process of closing underperforming locations. It closed a net of 32 locations in the quarter, which executives believe will lead to improved sales at the remaining locations—while shedding unprofitable locations.
The company is retraining staff to improve service. It expects to kick off a reimage program and is testing what Tucker described as a “mini-reimage” that can be done quicker and have a modest sales uplift. Jack in the Box is also planning more new products this year to celebrate its anniversary, including the return of old favorite menu items.
“We expect to exit 2026 as a stronger, more disciplined and more valuable Jack in the Box, positioned to drive sustained profitability and create long-term shareholder value,” Tucker said.
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