Jack in the Box is about to offload the struggling Del Tacos restaurant business and has suspended dividends as part of a restructuring plan under new CEO Lance Tucker, said Wednesday.
The restaurant operator’s shares fell 6% in expansion trading as the company plans to close around 150-200 unperforming restaurants starting at 80-120 restaurant exits by the end of 2025.
Tucker, who took over the helm on March 31, said the measure would help reduce the company’s debt, improve long-term financial performance across the restaurant system and strengthen its balance sheet.
The San Diego, California-based company works at Bank of America Securities to help the process of exploring strategic alternatives to the Deltacos brand.
The burger chain is looking to take advantage of the Mexican food chain’s drive-through foot foot foot, buying Delta Cos in 2022 for a $575 million deal.
However, a slower demand has created a series of tough quarters for the company as competition for consumer wallets and value wars in the fast food sector. Over the past 12 months, the company’s stock has lost more than half its value.
Jack in the Box saw sales of the same store down 4.4% in the second quarter, which ended April 13th, according to preliminary results released on Wednesday.
For fiscal year 2025, comparable sales are expected to fall from low to medium digits compared to a 1.3% decline in 2024.
