Jack in the Box Expands to Chicago Ahead of Q3 Earnings Call. Here’s What To Expect

Jack in the Box is set to announce its Q3 earnings by market close on Tuesday, Aug. 6. Ahead of this earnings report, though, the fast-food chain announced that it will be expanding into Chicago. Let’s take a look at what can be expected ahead of this call.

Jack in the Box Expansion, Earnings Expectations

According to Investing.com, Jack in the Box reported $365.3 million in revenue for the most recent quarter, 1.2% less than experts’ projected revenue. The company’s second quarter was mediocre; analysts’ predictions for gross margin were impressively surpassed, while estimates for profitability were missed. Analysts predict that Jack in the Box’s Q3 revenue will be down 6.3% year-over-year to $371.8 million. It is anticipated that adjusted earnings will total $1.51 per share.

Over the past 30 days, the majority of analysts who follow the company have “reconfirmed their estimates,” indicating that they still believe the business will “stay the course” as it moves into results. Over the past two years, Jack in the Box has just once fallen short of Wall Street’s sales projections, averaging a 1.3% increase in revenue over expectations.

Some of Jack in the Box’s competitors in the traditional fast-food market have already released their quarterly results, so we can get an idea of what to anticipate from them. Wendy’s reported sales growth of 1.6%, below analysts’ predictions by 1%, while El Pollo Loco reported flat year-over-year revenue, exceeding their estimates by 1.5%. The results had no effect on the price of El Pollo Loco’s stock, and Wendy’s price had a similar outcome.

News of this expected earnings call comes amidst reports that Jack in the Box will begin breaking ground on its proposed Chicago expansion. According to NBC 5, the eight company-owned locations will be open by 2025. The company also said that there is a potential for 125 more franchised locations in the region.

Is the Chain a Contender?

Last month, Jack in the Box announced its plans to open eight new locations in Chicago by 2025 after being absent in the city for four decades. This news suggests that the fast-food chain is beginning to expand again following a contraction period.

CMO Ryan Ostrom credits this success to increased brand awareness brought about by social media and marketing initiatives, which are assisting the fast-food chain in entering new regions. When the company made its “Investor Day” presentation in January, Ostrom informed analysts, “We have 80% brand awareness. The excitement we’re seeing across the United States about our brand, the demand in the U.S., and now socially, is something I’ve never seen.”

“I’m not sure I’m knowledgeable of any other restaurant chains that have such scale and proof of concept that still has such tremendous white space across the United States for growth,” said Darin Harris, the CEO of Jack in the Box, who took over in 2020 following dissatisfaction among franchisees.

By 2027, Jack in the Box and its sibling chain Del Taco hope to have opened 90 to 120 new sites yearly, with a 2.5% annual growth in unit count. According to executives, the business might open more than twice as many sites as it has now — with Del Taco possibly reaching 2,600.

Sales have been steadily increasing and reached a total of $846.2 million in 2023, according to Statista. Following a $1.18 billion sales peak in 2011, the brand’s revenues fell into a plateau ranging from $700 million to $900 million for the following six years. After falling even more during the pandemic and hitting all-time lows in the $300 million area, sales doubled in 2022 and have increased consistently ever since.