SAN DIEGO - Jack in the Box Inc. (NASDAQ: NASDAQ:JACK), the well-known fast-food chain, has unveiled plans to make a significant return to the Chicago area. The company intends to open eight new company-operated restaurants in 2025, marking its first presence in the region in over 40 years.
The expansion strategy includes identifying over 125 potential locations for future development, both corporate and franchise-owned, throughout the Chicagoland area. The move aims to reintroduce the brand's round-the-clock menu to Chicago residents, capitalizing on the area's robust dining scene.
Darin Harris, CEO of Jack in the Box, expressed enthusiasm for the brand's comeback, emphasizing the unique offering of their menu items available at any hour. This initiative is part of a broader push by the company into new markets, following recent growth in states such as Utah, Kentucky, Arkansas, Montana, Wyoming, Michigan, Florida, Georgia, and overseas in Mexico.
The upcoming locations will feature various venue types, including traditional standalone restaurants, drive-thrus, conversions of existing structures, and dark kitchens, catering to different customer preferences. These establishments will offer dine-in, drive-thru, and mobile ordering services, operating 24/7 to serve customers at all times.
Jack in the Box, known for its diverse menu that includes burgers, tacos, chicken sandwiches, milkshakes, breakfast, and late-night snacks, is also looking to attract entrepreneurs by offering franchise opportunities in the Chicago market and nationwide.
The company, headquartered in San Diego, California, currently operates and franchises approximately 2,200 Jack in the Box restaurants across 22 states and owns Del Taco, the second-largest Mexican-American QSR chain in the U.S., with about 600 outlets across 16 states.
This expansion reflects Jack in the Box's strategic focus on market penetration and franchise growth, as stated in the press release.
In other recent news, Jack in the Box has been making strategic moves in its business operations. The company has announced plans to open 15 new locations in both Georgia and Florida, marking its first venture into the Southeastern United States. Loop Capital has adjusted its outlook on Jack in the Box, reducing the stock's price target to $87 from the previous $118, due to a decline in same-store sales. Despite the adjustment, Loop Capital maintains a positive outlook on the company.
RBC Capital Markets and Wedbush Securities have both upgraded the company's stock to "Outperform", citing promising performance in new markets and the ability to meet growth and EBITDA targets. However, Barclays assigned an "Equal Weight" rating due to concerns over lower-than-expected comparable sales and a reduction in guidance for comparable sales and earnings.
These are recent developments and it is crucial for investors to keep an eye on these changes. The company's financial outlook suggests a positive trajectory in earnings per share over the next few years, which is a key piece of information for potential investors. Furthermore, Jack in the Box is projected to drive same-store sales growth into 2025 through its expansion plans and menu innovations.
InvestingPro Insights
As Jack in the Box Inc. (NASDAQ: JACK) sets its sights on the Chicago market, the company's financial health and investment potential come into focus. With a market capitalization of $928.59 million and an appealing price-to-earnings (P/E) ratio of 8.38, the fast-food chain appears to be trading at a valuation that may catch the eye of value investors. These figures are particularly noteworthy as the company prepares for a significant expansion into a new urban market.
InvestingPro Tips highlight the company's commitment to shareholder value, as evidenced by its aggressive share buyback strategy. Moreover, the consistent dividend payments over 11 consecutive years, boasting a current yield of 3.6%, could be a testament to Jack in the Box's dedication to returning value to its investors, even as it explores growth opportunities in Chicago and beyond.
On the performance front, the company has been navigating through challenging times, with its stock price trading near a 52-week low and experiencing a substantial 40.65% decline over the last six months. Nevertheless, analysts remain optimistic, predicting profitability for the year. The company's profitability over the last twelve months, coupled with the planned expansion, may signal a potential turnaround and an opportunity for investors looking at long-term prospects.
For those interested in a deeper dive into Jack in the Box's financial metrics and future outlook, InvestingPro offers a suite of additional tips. With the use of the exclusive coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking valuable insights to inform their investment decisions. Find out more about these insights and tips by visiting https://www.investing.com/pro/JACK, where nine additional InvestingPro Tips are available to further enrich your understanding of the company's financial landscape.
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