Fast-food chain Jack in the Box (NASDAQ:JACK) missed Wall Street’s revenue expectations in Q4 CY2025, with sales falling 25.5% year on year to $349.5 million. Its GAAP loss of $0.13 per share was significantly below analysts’ consensus estimates.

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Revenue: $349.5 million vs analyst estimates of $367.1 million (25.5% year-on-year decline, 4.8% miss)

EPS (GAAP): -$0.13 vs analyst estimates of $1.06 (significant miss)

Adjusted EBITDA: $68.18 million vs analyst estimates of $69.28 million (19.5% margin, 1.6% miss)

EBITDA guidance for the full year is $232.5 million at the midpoint, in line with analyst expectations

Operating Margin: 13.3%, down from 15.8% in the same quarter last year

Free Cash Flow Margin: 2.1%, down from 15% in the same quarter last year

Locations: 2,128 at quarter end, down from 2,779 in the same quarter last year

Same-Store Sales fell 6.7% year on year (-0.5% in the same quarter last year)

Market Capitalization: $407.7 million

Delighting customers since its inception in 1951, Jack in the Box (NASDAQ:JACK) is a distinctive fast-food chain known for its bold flavors, innovative menu items, and quirky marketing.

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $1.35 billion in revenue over the past 12 months, Jack in the Box is a mid-sized restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.

As you can see below, Jack in the Box’s 5.7% annualized revenue growth over the last six years was tepid as it closed restaurants.

This quarter, Jack in the Box missed Wall Street’s estimates and reported a rather uninspiring 25.5% year-on-year revenue decline, generating $349.5 million of revenue.

Looking ahead, sell-side analysts expect revenue to decline by 16.2% over the next 12 months, a deceleration versus the last six years. This projection doesn't excite us and suggests its menu offerings will see some demand headwinds.

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The number of dining locations a restaurant chain operates is a critical driver of how quickly company-level sales can grow.

Jack in the Box listed 2,128 locations in the latest quarter and has generally closed its restaurants over the last two years, averaging 3.4% annual declines.

When a chain shutters restaurants, it usually means demand for its meals is waning, and it is responding by closing underperforming locations to improve profitability.

A company's restaurant base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at restaurants open for at least a year.

Jack in the Box’s demand has been shrinking over the last two years as its same-store sales have averaged 4% annual declines. This performance isn’t ideal, and Jack in the Box is attempting to boost same-store sales by closing restaurants (fewer locations sometimes lead to higher same-store sales).

In the latest quarter, Jack in the Box’s same-store sales fell by 6.7% year on year. This decrease represents a further deceleration from its historical levels. We hope the business can get back on track.

It was good to see Jack in the Box provide full-year EBITDA guidance that slightly beat analysts’ expectations. On the other hand, its revenue missed and its EPS fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 3.5% to $21.26 immediately after reporting.

Jack in the Box may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.