Mike's Red Tacos Plans Nationwide Franchising Expansion
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy JACK?
Source: CNBC
- Franchising Initiative: Mike's Red Tacos is set to launch a franchising initiative aimed at establishing hundreds of restaurants across the U.S., with backing from investors Bill Phelps and Andrew Feghali, which is expected to significantly enhance brand visibility and market share.
- Market Growth Potential: According to Datassential, traditional Mexican dish birria has reached a 3.7% penetration on U.S. menus, quadrupling in four years, indicating rapid growth potential that Mike's Red Tacos is poised to capitalize on.
- Rapid Expansion Strategy: The taco chain has secured franchising development deals with multi-unit operators for over 200 locations nationwide, with some restaurants expected to open by the end of the year, which will contribute to substantial revenue growth for the company.
- Clear Competitive Advantage: Despite facing stiff competition from national chains and local taco restaurants, Phelps believes that the chain's simple menu, delicious food, and aggressive marketing strategy will help Mike's Red Tacos stand out and become a market winner.
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Analyst Views on JACK
Wall Street analysts forecast JACK stock price to fall
15 Analyst Rating
3 Buy
11 Hold
1 Sell
Hold
Current: 21.340
Low
15.00
Averages
19.35
High
25.00
Current: 21.340
Low
15.00
Averages
19.35
High
25.00
About JACK
Jack in the Box Inc. is a restaurant company. The Company operates and franchises Jack in the Box, a hamburger chain with approximately 2,135 restaurants across 21 states. Jack in the Box restaurants offer products, including classic burgers like its Jumbo Jack and product lines, such as the Buttery Jack and Smash Jack burgers. Jack offers products, such as breakfast sandwiches with cracked eggs, as well as tacos, curly fries, egg rolls, specialty sandwiches and real ice cream shakes, among many other items. Its menu offers breakfast, lunch, dinner, snacks, and late-night. Jack in the Box allows its guests to customize meals to their tastes and order any product on the menu when they want it, including breakfast at night, or burgers and chicken in the morning.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Jack in the Box Q1 2026 Earnings Call Insights
- Sales Decline: Jack in the Box reported a 6.7% decrease in same-store sales for Q1, with franchise locations down 7% and company-owned stores down 4.7%, indicating persistent market pressures and weak consumer demand that adversely affected overall revenue performance.
- Margin Compression: The restaurant-level margin fell to 16.1%, down from 23.2% a year ago, while food and packaging costs as a percentage of sales rose to 29.7%, increasing by 380 basis points, which exacerbates the company's challenges in cost control.
- Debt Management Progress: The company made a partial prepayment of $105 million on its August 2026 debt tranche, although total debt remains at $1.6 billion, with a net debt to adjusted EBITDA leverage ratio of 6.5x, reflecting management's ongoing commitment to reducing debt levels.
- Marketing Strategy: The CEO emphasized the launch of a 75th-anniversary marketing calendar to drive Munchie Meals sales, and despite the challenges of declining same-store sales, management maintains a cautiously optimistic outlook for future sales growth, aiming to improve performance through business simplification and enhanced field support.
See More
Jack in the Box Reports Q1 Earnings with Declining Sales and Margins
- Same-Store Sales Decline: Jack in the Box reported a 6.7% decline in same-store sales for Q1, with franchise same-store sales down 7.0% and company-owned stores down 4.7%, indicating a drop in transaction volume and sales mix, which, despite price increases, will exert pressure on future revenue growth.
- Profitability Erosion: The company posted net earnings of $14.4 million for the first quarter, a significant drop from $31.0 million in the prior year, with diluted EPS at $0.75 compared to $1.61 last year, highlighting the severe impact of cost pressures and declining sales on profitability.
- Restaurant Count Changes: The net restaurant count decreased in Q1, with six openings and 14 closures, reflecting structural adjustments under the 'JACK on Track' plan; while this may temporarily affect market coverage, it is expected to optimize resource allocation in the long run.
- Capital Allocation Strategy: The company did not repurchase any shares in Q1, with $175 million remaining under the buyback authorization, and prepaid $105 million of debt, indicating a conservative financial management approach to navigate an uncertain market environment.
See More
Jack In The Box Q1 Earnings Announcement Scheduled
- Earnings Release Date: Jack In The Box is set to announce its Q1 earnings on February 18th after market close, with a consensus EPS estimate of $1.11, reflecting a significant year-over-year decline of 42.2%, indicating mounting pressure on profitability.
- Revenue Decline Forecast: The expected revenue for Q1 is $353.51 million, down 24.7% year-over-year, highlighting challenges in sales and market demand that could impact future growth strategies.
- Historical Performance Review: Over the past two years, Jack In The Box has beaten EPS estimates 63% of the time and revenue estimates 38% of the time, suggesting some level of profitability, yet recent trends raise concerns about sustainability.
- Estimate Revision Trends: In the last three months, EPS estimates have seen one upward revision and 14 downward revisions, while revenue estimates have experienced one upward and nine downward revisions, indicating a weakening confidence among analysts regarding the company's future performance.
See More
Shareholders Urged to Vote Against Goebel's Re-Election as Chairman
- Governance Crisis: Both Glass Lewis and Egan-Jones recommend shareholders vote against David Goebel's re-election as chairman, citing a staggering -68.6% total shareholder return during his tenure, which highlights governance failures and ineffective strategic execution, necessitating urgent board changes to restore investor confidence.
- Value Destruction: Over the past five years, Jack in the Box has lost approximately $1.8 billion, or 80% of its market value, reflecting the company's persistent underperformance under Goebel's leadership and indicating a troubling lack of accountability from the board, which must take decisive action to reverse this trend.
- Failed Acquisition Case: The acquisition of Del Taco, led by Goebel for $575 million, resulted in a sale just four years later for only $115 million, incurring a loss of over $400 million, further exacerbating the company's financial crisis and showcasing severe decision-making errors.
- Leadership Instability: Jack in the Box has seen three CEOs and eight CFOs in the last five years, indicating a critical lack of leadership stability, and there is an urgent need to introduce new talent to enhance strategic oversight and execution capabilities.
See More
Jack in the Box Secures ISS Support in Board Battle
- Proxy Vote Support: Jack in the Box (JACK) secured backing from proxy firm ISS in its board battle against Biglari Capital, with ISS noting that Biglari's push to remove David Goebel fails to consider adverse macroeconomic conditions, indicating that a board change is unwarranted at this time.
- Shareholder Engagement: ISS emphasized that constructive shareholder engagement and appropriate board refreshment, combined with the timeline surrounding the planned departure of the board chair, suggest that the dissident's call for change is not justified, reflecting stability in corporate governance.
- Equity Limitation Plan: Biglari Capital owns approximately 9.9% of Jack in the Box, previously advocating for board seats, which prompted Jack in the Box to adopt a short-duration rights plan to cap ownership stakes, demonstrating the company's focus on shareholder structure.
- Stock Price Fluctuation: Although Jack in the Box's shares have declined over 40% year-to-date, they have shown signs of recovery in 2026, indicating a mix of market expectations and uncertainties regarding the company's future performance.
See More
Mike's Red Tacos Plans Nationwide Franchising Expansion
- Franchising Initiative: Mike's Red Tacos is set to launch a franchising initiative aimed at establishing hundreds of restaurants across the U.S., with backing from investors Bill Phelps and Andrew Feghali, which is expected to significantly enhance brand visibility and market share.
- Market Growth Potential: According to Datassential, traditional Mexican dish birria has reached a 3.7% penetration on U.S. menus, quadrupling in four years, indicating rapid growth potential that Mike's Red Tacos is poised to capitalize on.
- Rapid Expansion Strategy: The taco chain has secured franchising development deals with multi-unit operators for over 200 locations nationwide, with some restaurants expected to open by the end of the year, which will contribute to substantial revenue growth for the company.
- Clear Competitive Advantage: Despite facing stiff competition from national chains and local taco restaurants, Phelps believes that the chain's simple menu, delicious food, and aggressive marketing strategy will help Mike's Red Tacos stand out and become a market winner.
See More
Jack in the Box Q1 2026 Earnings Call Insights
- Sales Decline: Jack in the Box reported a 6.7% decrease in same-store sales for Q1, with franchise locations down 7% and company-owned stores down 4.7%, indicating persistent market pressures and weak consumer demand that adversely affected overall revenue performance.
- Margin Compression: The restaurant-level margin fell to 16.1%, down from 23.2% a year ago, while food and packaging costs as a percentage of sales rose to 29.7%, increasing by 380 basis points, which exacerbates the company's challenges in cost control.
- Debt Management Progress: The company made a partial prepayment of $105 million on its August 2026 debt tranche, although total debt remains at $1.6 billion, with a net debt to adjusted EBITDA leverage ratio of 6.5x, reflecting management's ongoing commitment to reducing debt levels.
- Marketing Strategy: The CEO emphasized the launch of a 75th-anniversary marketing calendar to drive Munchie Meals sales, and despite the challenges of declining same-store sales, management maintains a cautiously optimistic outlook for future sales growth, aiming to improve performance through business simplification and enhanced field support.
See More
Jack in the Box Reports Q1 Earnings with Declining Sales and Margins
- Same-Store Sales Decline: Jack in the Box reported a 6.7% decline in same-store sales for Q1, with franchise same-store sales down 7.0% and company-owned stores down 4.7%, indicating a drop in transaction volume and sales mix, which, despite price increases, will exert pressure on future revenue growth.
- Profitability Erosion: The company posted net earnings of $14.4 million for the first quarter, a significant drop from $31.0 million in the prior year, with diluted EPS at $0.75 compared to $1.61 last year, highlighting the severe impact of cost pressures and declining sales on profitability.
- Restaurant Count Changes: The net restaurant count decreased in Q1, with six openings and 14 closures, reflecting structural adjustments under the 'JACK on Track' plan; while this may temporarily affect market coverage, it is expected to optimize resource allocation in the long run.
- Capital Allocation Strategy: The company did not repurchase any shares in Q1, with $175 million remaining under the buyback authorization, and prepaid $105 million of debt, indicating a conservative financial management approach to navigate an uncertain market environment.
See More
Jack In The Box Q1 Earnings Announcement Scheduled
- Earnings Release Date: Jack In The Box is set to announce its Q1 earnings on February 18th after market close, with a consensus EPS estimate of $1.11, reflecting a significant year-over-year decline of 42.2%, indicating mounting pressure on profitability.
- Revenue Decline Forecast: The expected revenue for Q1 is $353.51 million, down 24.7% year-over-year, highlighting challenges in sales and market demand that could impact future growth strategies.
- Historical Performance Review: Over the past two years, Jack In The Box has beaten EPS estimates 63% of the time and revenue estimates 38% of the time, suggesting some level of profitability, yet recent trends raise concerns about sustainability.
- Estimate Revision Trends: In the last three months, EPS estimates have seen one upward revision and 14 downward revisions, while revenue estimates have experienced one upward and nine downward revisions, indicating a weakening confidence among analysts regarding the company's future performance.
See More
Shareholders Urged to Vote Against Goebel's Re-Election as Chairman
- Governance Crisis: Both Glass Lewis and Egan-Jones recommend shareholders vote against David Goebel's re-election as chairman, citing a staggering -68.6% total shareholder return during his tenure, which highlights governance failures and ineffective strategic execution, necessitating urgent board changes to restore investor confidence.
- Value Destruction: Over the past five years, Jack in the Box has lost approximately $1.8 billion, or 80% of its market value, reflecting the company's persistent underperformance under Goebel's leadership and indicating a troubling lack of accountability from the board, which must take decisive action to reverse this trend.
- Failed Acquisition Case: The acquisition of Del Taco, led by Goebel for $575 million, resulted in a sale just four years later for only $115 million, incurring a loss of over $400 million, further exacerbating the company's financial crisis and showcasing severe decision-making errors.
- Leadership Instability: Jack in the Box has seen three CEOs and eight CFOs in the last five years, indicating a critical lack of leadership stability, and there is an urgent need to introduce new talent to enhance strategic oversight and execution capabilities.
See More
Jack in the Box Secures ISS Support in Board Battle
- Proxy Vote Support: Jack in the Box (JACK) secured backing from proxy firm ISS in its board battle against Biglari Capital, with ISS noting that Biglari's push to remove David Goebel fails to consider adverse macroeconomic conditions, indicating that a board change is unwarranted at this time.
- Shareholder Engagement: ISS emphasized that constructive shareholder engagement and appropriate board refreshment, combined with the timeline surrounding the planned departure of the board chair, suggest that the dissident's call for change is not justified, reflecting stability in corporate governance.
- Equity Limitation Plan: Biglari Capital owns approximately 9.9% of Jack in the Box, previously advocating for board seats, which prompted Jack in the Box to adopt a short-duration rights plan to cap ownership stakes, demonstrating the company's focus on shareholder structure.
- Stock Price Fluctuation: Although Jack in the Box's shares have declined over 40% year-to-date, they have shown signs of recovery in 2026, indicating a mix of market expectations and uncertainties regarding the company's future performance.
See More
Mike's Red Tacos Plans Nationwide Franchising Expansion
- Franchising Initiative: Mike's Red Tacos is set to launch a franchising initiative aimed at establishing hundreds of restaurants across the U.S., with backing from investors Bill Phelps and Andrew Feghali, which is expected to significantly enhance brand visibility and market share.
- Market Growth Potential: According to Datassential, traditional Mexican dish birria has reached a 3.7% penetration on U.S. menus, quadrupling in four years, indicating rapid growth potential that Mike's Red Tacos is poised to capitalize on.
- Rapid Expansion Strategy: The taco chain has secured franchising development deals with multi-unit operators for over 200 locations nationwide, with some restaurants expected to open by the end of the year, which will contribute to substantial revenue growth for the company.
- Clear Competitive Advantage: Despite facing stiff competition from national chains and local taco restaurants, Phelps believes that the chain's simple menu, delicious food, and aggressive marketing strategy will help Mike's Red Tacos stand out and become a market winner.
See More
