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Jack in the Box Expands Chicago Footprint, Eyes Midwest Growth

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Jack in the Box Inc. (JACK - Free Report) continues to secure development agreements in Chicago with a 12-unit franchising deal. The move builds on the growth momentum following the planned openings of two CloudKitchens in downtown Chicago and eight company-operated locations in the suburbs. The Chicago expansion aligns with JACK’s broader vision for growth in the Midwest.

With approximately 2,200 locations nationwide, JACK’s expansion into Chicago represents a key growth lever for the company. The flexibility in its store prototypes, combined with its proven track record of success in new markets, signals significant potential for franchisees and investors alike.

A core strength of Jack in the Box is its diverse menu, offering customer favorites such as burgers, tacos, chicken sandwiches, milkshakes and its signature late-night snacking options. The new Chicago locations will cater to modern consumer preferences with dine-in, drive-thru and mobile ordering options, creating a seamless experience for a broad range of customers.

JACK's Focus on Franchising Efforts Bodes Well

Jack in the Box continues to focus on franchise agreements to drive growth. During the third quarter of fiscal 2024, the company signed development agreements and secured 18 new franchisees for 156 restaurant commitments. The interest is evident in markets like Florida, with 31 agreements or commitments to build locations. The expansion into Chicago also aligns with the company's confidence in its new market strategy. JACK has demonstrated sustained sales over time in the region.

The company has identified more than 100 additional franchise opportunities in the Chicago Metro Area and is actively seeking experienced multi-unit operators to join its franchise network. This growth initiative follows successful new market openings in Salt Lake City and Louisville, highlighting the brand’s capacity to tap into underserved regions with strong pent-up demand.

Given the substantial progress in terms of the franchise development program, the company anticipates achieving a long-term net unit growth goal of 4% by 2025. Also, it expects to have Jack in the Box restaurants in 40 states by 2030.

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In the past three months, the stock has declined 3.1% against the industry’s growth of 13.6%.

JACK’s Zacks Rank & Key Picks

Jack in the Box currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Retail-Wholesale sector include Texas Roadhouse, Inc. (TXRH - Free Report) , Potbelly Corporation (PBPB - Free Report) and Yum China Holdings, Inc. (YUMC - Free Report) , each carrying a  Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Texas Roadhouse has a trailing four-quarter earnings surprise of 0.4%, on average. TXRH’s shares have risen 83% in the past year. The Zacks Consensus Estimate for TXRH’s 2024 sales and earnings per share (EPS) indicate 15.6% and 39.4% growth, respectively, from the year-earlier actuals.

Potbelly Corporation has a trailing four-quarter earnings surprise of 77.5%, on average. The stock has gained 10.4% in the past year. The Zacks Consensus Estimate for PBPB’s fiscal 2024 EPS implies 33.3% growth on 6.5% lower revenues from the year-ago levels.

Yum China has a trailing four-quarter earnings surprise of 26.6%, on average. YUM’s shares have risen 11.8% in the past year. The Zacks Consensus Estimate for YUM’s 2024 sales and EPS indicate 4.5% and 11% growth, respectively, from the prior-year figures.

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