10-Q · May 13, 2026
Jack in the Box Inc. reported Q2 2026 diluted EPS of $0.76, exceeding estimates of $0.74, while revenue was $254.3 million, slightly below expectations. Same-store sales decreased by 2.8% for the quarter. The company…
Earnings analysis · 10-Q
JACK earnings analysis
Filed August 12, 2026 · Our reading of the company's report
The latest report
Jack in the Box delivered $257.7 million of revenue, down 1.8% year over year, while operating income increased 9.2% to $52.8 million and operating margin expanded to 20.5% from 18.4%. Diluted EPS declined to $1.03 from…
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Jack in the Box delivered $257.7 million of revenue, down 1.8% year over year, while operating income increased 9.2% to $52.8 million and operating margin expanded to 20.5% from 18.4%. Diluted EPS declined to $1.03 from $1.15 as the effective tax rate rose to 36.9% from 20.9%, and same-store sales fell 1.1%. Liquidity was supported by $71.8 million of cash and restricted cash plus $54.6 million of unused revolver capacity, but lower operating cash flow, franchisee payment delays and leverage above the 5.25x debt-sweep threshold remain significant concerns.
Reported figures
- Earnings per share
- $1.03
- Operating margin
- 20.5%
- Segment
- Jack in the Box: revenue $257.7 million, up 2.0% versus $252? no prior-period filing comparison disclosed; down 1.8% versus $262.4 million prior year. Segment profit was $76.3 million, up 4.8% from $72.8 million.
What stood out
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Operating Margin Expanded
Operating income increased to $52.8 million from $48.4 million, lifting operating margin to approximately 20.5% from 18.4% year over year. The improvement was supported by a $9.6 million increase in real-estate disposal gains and lower SG&A.
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Lower SG&A and Real-Estate Gains
SG&A declined to $17.0 million from $20.6 million, while net gains on property and equipment dispositions were $9.2 million in the quarter versus a $0.3 million loss in the prior-year quarter.
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Segment Profit Improved
Segment profit rose to $76.3 million from $72.8 million despite revenue declining to $257.7 million from $262.4 million. Segment profit margin increased to approximately 29.6% from 27.7%.
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Capex Declined, Cash Flow Positive
Operating cash flow was $56.6 million year to date, compared with $118.1 million in the prior-year period, while capital expenditures declined to $44.1 million from $60.3 million. The resulting implied cash generation before other investing and financing flows was approximately $12.5 million.
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Debt Balance Reduced
Total debt declined to $1.492 billion from $1.716 billion at fiscal year-end after $762.6 million of principal repayments, including $479.9 million of 2022 notes repaid through the $500.0 million refinancing issuance.
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Liquidity Remains Available
The company ended the quarter with $71.8 million of cash and restricted cash and $54.6 million of unused borrowing capacity under its $150.0 million Variable Funding Notes.
What to watch
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Sales and Restaurant Base Declines
Total revenue fell to $257.7 million from $262.4 million, while system same-store sales declined 1.1% in the quarter. Franchised restaurant sales fell to $847.8 million from $863.7 million, and the average franchise restaurant count decreased to 1,968 from 2,026.
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Franchise Margin Pressure
Franchise revenue declined to $161.4 million from $168.3 million, while franchise costs decreased less, to $101.0 million from $102.1 million. Franchise costs therefore rose to 62.6% of franchise revenue from 60.7%.
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Commodity Inflation
Management reported commodity inflation of 5.4% in the quarter and 6.0% year to date, with the greatest impacts in beef, tacos, produce and beverages. Food and packaging costs increased to 29.3% of company restaurant sales from 28.6%.
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Franchisee Liquidity and Receivables
Management said operating cash flows may continue to be affected by franchisee payment delays and deferrals. Accounts and other receivables increased to $106.7 million from $73.7 million, and year-to-date cash flow was reduced by approximately $11.0 million from delayed franchisee payments.
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Elevated Leverage and Debt Sweeps
The Senior ABS Leverage Ratio was above 5.25x at July 5, 2026, requiring $23.3 million of cash-sweep prepayments to be included in current maturities. The company also stated its leverage ratio was above 5.0x, requiring scheduled amortization payments.
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Higher Tax Rate Reduced EPS
The effective tax rate increased to 36.9% from 20.9% year over year, with quarterly income tax expense rising to $12.3 million from $6.0 million. The increase contributed to diluted EPS declining to $1.03 from $1.15 despite higher operating income.
Management's outlook
The 10-Q provides no numeric EPS or revenue guidance and does not state a change versus prior company guidance. Management expects operating cash flows combined with the securitized financing facility to meet capital expenditure, working capital and debt-service requirements for at least the next twelve months and the foreseeable future.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.