Jack in the Box Inc. JACK has announced that it is expanding on its prior development agreements to open franchisee locations in West Michigan. The recently announced agreement highlights the opening of five new stores in the Detroit, MI, market with different franchisees.
The five new locations will offer dine-in, drive-thru and mobile ordering options, ensuring top-tier services for customers.
JACK’s Anticipated Openings in Michigan
Before signing the five-unit development agreement in Detroit, JACK already started its expansion plans with five locations in West Michigan. These locations are currently under construction and are expected to open over the next five years, with the first one scheduled to open in Battle Creek.
Furthermore, the company recently opened two Cloud Kitchens in downtown Chicago, IL, and is on track for additional Chicagoland expansion. The expansion in Chicagoland will underscore the planned opening of eight company-operated units and 12 commitments with a new franchisee.
The moves mentioned above condense toward JACK’s plan on expanding into the Midwest market of the United States. Given the trajectory of new location openings, it can be understood that the company is positioning itself well to expand its market reach and customer base in the country, thus fostering sales growth.
Jack in the Box’s Development Efforts Bode Well
Jack in the Box continues to collaborate with its franchisees and leverage guest insights to ensure value remains a competitive advantage for both brands. Its restaurants are primarily franchised, highlighting that franchising a large chunk of its system will lower its general and administrative expenses and boost earnings.
In fiscal 2024, JACK opened 30 new restaurants, including 16 new restaurant openings during the fourth quarter. Since the launch of the development program in 2021, the company has signed 101 agreements for 464 restaurants, with 51 already opened as of the end of the fiscal fourth quarter. It emphasized rapid expansion plans in the Chicago market, with intentions to open eight company-operated locations in the calendar year 2025, along with entering into an agreement with a new franchisee for 12 restaurants. It also, expects to enter the Florida market by the end of calendar year 2024.
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JACK stock has declined 10.4% in the past three months against the Zacks Retail - Restaurants industry’s 5.5% growth. The company is affected by softer sales performance due to a decrease in transactions and an unfavorable menu mix, given the uncertain market scenario regarding discretionary spending. Nonetheless, the company’s ongoing unit development efforts, focus on delivery channel strengthening and menu innovation are likely to boost growth in the upcoming period.
JACK’s Zacks Rank & Key Picks
Jack in the Box currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.
Deckers Outdoor Corporation DECK currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DECK has a trailing four-quarter earnings surprise of 41.1%, on average. The stock has gained 18.5% in the past six months. The Zacks Consensus Estimate for DECK’s fiscal 2025 sales and earnings per share (EPS) indicates growth of 13.6% and 12.6%, respectively, from the year-ago period’s levels.
Brinker International, Inc. EAT presently flaunts a Zacks Rank of 1. EAT has a trailing four-quarter earnings surprise of 12.1%, on average. The stock has surged 93.3% in the past six months.
The consensus estimate for EAT’s fiscal 2025 sales and EPS indicates growth of 7.9% and 34.6%, respectively, from the year-ago period’s levels.
Sprouts Farmers Market, Inc. SFM currently sports a Zacks Rank of 1. SFM has a trailing four-quarter earnings surprise of 15.3%, on average. The stock has risen 80.3% in the past six months.
The Zacks Consensus Estimate for SFM’s 2024 sales and EPS indicates a rise of 12.2% and 29.6%, respectively, from the year-ago period’s levels.
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