What Happened?
Shares of fast-food chain Jack in the Box (NASDAQ: JACK) fell 3.6% in the afternoon session after the stock continued to pull back as the company reported second-quarter 2025 financial results that missed revenue expectations, alongside a significant drop in same-store sales.
For the second quarter, the fast-food chain's revenue declined 9.8% year on year to $333 million, falling short of Wall Street's estimate of $340 million. While its earnings per share of $1.15 met analyst expectations, other key metrics pointed to underlying weakness. A significant area of concern for investors was a steep 7.1% year-on-year decline in same-store sales, a key indicator of a restaurant's performance, which worsened from a 2.5% decline in the same quarter last year. Furthermore, the company's adjusted EBITDA of $61.63 million also missed the consensus estimate of $64.59 million. Overall, the weaker-than-expected revenue and sharp drop in customer demand at existing locations overshadowed the in-line earnings, raising concerns about the company's outlook.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Jack in the Box? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Jack in the Box’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 17 days ago when the stock dropped 3% on the news that a surprisingly weak U.S. jobs report and renewed fears over international trade policy fueled concerns about a slowdown in consumer spending. The July 2025 jobs report revealed that hiring slowed dramatically, with the U.S. economy adding only 73,000 new jobs—the weakest gain in over two years. Furthermore, job numbers for May and June were revised significantly lower, suggesting the labor market is weaker than previously thought. This is a critical headwind for restaurants, as a shaky job market often leads consumers to cut back on discretionary spending like dining out. Compounding the issue, the announcement of new U.S. tariffs on trading partners has heightened fears of inflation and a broader economic slowdown, prompting investors to sell shares in consumer-facing sectors.
Jack in the Box is down 52.9% since the beginning of the year, and at $19.29 per share, it is trading 63.2% below its 52-week high of $52.42 from August 2024. Investors who bought $1,000 worth of Jack in the Box’s shares 5 years ago would now be looking at an investment worth $237.24.
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