Jack in the Box's (JACK) fiscal Q2 results highlighted ongoing sales pressure and persisting consumer spending headwinds, UBS said in a note emailed Thursday.
The restaurant chain reported late Wednesday Q2 non-GAAP earnings of $1.20 per diluted share, down from $1.46 a year earlier. Analysts polled by FactSet expected $1.11.
Revenue for the 12 weeks ended April 13 was $336.7 million, down from $365.4 million a year earlier. Analysts surveyed by FactSet expected $342.5 million.
According to UBS, the company's focus going forward will be on drivers that would boost sales in fiscal H2 and fiscal 2026 including menu innovation, value offerings and promotions, as well as store and technology upgrades.
During the company's earnings call, management also focused on the recently announced "JACK on Track" strategic plan which involves, among other things, block closures on top of the previously planned system closures of 1.5% to 2% in 2025, UBS said.
UBS analysts said the company's "likely priorities for capital allocation" include reducing debt, and lowering leverage "using proceeds from real estate sales."
UBS reiterated its neutral rating on the stock and cut its price target to $27 from $44.
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