Jack in the Box sold its Del Taco brand for $115 million, a significant loss from the $575 million it paid in 2022. The company is also closing 150-200 underperforming restaurants due to weakened consumer demand and rising costs, leading to a 7.4% decline in same-store sales for the Jack brand.

Facing pressure from weakened consumer demand, Jack in the Box is struggling with negative traffic trends and rising costs. The company’s same-store sales declined by 7.4% in the latest quarter, with underperforming restaurants being closed. The limited international presence could further impact its competitive position.

Jack in the Box’s stock (JACK) is ranked as a Zacks Rank #5 (Strong Sell) stock in the Retail – Restaurants industry group, which is currently underperforming the market. The company has been facing earnings misses, with a 30 cents per share reported in the last quarter, falling short of estimates by -34.78%.

With a sustained downtrend in its stock performance, Jack in the Box has experienced a “death cross” with its moving averages. Falling earnings estimates and technical indicators suggest a challenging road ahead for the company. Potential investors may want to consider short or hedge strategies until significant improvements are seen.

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Read more at Nasdaq: Bear of the Day: Jack in the Box (JACK)