Jack In The Box Inc.

standing by. My name is Tina and I will be your conference operator today. At this time, I would like to welcome everyone to the Jack in the Box fourth quarter fiscal year earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question, simply press star one on your telephone keypad. To withdraw your question, press star one again. It is now my pleasure to turn the call over to Rachel Webb, Vice President of Investor Relations. Please go ahead.

Thanks, Operator, and good afternoon, everyone. We appreciate you joining today's conference call, highlighting results from our fourth quarter and fiscal year 2025. With me today, our Chief Executive Officer, Lance Tucker, our Chief Financial Officer, Don Hooper, and our Chief Customer and Digital Officer, Ryan Ostrom. Following their prepared remarks, we will be happy to take questions from our covering sell side analysts. Note that during both our discussion and Q&A, we may refer to non-GAAP items. Please refer to the non-GAAP reconciliations provided in the earnings release, which is available on our investor relations website at jackinthebox.com. We will also be making forward-looking statements based on current information and judgments that reflect management's outlook for the future. However, actual results may differ materially from these expectations because of business risks. We therefore consider the safe harbor statement in the earnings release and the cautionary statements in our most recent 10-K to be part of our discussion. Material risk factors, as well as information relating to company operations, are detailed in our most recent 10-K, 10-Q, and other public documents filed with the SEC. and are available on our investor relations website. Additionally, the company intends to file a proxy statement and related materials with the SEC in connection with the 2026 annual meeting of stockholders. Our directors and certain officers will be participants in the solicitation of proxies in connection with the annual meeting. Stockholders are encouraged to read the proxy statement and related materials when they become available as they will contain important information, including the identity of the participants and their direct or indirect interests by security holdings or otherwise. And with that, I would like to turn the call over to our Chief Executive Officer, Lance Tucker.

Lance Tucker Thanks, Rachel, and I appreciate everyone joining us today. I want to begin by thanking our teams, our franchisees, and our shareholders. Fiscal 2025 was an eventful year for Jack in the Box. and I continue to be inspired by our stakeholders' passion and support for the efforts we're making to unlock the company's long-term potential. As we approach our 75th anniversary, we're committed to improving performance today while laying the foundation for sustained shareholder value over the next 75 years. Throughout today's prepared remarks, I'll provide an update on our Jack on Track plan, the current state of the business, and the actions we are taking to restore momentum at Jack in the Box and position the company for sustainable growth. I'll then turn it over to Don for a deeper dive into fourth quarter results, our 2026 outlook, along with how to think about the standalone Jack in the Box model going forward. When we announced Jack on Track back in April, one of our key goals was to simplify the business and sharpen our investment thesis. I'm pleased with the progress we have made so far. As you saw in October, we announced the pending divestiture of Del Taco This is a meaningful step that, when complete, will allow us to fully recenter our attention on strengthening the Jack in the Box brand and executing the remaining elements of our Jack on Track plan. I want to thank the Del Taco team for their partnership throughout this transition. We've also made good progress on our closure program and have numerous real estate transactions in process, so these key components of the Jack on Track program are also progressing as expected. While we're pleased with our progress on our Jack on Track initiatives, we are clearly not satisfied with our 2025 operating performance, and we are rebuilding our operational discipline to drive growth and shareholder value in 2026 and well beyond. I'll speak more to this shortly. Now turning to our fourth quarter results. Our fourth quarter was really a story of two halves. The first few weeks of the quarter started off rocky, as I alluded to on our last conference call. Our value equation was not resonating and lacked enough price point of value, and we moved swiftly to address it with more demonstrable value later in the quarter. Coming out of August, we adapted quickly and implemented a true barbell promotional strategy. We pivoted media and marketing to feature our $4.99 bonus jack combo, a compelling offer that resonates well with our value-seeking guests. We also featured our $5 smashed jack in a culturally relevant sporting event, that included pulsing digital offers, all of which drove incremental trial of the best merger in QSR. The overall result, transactions improved throughout the quarter as guests opted into our value strategy, though check remained pressured, particularly as we continued to lap significant price increases from last year taken to combat big wage increases. All told, sales trends improved roughly 300 basis points throughout the course of the fourth quarter. As we've moved into the first quarter, our barbell strategy continues, and we largely maintained similar performance to what we saw at the end of Q4. Though like many brands, we've recently seen a few weeks of downward pressure tied to the effects of the government shutdown, as well as lapping several weeks of our own stronger results from last year. Beyond the promotions we ran in Q4, we've made several changes to our menu to improve everyday value. In early October, we right-sized pricing on three of our signature combos, making them more affordable for our guests. We've also increased our cup sizes on small combos. While we know these changes won't improve results overnight, we are taking necessary steps to enhance how we improve our value perception, and we will continue refining our menu strategy. Over the past few months, we've pulled several levers to drive improvement, but there's still significant progress to be made. Our category is more competitive than ever, and consumers are very careful about where they spend. We are committed to a strategy grounded in driving value for guests while protecting profitability for ourselves and our franchisees, whether through boosting check or driving cost efficiency. We also know the entire guest experience plays into the value perception, not just promotion or price. As we build the foundation for Jack's Way, we are focused on consistency. consistency across our operations, our food quality, and an elevated overall experience for the guests. First, we are making strides in operational excellence. We identified a critical gap in our field support and restructure our field teams to spend more than twice as much time in restaurants. This helps provide more real-time coaching to our team members and holds restaurants more accountable while also rewarding top performers. In the near term, we are retraining the entire system with a disciplined focus on getting back to basics. It isn't glamorous, but it is essential. And we have already received great feedback from our franchisees and employees on these efforts. Second, doing things Jack's way also means serving high quality food and leading the way with innovation. Our priority is clear. We need to serve hotter, juicier burgers with greater consistency across the system. So we've challenged ourselves to rethink how we deliver, starting with the fundamentals, cooking procedures, ingredients, and training. Shannon McKitty is doing a great job driving rapid improvement in our ops fundamentals. We've also reinvested in culinary innovation and welcomed our new executive chef, Kieran Duffy, to lead the effort. He has already shared concepts that we believe will elevate both quality and craveability for our guests. As we celebrate Jack's 75th anniversary and bring back some of our customer fan favorites for a limited time, we'll be ramping up our innovation and quality improvements that position us to exit 2026 in a much stronger place than we entered. The final component of Jack's Way is modernizing our restaurants. We continue to work through the tenets of a comprehensive re-image program, and we'll keep you updated on our progress. Meanwhile, we are currently testing a proof of concept on a handful of restaurants with a mini refresh that can be executed quickly while generating modest uplift for the brand so we can get some immediate learnings. We know all of these things must work in tandem, the right menu, the right level of service, and a welcome environment, and an overall experience that meets the customer's expectations. As you can probably tell, but to put a little finer point on it, 2026 will very much be a rebuilding year. Looking ahead to the next 12 months, Here's what I expect Jack in the Box to achieve. First and foremost, I expect same-store sales for Jack in the Box brand to return to positive as we utilize our barbell promotional approach throughout the year, enhance our operations, and improve the overall guest experience. Second, I expect the Del Taco divestiture and associated TSA will be fully completed, and we will be well on our way to rightsizing the organization as a standalone Jack in the Box brand. Third, our restaurant base will be substantially cleaned up with the closure of many of our underperforming restaurants behind us. Sales transfer from closed restaurants will benefit our remaining restaurants and profitability will be improved. Fourth, later in the year, I expect us to begin actively executing a re-image program that will ultimately impact the majority of our restaurants, driving even stronger volumes and generating more guest excitement around the brand. And finally, we will have made significant progress in paying down our debt with a market improvement in reducing our overall debt levels. As you can tell, there is real work ahead, but we have the right plan in place and the right leadership focus to execute our plans in the coming months. And while 2025 was a challenging year, Jack in the Box remains in a position of strength with AUVs approaching $2 million, a resilient and dedicated franchise base, and core brand equities to leverage as we work to restore momentum. You can continue to expect transparency from us on progress as we're building towards long-term sustainable growth. We expect to exit 2026 as a stronger, more disciplined, and more valuable jack-in-the-box, positioned to drive sustained profitability and create long-term shareholder value. I will now turn the call over to Don to dive deeper into fourth quarter results and specifics around 2026 guidance.