Lake Forest-based Del Taco, owned by Jack in the Box Inc. (NASDAQ: JACK), reported first quarter same-store sales fell 4.5% to $285 million.
“For Del Taco, it was another challenging quarter with pressured same-store sales results, and Del is also expected to post negative same-store sales in the second quarter,” interim principal executive officer Lance Tucker said in an earnings call with analysts on Tuesday.
Jack’s CEO Darin Harris resigned from his post this week after five years with the fast-food chain and will stay as a consultant through March 14.
“With that said, we have seen an encouraging start to the menu optimization initiative, which rolled out system wide in the middle of the first quarter and has driven higher attach rates and better average check,” Tucker added.
Jack in the Box also cited increased costs for labor and the ongoing refranchising of company-owned restaurants, the latter leading to a decrease in total locations, for Del Taco’s decreases in both restaurant- and franchise-level margins as well, down 13.8% and 25.7%, respectively.
Systemwide sales for the fiscal first quarter also decreased 1.9%.
Del Taco’s restaurant count is 589 as of January and is expected to fall within Jack’s original guidance of opening 15 to 20 restaurants in the 2025 fiscal year. The taco chain is approximately 80% franchise owned, according to Tucker.
