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Jack In The Box Mulls Sale

Fast food operator Jack in the Box, which has about 2,200 restaurants in 21 states that sell tacos, burgers and other fast food, is talking to buyers about a potential sale.


A timetable has yet to be specified, the Wall Street Journal reports.

Lately activist investors, such as Blue Harbour Group and Jana Partners, have taken stakes in the company. Each holds about 7% of outstanding shares in the chain, a circumstance that might be pressuring the company to consider a sale. Jana Partners held Whole Foods shares as an activist investor before Amazon snapped up the grocer.

Jack in the Box has seen revenue and earnings slide recently. The company generated revenue of $869.7M for the year ending in September, down from $1.1B a year ago, and earnings dropped to $104.3M from $128.6M over the same period.

Also, same-store sales companywide eked out a 0.1% gain for the year ending in September compared to the previous year.

The San Diego-based Jack in the Box used to own burrito chain Qdoba, but sold it for $305M to private-equity firm Apollo Global Management in a deal that closed early this year.

"We’re in the final stages of transforming our business model to an asset-light, single-brand entity," Jack in the Box CEO Leonard Comma said during the company's most recent earnings call in November.

Comma also said that new restaurant construction for the company will be patterned after smaller prototypes that opened this year in San Diego and Riverside, California.

"Our goal for this prototype was to develop a smaller restaurant that could allow the brand to expand on smaller pieces of real estate at lower overall development costs," Comma said.