Jack in the Box Inc. (NASDAQ:JACK) stock was up on Wednesday following news that it is considering a Qdoba spinoff.
Jack in the Box Inc. Chairman and CEO Lenny Comma says that the company is considering strategic alternatives for Qdoba. He made this announcement in the company’s earnings report for the second quarter of 2017.
Jack in the Box Inc. has brought in Morgan Stanley & Co. LLC to help deal with the Qdoba situation. The investment banking company will assist JACK’s Board with evaluating the different strategic options available to them. It will also look for other ways that the company can increase value for its shareholders.
Jack in the Box Inc. made its decision about Qdoba after it reported less than stellar results for the second quarter of the year. Comma notes that the restaurant chain saw its same-store sales decline during the last two most of the second quarter in 2017. However, same-store sales for the quarter were up, and are currently up for the third quarter of the year.
“At our investor meeting last May, we said one of the factors that would cause us to reconsider our strategy with respect to Qdoba was valuation,” the Jack in the Box Inc. CEO said in a statement. “It has become more apparent since then that the overall valuation of the company is being impacted by having two different business models.
JACK stock was up 7% as of Wednesday morning, but is down 1% year-to-date.
