Company: JACK
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0000807882-25-000043
Chunk: 60

Company: JACK IN THE BOX INC
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 1
Chunk 60
---
 development factors in the prior year related to workers compensation and general liability claims.

Impairment of Goodwill and Intangible Assets

During the second quarter of 2025, the Company had identified additional triggering events that indicated the goodwill allocated to the Del Taco reporting unit might be further impaired, including i) continued negative trend in Del Taco same store sales, ii) unfavorable changes in the economic environment specifically impacting our industry, including inflation and interest rates, iii) the potential for a divestment of Del Taco, and iv) a sustained lower share price. As a result, the Company performed a quantitative test over the Del Taco reporting unit, noting that the fair value of the reporting unit was less than the carrying value, which resulted in an impairment of goodwill of $25.3 million for the second quarter of 2025. The valuation used a blended approach with a discounted cash flow analysis in conjunction with a market approach. Assumptions and estimates used in determining fair value include future revenues, operating costs, new store openings, capital expenditures, a discount rate that approximates the Company’s weighted average cost of capital and a selection of comparable companies. The Company determined that there was no such triggering event for the Jack in the Box reporting unit.

As a result of the franchisee acquisition during the third quarter of 2025, the Company recognized additional goodwill of  $6.3 million. This additional goodwill was fully impaired based on the results of the quantitative impairment analysis performed in the second quarter of 2025.

During the second quarter of 2025, the Company also performed a quantitative analysis over its indefinte-lived intangible trademark asset and as a result, the Company recorded impairment of $177.9 million on the Del Taco trademark asset as noted below. During the third quarter of 2025, the Company performed a qualitative analysis over its indefinte-lived intangible trademark asset, noting no further impairment was deemed necessary.

28

Other Operating Expenses, Net

Other operating expenses, net is comprised of the following (in thousands):

QuarterYear-to-dateJuly 6,2025July 7,2024July 6,2025July 7,2024Integration and strategic initiatives$2,057 $4,723 $3,748 $14,612 Costs of closed restaurants and other1,917 160 4,684 1,792 Operating restaurant impairment charges1,058 136 2,935 136 Accelerated depreciation54 95 74 485