Jack in the Box rallies after selling off struggling Qdoba brand

  • Jack in the Box‘s stock jumped after news that it was selling its struggling Qdoba chain.
  • Qdoba has reported declining same-store sales in the past few quarters.
  • Click here to view Jack in the Box’s real-time stock price.

Shares of fast-food chain Jack in the Box jumped on Wednesday by 2.1% to $US102.45 per share after it announced the sale of Qdoba to Apollo Global Management for $US350 million.

The fast-casual Mexican chain struggled against competition as higher food, packaging, and labour costs weighed on the restaurant. Though the Tex-Mex chain has fared better than its nearest competitor, Chipotle, Qdoba reported a decline in same-store sales of 3.1% in the third quarter and 2.7% year-over-year. Total earnings for Jack in the Box also fell.

The company said in its third-quarter report that it was working with Morgan Stanley to evaluate “potential alternatives with respect to Qdoba.”

Jack in the Box’s stock is down 5.42% since the start of the year.

To read why Qdoba’s competitor, Chipotle, isn’t doing so well, click here.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.