11:47 AM EST, 11/21/2024 (MT Newswires) -- Jack in the Box's (JACK) fiscal Q4 results and initial fiscal year 2025 guidance missed expectations due to limited top-line growth and pressures like elevated California wage," RBC Capital Markets said in a note Thursday.

"Top-line growth is expected to be limited next year and combined with elevated California wages continues to weigh on restaurant-level margins," the investment firm said.

Improvement in comparable sales was driven by menu innovation, digital initiatives, and a strong late-night daypart performance, while the newly launched app and platforms like "Munchies Under $4" provided pricing tailwinds, RBC said.

The firm said that franchisee net additions were slightly negative in fiscal year 2024 due to 21 closures in Q4 and continued closures may raise investor concerns if comparable sales fail to recover.

RBC lowered its price target to $65 from $70 and reiterated an outperform rating on the stock.

Shares of the company were up 4% in recent trading.

Price: 47.53, Change: +1.93, Percent Change: +4.23