Jersey Mike’s Is Packing Stores. Investors Wants More From the Bottom Line
Jersey Mike’s Subs delivered higher sales and more customer traffic in its first earnings report since going public in July. Restaurant chains have often relied on price increases to lift sales as customers cut back, which makes the traffic growth at Jersey Mike’s stand out.
Fiscal second-quarter revenue rose 10% to $208M, while systemwide sales climbed 10%. Same-store sales increased 2.3%, with more transactions doing the work rather than higher menu prices.
Jersey Mike’s opened 83 stores during the quarter, taking its systemwide footprint to nearly 3.4K locations.
More customers came through the door
Transaction growth drove most of the same-store sales increase, while digital sales reached 43% of systemwide sales, up from 41% a year earlier.
Management is expanding digital ordering and adding products as it tries to reach more customers without moving too far from the menu that built the chain.
Jersey Mike’s now expects fiscal 2026 same-store sales to rise 2.5% to 3%, with growth reaching 3% to 4% in the third quarter.
Adjusted EBITDA increased to $114M from $107M despite a $10M hit from the timing of advertising fund expenses.
Stronger stores meet a weaker bottom line
Net income fell to $37M from $59M a year earlier even as revenue, systemwide sales, traffic, and store count all increased during the quarter.
Non-routine expenses, advertising timing, and higher interest costs weighed on profit, partly offset by a $14M gain from selling company-owned restaurants.
Jersey Mike’s transition from Blackstone ownership to the public market has brought costs that make the bottom line harder to read. New stores and customer traffic are moving higher, while interest expense and transaction-related costs continue to run through earnings.
Interest expense and purchase-accounting effects can weigh on reported profit even when the restaurant business remains healthy underneath.
Store growth and traffic gave Jersey Mike’s plenty to work with in its first earnings report as a public company. Getting more of those sales through to the bottom line is where the next few quarters get interesting.