Jersey Mike's Subs Inc.

Q2 same-store sales grew 2.3%, accelerating from 1.7% in Q1, and the growth was predominantly transaction-driven. System-wide sales were approximately $1.21 billion, up 10% year-over-year; total revenues increased 10% to $208 million; and adjusted EBITDA rose 7% to $114 million. Royalties and other revenue increased 11% to $138 million, advertising revenues increased 6%, and sales at company-owned stores increased 18% to $13 million. Management said adjusted EBITDA would have grown 18% year-over-year absent advertising timing differences, and noted no material impact from the Cyclospora outbreak. For 2026, the company expects same-store sales growth of 2.5% to 3% for the full year, including 3% to 4% in Q3; net unit growth of at least 8%; adjusted EBITDA growth of at least 20%, including at least 13% in Q3; and fully exchanged diluted share count of approximately 318 million. After the IPO and debt repayment, the company said it had approximately $1.5 billion of net debt, roughly $290 million of unrestricted cash, and leverage of about 4.4x.

Charlie Morrison framed the quarter as evidence that Jersey Mike's is making progress toward a $2 million average unit volume लक्ष्य, with momentum driven by broader digital marketing, menu innovation, and improved media execution. He said the company is in the early innings of a full-funnel marketing strategy after historically underinvesting in digital, and pointed to 22% growth in loyalty sign-ups, a 43% digital sales mix, and stronger Hispanic and Gen Z engagement. His tone was confident and expansionary, emphasizing discipline on promotions, protection of brand quality, and a large long-term development runway in the U.S. and abroad.

Michele Allen highlighted the quarter's core financials: same-store sales up 2.3%, system-wide sales up 10% to about $1.21 billion, revenues up 10% to $208 million, and adjusted EBITDA up 7% to $114 million. She explained that EBITDA growth was held back by a $10 million year-over-year difference in advertising timing, and said EBITDA would have grown 18% absent that issue; she also cited $8 million in lower costs from the move away from the area director model. On capital structure, she said the IPO generated about $300 million of primary proceeds that were used to repay debt, leaving roughly $1.5 billion of net debt, about $290 million of unrestricted cash, and leverage of approximately 4.4x. She added that the company expects to delever further, views a 3.5x to 4.5x leverage range as appropriate, and expects Q3 net interest expense of approximately $28 million.

Analysts pressed on the Q3 EBITDA guide, advertising spend timing, and whether the IPO itself was driving traffic; management said the advertising fund could be a couple of million positive or negative in Q3 and should largely reverse in Q4, and said the IPO was not the driver of sales acceleration. Questions also focused on how digital marketing is evolving, and management said the company has now moved into a full-funnel approach with TV, digital, influencers, and call-to-action messaging, with benefits expected to build into 2027 and beyond. Analysts asked about cannibalization, pricing, catering, first-party delivery, and dayparts; management said cannibalization has been less than 100 basis points and expected no change, pricing should be about 1 point or less in the back half, catering averages about 3% of sales but could reach 10% over time, and first-party delivery could grow from a small base toward 10% of sales.