Jersey Mike’s shares fell about 2% on Thursday afternoon after the sandwich chain made its stock market debut on the New York Stock Exchange (NYSE) under the ticker symbol “JMKE.” The stock opened at $21 per share, which was lower than its IPO (Initial Public Offering) price of $23 per share. The IPO price of $23 was set at the middle of the expected price range of $21 to $25 per share.
Jersey Mike’s sold 43.5 million shares in the IPO and raised around $1 billion from investors. The IPO valued Jersey Mike’s at about $7.3 billion. According to CNBC, this became one of the biggest amounts of money ever raised by a restaurant company through an IPO.
Jersey Mike’s business keeps growing
Jersey Mike’s currently operates nearly 3,300 restaurants across the US. It is the second-largest hoagie (submarine sandwich) chain in the United States after Subway. The company reported a net profit of $55 million in the last financial year. Its total revenue for the year reached $724 million. Jersey Mike’s same-store sales increased by 3% during the year.
Why investors like Jersey Mike’s
Despite those challenges, Jersey Mike’s has continued to perform better than many restaurant competitors. According to CNBC, investors were attracted to the company because its restaurants generate high average sales and it mainly operates through a franchise model, which requires less capital from the company itself.
CEO Charlie Morrison said Jersey Mike’s customers are generally “a little higher income,” which has helped protect the business from weaker consumer spending. Morrison said, “We’re seeing the consumer come back.” He added, “We’ve seen positive transition growth. In fact, most of our same-store sales growth this year to date has been driven primarily by transaction growth”, according to CNBC.
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Jersey Mike’s growth and expansion plans
Jersey Mike’s founder Peter Cancro started working at a sandwich shop on the Jersey Shore when he was just 14 years old in 1971. Four years later, Cancro raised enough money to buy Mike’s Subs. He later renamed the business Jersey Mike’s and began expanding it through franchising. Today, franchise owners operate about 99.2% of all Jersey Mike’s restaurants.
In late 2024, investment firm Blackstone bought a majority stake in Jersey Mike’s in a deal reportedly valued at around $8 billion, including debt. After the Blackstone deal was completed, Charlie Morrison was appointed as Jersey Mike’s CEO. Before joining Jersey Mike’s, Morrison led Wingstop for more than 10 years and also guided Wingstop through its own IPO.
Morrison said he sees many similarities between Wingstop and Jersey Mike’s because both companies mainly operate through franchised restaurants and generate free cash flow for investors, according to CNBC. Jersey Mike’s plans to use the money raised from the IPO mainly to reduce debt and for general corporate purposes. The company also plans to expand more aggressively outside the United States.
Most Jersey Mike’s restaurants are currently located in the US, which CNBC described as a relatively mature market for hoagie sandwiches. Peter Cancro, who still owns a stake in the company, has signed a master franchise agreement to expand Jersey Mike’s into the United Kingdom and Ireland.
In the long term, Jersey Mike’s believes it has the potential to operate 15,000 restaurants worldwide. The company expects around half of those future restaurants to be in the US and the other half in international markets. Morrison said, “One of the benefits of being a publicly traded company on the New York Stock Exchange is that we get a lot of awareness of the brand, not only in the US, but also around the world”, according to CNBC.