Jersey Mike's Q3 revenue rises 10% as company adds $100 million buyback

Jersey Mike's Subs Inc. (JMKE) said on Oct. 28 that third-quarter revenue rose 10% to $209 million and that adjusted earnings per share were 23 cents. The quarter ended Sept. 27, 2026, and included its initial public offering, which closed on July 31, 2026.

The fast-casual restaurant franchisor, with more than 3,400 locations across the United States and Canada, said same-store sales rose 3.0%, driven by transactions.

Here's how the company did:

• Revenue: $209 million vs. $190 million a year earlier
• Adjusted EPS: 23 cents, with no prior-year figure because the company says its pre-IPO structure is not comparable
• Net income: $10 million vs. $32 million a year earlier
• Diluted loss per Class A share: 5 cents, for the period from July 31 through Sept. 27
• Adjusted EBITDA: $125 million vs. $104 million a year earlier

Royalties and other revenue rose 12% to $143 million, and advertising revenue rose 8% to $57 million. The company said both were driven by net store growth of 8.8% and same-store sales growth of 3.0%.

Net income fell to $10 million from $32 million. The company said the decline came from a $29 million one-time, non-cash, equity-based compensation charge tied to the IPO, along with IPO-related professional expenses. A gain on the sale of company-owned stores partly offset those costs.

Adjusted EBITDA rose 20% to $125 million. The company said the increase reflected store and same-store sales growth and $9 million in lower expenses related to its prior Area Director program.

CEO Charlie Morrison said: "We continue to see meaningful traction from our digital marketing initiatives as we work to expand our consumer reach and drive greater frequency over time." He added that same-store sales accelerated sequentially in the third quarter.

2026 guidance

For full-year fiscal 2026, the company expects same-store sales growth of at least 2.5%, net unit growth of at least 8% and Adjusted EBITDA growth of at least 20%.

Capital returns

On Oct. 26, the board approved a stock repurchase authorization of up to $100 million of Class A common stock. It also declared a special cash dividend of 35 cents per share, payable Nov. 19 to holders of Class A common stock as of the close of business on Nov. 5.

The company said the actions reflect its strong cash flow generation and its commitment to returning excess capital to stockholders. It generated $177 million of operating cash flow in the first three fiscal quarters of 2026.

The company received net proceeds of about $301 million from issuing 13,782,609 shares of Class A common stock in the IPO, and used the proceeds to repay debt. As of Sept. 27, total debt was $1.8 billion and cash, cash equivalents and restricted cash were $325 million.

Stores and costs

The company opened 80 stores in the quarter and closed two, ending with 3,456 stores systemwide. Of the 3,415 stores in the United States, 3,393 were franchised and 22 were company-owned.

General and administrative expenses rose to $87 million from $54 million a year earlier. The company's figures include $37 million of equity-based compensation and $17 million of IPO-related expenses.

The company will discuss the results on a conference call at 8:30 a.m. Eastern Time on Oct. 28.