Jersey Mike’s system sales rise 11% to $1.204 billion in third quarter
Key Facts
Jersey Mike’s reported an 11% increase in system sales to $1.204 billion in the fiscal third quarter ended September 27, 2026, compared with $1.083 billion a year earlier, according to its earnings release dated October 28. Same-store sales growth was 3.0%, down from 3.9% in the same period of 2025. Chief Executive Charlie Morrison said same-store sales “accelerated sequentially in the third quarter,” with transactions driving growth for the third consecutive quarter. The company had forecast 3.0% to 4.0% same-store sales growth in the third quarter in its second-quarter results. The result came in at the low end of that range, while system sales were also supported by new store openings.
Total revenue rose 10% to $209 million, as franchise and other revenue increased 12% to $143 million and advertising revenue grew 8% to $57 million. Net income, meanwhile, fell to $10 million from $32 million in the year-earlier quarter. The company attributed the decline to a one-time, non-cash $29 million stock-based compensation expense related to the IPO, as well as IPO professional fees. A gain on the sale of company-owned stores offset part of the impact of these costs. These items highlight the divergence between revenue and adjusted earnings growth on one hand and reported net income on the other.
Adjusted earnings before interest, taxes, depreciation and amortization rose 20% to $125 million, from $104 million a year earlier. The company said the increase reflected store growth and same-store sales gains, as well as a $9 million reduction in expenses for the former area director program. Jersey Mike’s reported adjusted net income of $74 million and adjusted earnings per share of $0.23 for the first time. Digital sales accounted for 43% of system sales, compared with 42% in the third quarter of 2025. Average unit volume was $1.386 million, versus $1.365 million a year earlier, according to company data.
The company opened 80 stores during the quarter, and net unit growth was 8.8% year over year. The system had 3,456 stores as of September 27, compared with 3,177 in the year-earlier period. Company data show 47 store openings in the first quarter and 83 in the second quarter of 2026, ahead of the third-quarter openings. The expanding network means system sales growth combines performance at existing stores with the addition of new units; the company defines system sales as net sales across all its stores. Operating cash flow totaled $177 million in the first three fiscal quarters of the year, while total debt reached $1.8 billion as of September 27.
Jersey Mike’s raised its fiscal 2026 outlook to at least 2.5% same-store sales growth, at least 8% net unit growth and an increase of at least 20% in adjusted earnings before interest, taxes, depreciation and amortization. Alongside the outlook, the company approved a share repurchase authorization of up to $100 million and a special cash distribution of $0.35 per share. The distribution is payable November 19 to shareholders of record on November 5, 2026. The company said net proceeds of about $301 million from its public offering were used to repay outstanding debt. The capital return decision comes as total debt stood at $1.8 billion at the end of September.
The company said its long-term strategic goal includes raising average unit volume to $2 million, while strengthening franchisee returns and expanding domestically and internationally. An earnings call was scheduled for October 28 at 8:30 a.m. Eastern time, with a replay available through November 11. On the same day, OneSpaWorld scheduled its fiscal third-quarter results presentation for 10:00 a.m. Eastern time, according to its investor relations page. OneSpaWorld reported fiscal second-quarter revenue of $261.2 million and net income of $23.2 million, up 9% and 16% year over year, respectively. In July, it had also raised its fiscal 2026 outlook to revenue of between $1.018 billion and $1.038 billion and adjusted earnings before interest, taxes, depreciation and amortization of between $130 million and $140 million.