JMKE Q2 Results Show Growth After IPO
JMKE Q2 results show revenue and adjusted EBITDA growth but a $10 million ad-fund timing hit clouds near-term EBITDA quality and trader positioning.
KEY TAKEAWAYS
- Adjusted EBITDA rose 7.0% to $114 million and would have been 18.0% higher excluding $10 million advertising-fund timing.
- Revenue rose 10.0% to $208 million and systemwide sales were $1.2 billion; same-store sales increased 2.3%.
- Management guided at least 20.0% adjusted EBITDA growth and at least 8.0% net unit growth for fiscal 2026.
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Jersey Mike’s Subs Inc. reported fiscal second-quarter 2026 results on Sept. 9, 2026, its first public quarter since the summer IPO. JMKE Q2 results showed revenue growth and higher adjusted EBITDA despite a decline in GAAP profit, which management attributed to transaction-driven traffic gains.
Revenue, Profitability, and Cash Flow
The company said total revenue for the quarter ended June 28, 2026, reached $208 million, a 10.0% increase year over year. Systemwide sales rose 10.0% to $1.21 billion, consistent with the revenue growth. Same-store sales grew 2.3%, accelerating from 1.7% in the prior quarter.
Adjusted EBITDA rose 7.0% to $114 million, including a $10 million net adverse impact from advertising-fund timing. Excluding this effect, adjusted EBITDA would have increased 18.0%, helped by about $8 million in lower expenses related to the prior Area Director program.
GAAP net income declined to $37 million from $59 million a year earlier. The company attributed the drop to non-routine expenses, advertising-fund timing, and higher interest costs, partially offset by a $14 million gain on the sale of corporate-owned stores.
Operating cash flow for the first two fiscal quarters totaled $105 million, which included $11 million of IPO-related and other discrete outflows tied to the transition to a corporate structure. Capital expenditures in the quarter were $3 million.
Store Expansion, Digital Sales, and Outlook
Jersey Mike’s opened 83 new stores in the quarter, driving net unit growth of 8.1% year over year and bringing the total store count to 3,378. This included 3,322 domestic franchised locations, 30 international franchised stores, and 26 company-owned units.
Digital sales accounted for 43.0% of systemwide sales, up from 41.0% a year earlier. Average unit volume increased to $1.376 million from $1.354 million. Chief Executive Officer Charlie Morrison said, “Our second quarter same-store sales demonstrate strong progress against our long-term objective of achieving $2 million average unit volumes.”
The company issued fiscal 2026 guidance calling for same-store sales growth of 2.5% to 3.0%, net unit growth of at least 8.0%, and adjusted EBITDA growth of at least 20.0%. For the third quarter, it forecast same-store sales growth of 3.0% to 4.0% and adjusted EBITDA growth of at least 13.0%. Management said the outlook assumes continued transaction-led comps supported by digital marketing, loyalty expansion, and limited-time menu promotions. Forward EBITDA gains are expected to benefit from new store openings, stronger digital channels, and lower expenses tied to the prior Area Director program.
