Jersey Mike's — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue increased 10% year over year to $208 million, driven by a 10% increase in systemwide sales to $1.210 billion.
• Net income for the quarter was $37 million, down from $59 million in the prior year, impacted by non-routine expenses, advertising fund timing, higher interest expense, and partially offset by a $14 million gain on the sale of corporate-owned stores.
• Adjusted EBITDA increased 7% to $114 million from $107 million in the prior year; excluding a $10 million net adverse impact from advertising fund timing, Adjusted EBITDA increased 18%.
• Royalties and other revenue grew 11% to $138 million, while advertising revenue increased 6% to $57 million.
• Operating cash flow for the first two fiscal quarters of 2026 was $105 million, including $11 million in cash use for IPO-related and discrete outflows associated with the transition to a corporate-led organization.
• Capital expenditures in the second quarter were $3 million.
• Total debt stood at $2,096 million as of June 28, 2026, compared to $2,084 million as of December 28, 2025.
• Cash, cash equivalents, and restricted cash were $265 million as of June 28, 2026.

Guidance and Future Outlook

• Full-year fiscal 2026 same-store sales growth is projected at 2.5-3.0%, with third-quarter growth expected to be 3.0-4.0%.
• Net unit growth for the full year is guided to be at least 8%.
• Adjusted EBITDA growth for the full year is guided to be at least 20%, including at least 13% growth in the third quarter.
• Management highlighted continued same-store sales momentum into the third quarter.

Business Segments and Product Lines

• Systemwide sales grew 10% year over year to $1.210 billion.
• Same-store sales increased 2.3% year over year, primarily driven by transaction growth, compared to 3.6% in the prior year.
• Digital sales mix increased to 43% from 41% in the prior year.
• Average unit volume (AUV) reached $1.376 million, up from $1.354 million in the prior year.
• The company opened 83 new stores in the quarter, resulting in net unit growth of 8.1% year over year.
• Total store count reached 3,378 as of June 28, 2026, comprising 3,322 franchised stores and 26 company-owned stores in the U.S., plus 30 international franchised stores.

Market and Competitive Landscape

• Jersey Mike's earned the American Customer Satisfaction Index (ACSI) designation as the number one QSR brand in the country for 2026.
• The brand was recognized as the #1 Best Sandwich Chain in America in 2025.
• Management noted that same-store sales acceleration occurred despite challenged traffic trends across the industry.

Risks and Challenges

• Net income was negatively impacted by higher interest expense and non-routine expenses.
• Adjusted EBITDA was temporarily reduced by a $10 million net adverse impact related to the timing of the advertising fund.
• The company incurred $11 million in cash outflows related to the transition from a founder-led company to a corporate-led organization, including IPO-related costs.
• Forward-looking statements note that actual results may differ due to factors beyond control, including market conditions and the occurrence of adjusting items not yet predictable.

Management Commentary and Tone

• CEO Charlie Morrison stated that second-quarter same-store sales demonstrate strong progress toward the long-term objective of achieving $2 million average unit volumes.
• Morrison expressed encouragement regarding the acceleration in same-store sales driven by transaction growth amidst industry-wide traffic challenges.
• Management emphasized efforts to broaden the consumer base, grow digital channels, and deliver on the vision of being the world's most beloved destination for authentic sub sandwiches.
• The tone reflected pride in the ACSI designation, attributing the honor to the efforts of franchise owners.

Other Key Points

• The company is transitioning from a founder-led organization to a corporate-led organization, incurring one-time costs including IPO-related expenses ($7 million in Q2) and corporate transition expenses ($7 million in Q2).
• A $14 million gain was recognized on the sale of company-owned stores in the second quarter.
• The company paid $20 million in Area Director buyouts in the second quarter to terminate contracts mandating a percentage of gross sales for geographic regions.
• Equity-based compensation expense was $3 million in the second quarter.
• The conference call and webcast for Q2 2026 results were held on September 9, 2026.