Jersey Mike's IPO slips 3% after shares price at $23
Jersey Mike’s began trading on the NYSE as JMKE, raising about $1 billion while shares opened below the IPO price.
By Maya Okafor · Markets Writer
· 3 min read
Jersey Mike’s IPO gave public-market investors their first chance to trade the sandwich chain Thursday, but the stock started below its deal price. CNBC reported that shares fell about 3% in afternoon trading after the company listed on the New York Stock Exchange under the ticker JMKE.
The company priced its initial public offering at $23 a share, the middle of its expected $21 to $25 range, according to CNBC. An IPO is when a private company sells shares to public investors for the first time, often raising cash while giving early owners a way to sell part of their stake.
Jersey Mike’s opened at $21 a share. The chain sold 43.5 million shares, bringing in about $1 billion and valuing the business at $7.3 billion, CNBC reported. That raise puts Jersey Mike’s among the largest restaurant IPO fundraises on record.
What happened in the Jersey Mike's IPO?
Jersey Mike’s became the largest publicly traded hoagie sandwich chain, according to CNBC. The company has nearly 3,300 restaurants, ranking second in the U.S. category behind Subway.
The size of the offering matters because it gives investors a fresh public comparison point for restaurant chains built around franchising. A company’s public valuation, often discussed through market cap, shows how the stock market is pricing the business based on its shares.
Jersey Mike’s reported $55 million in net income on $724 million in total revenue last year, according to CNBC. Same-store sales rose 3%. Same-store sales measure revenue growth at locations open at least a year, which helps investors separate growth from new restaurant openings from growth at existing shops.
CNBC reported that Jersey Mike’s appealed to investors because of its high average unit volumes and asset-light franchise model. Average unit volume refers to sales generated by a typical restaurant. A franchise model is called asset-light when independent operators own or run most locations, so the parent company can collect fees and royalties without funding every restaurant itself.
Restaurant chains have been under pressure as diners eat out less often or look for lower-cost options, CNBC reported. Jersey Mike’s has held up better than much of the industry, and CEO Charlie Morrison told CNBC the chain’s customer base tends to skew “a little higher income,” which has helped buffer it from some consumer-spending weakness.
“We’re seeing the consumer come back,” Morrison told CNBC. “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.”
How does Jersey Mike's plan to grow?
Jersey Mike’s said it plans to use proceeds from the offering to reduce debt and for general corporate purposes, CNBC reported. The company also plans to expand outside the U.S., where most of its restaurants are currently located.
Founder Peter Cancro began working at a Jersey Shore sandwich shop in 1971 at age 14, then bought Mike’s Subs four years later, according to CNBC. He later renamed the business and began franchising. Franchisees now operate 99.2% of Jersey Mike’s locations.
Blackstone bought a majority stake in Jersey Mike’s in late 2024 in a deal reportedly valued at about $8 billion including debt, CNBC reported. After that deal closed, Jersey Mike’s named Morrison CEO. Morrison previously led Wingstop for more than a decade, including during that company’s IPO.
Cancro has retained some equity in Jersey Mike’s and signed a master franchise agreement to bring the chain to the United Kingdom and Ireland, according to CNBC. Longer term, Jersey Mike’s sees room for 15,000 restaurants worldwide, split evenly between the U.S. and international markets.
CNBC reported that other consumer companies are watching the IPO market as well. Inspire Brands, owner of Dunkin’ and Jimmy John’s, has confidentially filed for an IPO, while clothing company Reformation was expected to debut Thursday after pricing shares at $15, the low end of its expected range.
This story draws on original reporting from CNBC.
