Jersey Mike's Shares Fall 2% in Public Debut After $23 IPO

Jersey Mike's opened its first day of trading on the New York Stock Exchange at $21 per share, 8.7% below the $23 initial public offering price. The stock traded around $21.50 in the afternoon, down about 2% from the open. The company sold 43.5 million shares, raising roughly $1 billion and giving it a market value of $7.3 billion. It is one of the largest restaurant IPOs ever.

Jersey Mike's runs nearly 3,300 locations, making it the second-largest hoagie chain in the U.S. behind Subway. It is now the largest publicly traded sandwich chain in the country. Last year the company reported net income of $55 million on total revenue of $724 million. Same-store sales, a key metric for restaurant chains, rose 3% from the prior year.

The IPO priced at the midpoint of the expected range of $21 to $25 per share. The stock's debut below that price reflects a broader market that has been cautious on new listings, especially in the consumer sector. Diners are eating out less often or hunting for deals, and the restaurant industry has seen traffic and sales soften. Jersey Mike's has largely avoided that pressure, CEO Charlie Morrison told CNBC.

"We're seeing the consumer come back," Morrison said. "We've seen positive transaction growth. In fact, most of our same-store sales growth this year to date has been driven primarily by transaction growth." Morrison noted that the chain's customer base skews slightly higher income, which helped insulate it from the pullback in spending.

Jersey Mike's successful IPO is a positive signal for other consumer companies looking to go public. Rival restaurant group Inspire Brands, which owns Dunkin' and Jimmy John's, has confidentially filed for an IPO and could easily surpass Jersey Mike's fundraising record. Clothing retailer Reformation also priced its IPO on Thursday at $15 per share, the low end of its expected range, and began trading on the same day.

The chain's origin story starts in 1971, when founder Peter Cancro began working at a Jersey Shore sandwich shop at age 14. Four years later, he scraped together enough money to buy Mike's Subs. He later changed the name and began franchising. Today, franchisees operate 99.2% of Jersey Mike's locations.

In late 2024, Blackstone bought a majority stake in the company in a deal reportedly valued at around $8 billion including debt. After that transaction closed, Jersey Mike's hired Morrison as CEO. Morrison previously led Wingstop for more than a decade, including during that chicken wing chain's own IPO. He sees parallels between the two businesses.

"One of the similarities is the franchise model, generating free cash flow for investors," Morrison said. Like Wingstop, Jersey Mike's is mostly franchised, meaning the company collects royalties and fees rather than bearing the cost of operating company-owned restaurants.

Jersey Mike's plans to use the proceeds from the offering to pay down debt and for general corporate purposes. The chain is also looking to expand internationally. Nearly all of its restaurants are in the U.S., a relatively mature market for hoagies. Cancro, who still owns some equity in Jersey Mike's, signed a master franchise agreement to bring the brand to the United Kingdom and Ireland.

Longer term, the company sees the potential for 15,000 restaurants worldwide, half in the U.S. and half in international markets. Morrison said being public on the New York Stock Exchange gives the brand awareness that helps expansion.

"One of the benefits of being a publicly traded company on the New York Stock Exchange is that we get a lot of awareness of the brand, not only in the U.S., but also around the world," Morrison said.