Jersey Mike's shares close down 6% after NYSE debut, raising $1 billion in IPO

Shares of Jersey Mike's closed down about 6% during trading on Thursday afternoon after the company made its public market debut on the New York Stock Exchange under the ticker "JMKE."

The stock opened at $21 per share, below its initial public offering pricing of $23 per share, at the midpoint of the expected range of $21 to $25 per share.

Jersey Mike's sold 43.5 million shares, raising about $1 billion and valuing the company at $7.3 billion. With those proceeds, the chain is now among the largest-ever initial fundraises for a restaurant IPO.

Jersey Mike's has nearly 3,300 locations, making it the second-largest hoagie sandwich chain in the U.S. behind Subway. It's now the largest public chain in the category.

The company reported net income of $55 million on total revenue of $724 million last year. Its same-store sales increased 3% over the same period. The metric tracks sales growth at restaurants open at least a year.

Broadly, diners are eating out less often or seeking deals to save money, and the restaurant industry has seen traffic and sales soften. But Jersey Mike's has largely bucked the trend, and its high average unit volumes and asset-light franchise model made the stock attractive to investors.

CEO Charlie Morrison told CNBC that Jersey Mike's customer base typically skews "a little higher income," insulating the chain from some of the pullback in consumer spending.

"We're seeing the consumer come back," Morrison said. "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."

Jersey Mike's successful IPO is a positive harbinger for other consumer companies looking to go public. Rival restaurant company Inspire Brands, which counts Dunkin' and Jimmy John's among its brands, has confidentially filed for an initial public offering and could easily snatch Jersey Mike's title for biggest-ever restaurant IPO.

Clothing company Reformation made its public market debut on Thursday; the retailer priced shares at $15, on the low end of its expected range of $15 to $17. Its shares closed up less than 1%.

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

In late 2024, Jersey Mike's announced that Blackstone had bought a majority stake reportedly valued at around $8 billion including debt.

After the transaction closed, Jersey Mike's tapped Morrison as its chief executive. He previously led Wingstop for more than a decade, including during the chicken wing chain's own IPO.

Morrison said he sees a lot of similarities with Wingstop. Like the chicken wing chain, Jersey Mike's is mostly franchised and generates free cash flow for investors.

Jersey Mike's plans to use the proceeds from the offering to pay down debt and for general corporate purposes.

Looking ahead, the chain plans to expand its international reach.

The vast majority of its restaurants are in the U.S., a relatively mature market for hoagies. Cancro, who has retained some equity in Jersey Mike's, signed a master franchise agreement to bring Jersey Mike's to the United Kingdom and Ireland.

Long term, Jersey Mike's sees the potential for 15,000 restaurants worldwide — half in the U.S., half in international markets.

"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.