Jersey Mike's Subs (JMKE) investor relations material

Executive summary

• Q3 systemwide sales rose 11% YoY to $1.204B, revenue rose 10% to $209M, and same-store sales grew 3.0%, primarily on transactions.

• Adjusted EBITDA increased 20% to $125M; net income fell 69% to $10M, reflecting IPO-related costs, taxes and debt charges.

• The 3,456-store system was 99% franchised; digital sales mix reached 43%.

• Strategy targets $2M AUVs, stronger franchisee four-wall returns and domestic and international growth.

Financial highlights

• Royalties and other revenue rose 12% to $143M; advertising revenue increased 8% to $57M; owned-store sales were $9M.

• Adjusted net income was $74M and adjusted EPS was $0.23; both were introduced this quarter.

• Adjusted EBITDA growth included $9M of lower expenses tied to the prior Area Director program.

• Q3 G&A rose 61% to $87M, including higher equity compensation and IPO costs; advertising expense was $46M.

• YTD free cash flow was $170M after $88M in large special items and $258M before those items.

Outlook and guidance

• FY2026 guidance calls for same-store sales growth of at least 2.5%, net unit growth of at least 8% and adjusted EBITDA growth of at least 20%.

• Long-term targets are low-single-digit same-store sales growth and high-single-digit unit growth, driving double-digit EBITDA growth.

• Q4 net interest expense is expected to be $25M; FY advertising expenses are expected to exceed advertising revenues by $5M.

• Two to three limited-time offers are planned for 2027; from 2027 onward, full-year advertising expenses are expected to equal advertising revenues.

• Existing cash, operating cash flow and $72M of available VFN capacity are expected to cover anticipated cash needs for at least 12 months.