Operations

Jersey Mike's leans on 4 drivers to push AUVs toward $2M

Q3 comps rose 3%, led by traffic, as CEO Charlie Morrison lays out the chain’s plan to grow transactions.

Photo: JM

October 28, 2026

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Jersey Mike's Subs is working four levers to push its average unit volume from $1.386 million toward a long-term goal of $2 million:

Reaching more guests.
Growing digital and delivery.
Leaning on menu innovation.
Making great subs every time.

The push is showing up in its Q3 results; same-store sales rose 3%, up from 2.3% in the second quarter, driven primarily by transaction growth. AUV was up from $1.365 million a year earlier, according to CEO Charlier Morrison, who told investors that systemwide sales rose 11% to $1.2 billion for the quarter ended Sept. 27, and total revenue increased 10% to $209 million.

"Our same-store sales accelerated sequentially in the third quarter, with growth continuing to be driven by transactions for the third consecutive quarter," he said during Wednesday's call with investors.

Adjusted EBITDA climbed 20% to $125 million. Net income fell to $10 million from $32 million a year earlier, which the company attributed largely to a $29 million one-time, non-cash, equity-based compensation charge tied to its IPO, along with IPO-related professional expenses. The chainwent public on July 31.

Shares are up

Shares of Jersey Mike's rose roughly 5% to 7% in early trading Wednesday after the earnings release, trading at about $17.85 to $18.01, according to Investing.com.

Morrison walked through each of the four drivers during Wednesday's earnings call. All of them center on growing transactions.

1. Broaden the customer base

Jersey Mike's already has more than 90% brand awareness, Morrison said, but sees room to turn more of that into visits.

"While the brand enjoys more than 90% awareness, we see a significant opportunity to convert that awareness into more new customers and driving more frequent visits," he said.

Before 2026, digital marketing made up less than 1% of the brand's ad spend, which tops $200 million a year. This year it's about 20%, spread across paid social, search and connected TV. Morrison said purchase consideration has improved among 18- to 34-year-olds, women and Hispanic consumers, and loyalty registrations are up 21% year to date.

The loyalty program still has room to grow, however. The app database has about 14 million users, 7 million to 8 million of them active, which Morrison called "very undersized" compared with other brands. Active members visit about once a month. Everyone else visits as little as twice a year

2. Grow digital and delivery

Digital sales mix rose about 100 basis points to 43% during the quarter, and the long-term target is 60% to 70%. Morrison called delivery one of the brand's fastest-growing channels, helped by a change last year that gives franchise owners a royalty-free markup on delivery orders.

Catering is a big piece of that push. Catering sales are up 17% year to date. The channel has historically made up about 3% of sales, has now topped 4% and could reach 10% over time, Morrison said. Much of that business is prepped in the morning before stores open.

"Our product is designed for catering, and to be only at 3% a year ago is a little disappointing," he said.

3. Lean on menu innovation

The Summer Chicken Salad limited-time offer brought in new guests, and the recently relaunched Mike's Hot Italian is posting a sales mix similar to its first run earlier this year. During that first run, which stretched from late December through February, about half of the guests who bought the sandwich were new to the brand, Morrison said.

In October, Jersey Mike's also added a $7.99 bundle of any mini sub and chips, available only through digital channels. Morrison said the price point is margin-friendly for franchise owners. The brand expects to run two to three LTOs in 2027.

4. Make great subs every time

"Customers come to Jersey Mike's for a true Jersey-style deli experience where we slice our meats and cheese fresh in front of them and consistently deliver the personalized service they have come to know," Morrison said.

Development and outlook

Jersey Mike's opened 80 stores during the third quarter, bringing year-to-date openings to 210, and ended the period with 3,456 locations, including 3,415 in the U.S. Net store growth was 8.8% year over year. Morrison said this year's new stores are generating higher AUVs than last year's class did at the same point.

On the development side, Jersey Mike's had 41 stores in Canada at quarter's end, 20 of them opened this year, and expects to open its first U.K. location in the next few weeks. Domestically, the company has identified more than 1,600 trade areas for new stores, which Morrison said gives it roughly five years of line of sight, with build costs of just over $500,000 per store.

For the full year, the company expects same-store sales growth of at least 2.5%, net unit growth of at least 8% and adjusted EBITDA growth of at least 20%. Its board also approved a share repurchase of up to $100 million and a special dividend of 35 cents per Class A share, payable Nov. 19 to shareholders of record as of Nov. 5.
Founded in 1956 as Mike's Subs in Point Pleasant, N.J., Jersey Mike's has more than 3,400 locations across the U.S. and Canada. Nearly all are franchised; 22 were company-owned at the end of the quarter.

The company will share its 2027 outlook when it reports fourth-quarter results.