Jersey Mike’s Subs (JMKE) Q2 2026 Financial Results Summary
QuoteReporter
Jersey Mike’s Subs Inc. (JMKE) Q2 2026: Revenue Growth but Declining Net Income — Cautiously Optimistic
Jersey Mike’s Subs Inc. (NYSE: JMKE) reported its fiscal second quarter results for the period ending June 28, 2026, revealing a mixed performance. Total revenue increased by $19 million, or +10% year over year, reaching $208 million. However, net income fell to $37 million, down $22 million, or -37% from $59 million in the prior year.
This quarter presents a somewhat disappointing outcome for shareholders, primarily due to the significant decline in net income despite revenue growth. The drop in net income can be attributed to higher interest expenses and non-routine costs, which overshadowed the positive revenue trajectory.
Key Financial Metrics:
- Total Revenue: $208 million, up $19 million or +10% YoY
- Net Income: $37 million, down $22 million or -37% YoY
- Adjusted EBITDA: $114 million, up $7 million or +7% YoY
- Same-store Sales Growth: 2.3%, down from 3.6% YoY
- Digital Sales Mix: 43%, up from 41% YoY
- New Store Openings: 83 stores, up from 73 YoY
- Net Unit Growth: 8.1%, down from 10.0% YoY
The increase in total revenue aligns with systemwide sales growth of 10%, which reached $1.210 billion. This growth was primarily driven by the opening of 83 new stores, contributing to a net unit growth of 8.1%. However, the same-store sales growth of 2.3% indicates a slowdown compared to the previous year’s 3.6%, suggesting that while new store openings are beneficial, existing stores are not performing as strongly.
Dividend and Share Buyback:
There were no announcements regarding dividends or share buybacks in this quarter's report, which may be a point of concern for investors looking for returns on their investments.
Guidance and Outlook:
Looking ahead, Jersey Mike’s provided a full-year fiscal 2026 outlook that includes:
- Same-store Sales Growth: Expected to be between 2.5% and 3.0%, with a target of 3.0% to 4.0% for the third quarter.
- Net Unit Growth: Projected to be at least 8%.
- Adjusted EBITDA Growth: Anticipated to grow by at least 20%, with a minimum of 13% growth in the third quarter.
Analyst View:
While the revenue growth is a positive sign, the significant drop in net income raises concerns about the company's cost management and operational efficiency. The increase in digital sales mix to 43% is encouraging, indicating that the company is successfully adapting to changing consumer preferences. However, the decline in same-store sales growth suggests that Jersey Mike’s may need to enhance its customer engagement strategies to drive traffic in existing locations.
Investors should closely monitor the company's performance in the upcoming quarter, particularly the execution of its growth strategies and the impact of rising costs on profitability. The guidance for the third quarter will be critical in assessing whether Jersey Mike’s can regain momentum in same-store sales and improve net income.
Forward Catalyst:
Investors should watch for the third quarter results, particularly the same-store sales growth and adjusted EBITDA figures, as these will provide insight into the effectiveness of Jersey Mike’s strategies to enhance customer engagement and operational efficiency. Additionally, any updates on new store openings and digital sales initiatives will be key indicators of the company's growth trajectory moving forward.
Note: The following tables are in millions.
| Period from January 16 to June 28, 2026 | Period from January 1 to June 29, 2025 | |
|---|---|---|
| Revenues | ||
| Royalties and other revenues | $138 | $124 |
| Advertising revenues | $57 | $54 |
| Common stock sales | $13 | $11 |
| Total revenues | $208 | $189 |
| Operating expenses | ||
| General and administrative expenses | $66 | $34 |
| Advertising expenses | $54 | $41 |
| Depreciation and amortization | $25 | $25 |
| Common stock expenses | $11 | $8 |
| Total operating expenses | $156 | $108 |
| Gain on sale of common stock | $14 | $— |
| Operating income | $66 | $81 |
| Interest expense | $29 | $22 |
| Loss on debt extinguishment | $— | $— |
| Income (loss) before income tax expense | $37 | $59 |
| Income tax expense | $— | $— |
| Net income (loss) | $37 | $59 |
Note: The following table is in millions.
| Period from January 16 to June 28, 2026 | Period from January 1 to June 29, 2025 | |
|---|---|---|
| Cash flows from operating activities | ||
| Net income (loss) | $37 | $59 |
| Depreciation and amortization | $25 | $25 |
| Change in operating assets and liabilities | $-41 | $-57 |
| Payment of liabilities | $— | $-411 |
| Other net | $-2 | $5 |
| Net cash provided by operating activities | $19 | $32 |
| Cash flows from investing activities | ||
| Capital expenditures | $-3 | $-5 |
| Net proceeds from sale of stock | $18 | $— |
| Other net | $1 | $1 |
| Net cash provided by investing activities | $16 | $-4 |
| Cash flows from financing activities | ||
| Proceeds from issuance of securities | $— | $— |
| Payment on long-term debt | $-5 | $-4 |
| Debt issuance costs | $— | $-15 |
| Member distributions | $-41 | $-104 |
| Net cash provided by financing activities | $-46 | $-108 |
| Net increase (decrease) in cash and cash equivalents | $-11 | $-80 |
| Cash and cash equivalents and restricted cash at beginning of year | $276 | $227 |
| Cash and cash equivalents and restricted cash at end of period | $265 | $147 |
Disclaimer
The content on MarketsFN.com is provided for educational and informational purposes only. It does not constitute financial advice, investment recommendations, or trading guidance. All investments carry risk and past performance does not guarantee future results. You are solely responsible for your investment decisions and should conduct independent research and consult a qualified financial advisor before acting. MarketsFN.com and its authors are not liable for any losses or damages arising from the use of this information.