Key Points
Blackstone, which bought a majority of Jersey Mike's last year, has been pointing at an IPO.
CEO Charlie Morrison brought big profits to shareholders when he took Wingstop public.
There may soon be a new entry in the list of restaurant stocks. Sandwich chain Jersey Mike's disclosed this week that it confidentially filed for an initial public offering, the first step toward going public.
The company, which traces its roots to a modest sandwich shop on the Jersey Shore, is a significant player in a crowded field of submarine sandwich restaurants, which includes Subway, Jimmy John's, Firehouse Subs, and Potbelly. Jersey Mike's has more than 3,000 locations, making it the second-largest submarine sandwich chain in the U.S. behind Subway.
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A confidential IPO means that the company's S-1 and related documentation were filed with the Securities and Exchange Commission, but haven't been made public yet. That gives Jersey Mike's an opportunity to discuss the filing privately with regulators before it goes public, and make changes as needed before the shares are listed for public trading. And it also allows Jersey Mike's to back out of the deal should market conditions deteriorate.
However, Jersey Mike's has clearly been working toward this moment for a while. Blackstone purchased a majority of the company last year in a deal valuing Jersey Mike's at about $8 billion. And Blackstone brought in former Wingstop CEO Charlie Morrison to run the company. Morrison was with Wingstop when that restaurant chain went public in 2015. Wingstop's performance over the last decade has been phenomenal, with a 700% return that soundly beats both the S&P 500 and major fast-food chains like McDonald's and Wendy's.
Can Morrison bring that same magic to a Jersey Mike's IPO? That's the question that investors need to solve.
A look at Jersey Mike's before its IPO
Jersey Mike's has been a solid business with a great backstory. Founder Peter Cancro started working at a Point Pleasant, New Jersey, sandwich shop called Mike's Subs as a teenager in the 1970s. He bought the restaurant in 1975, when he was just 17, and eventually changed the name and sold franchises.
The chain reported revenue of $309.8 million in 2025, up 10.6% from a year ago. But net income was $183.6 million, down 23.1% from 2024. By way of comparison, Firehouse Subs, a segment of Restaurant Brands International(NYSE: QSR), reported sales growth of 8.6% to $232 million in 2025, but comparable sales growth was only 1.1% because the company increased its restaurant count from 1,345 to 1,449. Operating income rose from $48 million to $56 million.
Image source: Getty Images.
As Jersey Mike's goes public and more financial records are released, investors should be looking closely at comparable sales -- it's easy to increase revenues when you are rapidly opening stores. True profits from restaurant stocks come from the company's ability to increase same-store sales, because the higher costs of opening new locations don't offset those gains.
Is Jersey Mike's a good investment?
Restaurant and fast food stocks can be very challenging. Customers are more aware than ever of spiraling food costs, which forces restaurants to heavily discount and create new promotions to attract customers. And when the economy is a little shaky, amid fears of inflation and global conflict that roil the market, customers are more hesitant to spend on discretionary items like dining out. In the last year, the S&P 500 restaurant sector has been flat, while the broader index is up more than 38%.
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So, an investment in Jersey Mike's IPO falls more on a bet on its CEO. Can Morrison, who led Wingstop to greater heights and a successful IPO a decade ago, find that magic again in a crowded sandwich field?
The S-1 filing, when it comes out, will have some of those answers. But even after Jersey Mike's completes its IPO, I'm holding off on this company until I see a consistent strategy for increasing same-store sales and generating profits, in addition to rising revenue.
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Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool recommends Restaurant Brands International and Wingstop and recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.
