JMKE

- Interested in Brunswick Corporation? Here are five stocks we like better. - Brunswick's third-quarter results exceeded expectations: Sales rose 7% to $1.5 billion, adjusted EPS increased 63% to $1.58, operating margin expanded to 10.1%, and free cash flow reached $140 million. - The company maintained its full-year revenue guidance of $5.7 billion to $5.8 billion but raised adjusted EPS guidance to approximately $4.65, citing stronger margins, premium product mix, productivity gains and higher-margin Engine Parts & Accessories sales. - All reporting segments posted sales growth, while Brunswick continued share repurchases and debt reduction. CEO David Foulkes will retire at year-end, with Navico President and Chief Technology Officer Áine Denari set to become CEO on Jan. 1. - Jersey Mike's Serves Fresh Gains After IPO Stumble Brunswick (NYSE:BC) reported third-quarter 2026 results that exceeded its expectations, with sales rising across all reporting segments for a fifth consecutive quarter and adjusted earnings per share increasing 63% from a year earlier. Net sales increased 7% to $1.5 billion, while adjusted operating earnings per share reached $1.58. Adjusted operating margin expanded 230 basis points to 10.1%. The company generated $140 million in free cash flow during the quarter, up $29 million from the prior-year period. → Apple's Foldable iPhone Sold Out in Minutes, But Wall Street Has Questions - AST SpaceMobile Gets FCC Green Light for Direct-to-Device Service After Launch Setback Chairman and CEO David Foulkes said the results reflected solid execution, higher sales, favorable product mix, operating efficiencies and the anniversary of prior-year tariff impacts. He said Brunswick's premium and core offerings remained resilient despite pressure on consumer confidence and discretionary spending among value-oriented consumers. "Our premium and core focus portfolio continues to be resilient and perform ahead of overall year-to-date SSI data," Foulkes said. Brunswick said its U.S. retail performance was in line with the industry when adjusted for discontinued value models. → Coca-Cola Stock Is Everything AI Isn't—And That's Its Biggest Strength - AST SpaceMobile Drops 15% After Blue Origin Satellite Mishap Brunswick maintained its full-year revenue guidance of $5.7 billion to $5.8 billion and adjusted operating margin guidance of approximately 8%. However, the company raised its full-year adjusted EPS outlook to approximately $4.65, from a prior midpoint of $4.55. The new EPS outlook is about 13% above Brunswick's initial 2026 guidance midpoint of $4.10 and more than 42% above 2025 adjusted EPS of $3.27, according to Foulkes. → Heavy Metal: Why Nucor Could Be an Overlooked AI Infrastructure Winner Chief Financial Officer and Chief Strategy Officer Ryan Gwillim said the company's third-quarter outperformance was driven largely by stronger gross margins, premium product mix, higher-margin Engine Parts & Accessories sales, improved productivity and a somewhat better tax rate. Management said the fourth-quarter outlook includes caution around incremental material inflation, off-season channel stocking, the timing of tariff-related refunds, and continued economic, political and trade uncertainty. Gwillim said the principal change in the company's fourth-quarter outlook from its July expectations was material inflation, while commercial and ordering trends have remained generally consistent with expectations. Brunswick maintained its estimate of approximately $40 million in net incremental tariff costs for 2026. The company recognized about $3 million in gross IEEPA refunds during the third quarter and about $33 million year to date. It expects total gross IEEPA refunds of $60 million to $70 million, with most of the remaining balance expected in 2027. - Propulsion: Sales rose 7%, including a 7% increase in outboard engine sales and a 9% increase in controls, rigging and propellers. Adjusted operating earnings increased 51%, while margin expanded 350 basis points to 12%. Brunswick said higher volumes, favorable mix, improved absorption and reduced year-over-year tariff pressure outweighed product-development investment and inflation. - Engine Parts & Accessories: Sales increased 5%, supported by boating participation, distribution share gains and broad-based regional growth. Adjusted operating margin increased 190 basis points to 24.6%, which Foulkes described as among the segment's highest margins on record. Land 'N' Sea's rolling 12-month distribution share increased 120 basis points. - Navico Group: Sales grew 6%, with all three business lines contributing and marine OEM sales recording double-digit growth. Adjusted operating margin rose 140 basis points to 6.1%, aided by higher sales, footprint consolidation and SKU rationalization. The company said Navico's second phase of Ensenada capacity came online in early October. - Boat segment: Sales advanced 9%, led by a 30% increase in saltwater fishing, a 13% increase in aluminum freshwater, and 14% growth in the Business Acceleration portfolio. Segment adjusted operating earnings doubled, and adjusted operating margin expanded 160 basis points to 3.6%. Brunswick said global boat pipelines declined by about 900 units year over year, including a reduction of approximately 700 units in the U.S. U.S. outboard engine pipelines were down 3% from a year earlier. Management described dealer and OEM sentiment as stable but cautious, noting that most dealer partners have more than half of their credit capacity available. The company retained a 46% U.S. outboard retail share and reported wholesale share gains, including repower gains. Foulkes said Mercury achieved 67% overall outboard share at the Cannes boat show and 82% share at the show's Vieux Port location, which features larger premium boats. Management said fuel prices have not materially reduced boating participation based on the company's internal measures. Freedom Boat Club member trips increased 3% year to date, while the business captured an estimated 69% of the North American boat-club market, up 4 percentage points. Freedom Boat Club represented roughly 13% of Boat segment sales during the quarter. Foulkes said Brunswick is testing programs that allow members to apply a portion of their Freedom entrance fee toward boat ownership, though he said most members appear comfortable with the club model. On pricing, Foulkes said Brunswick took moderate boat pricing during 2026, generally in the 3% to 4% range across product lines, and recently implemented a "couple of points" of pricing on outboard engines. He said the company expects similar moderate pricing actions next year, while Gwillim noted that changes in average selling prices also reflect a shift toward premium products and away from value offerings. Brunswick repurchased $75 million of shares year to date and retired $100 million of debt. The company increased its full-year share-repurchase target to more than $80 million and said it remains on track to meet or exceed its $160 million debt-reduction target for the year. The company also reiterated plans for a leadership transition. Áine Denari, currently president of Navico Group and Brunswick's chief technology officer, will become CEO effective Jan. 1. Foulkes said he will work with Denari through year-end before retiring from the CEO role. Foulkes said Brunswick's strategy, capital-allocation priorities and long-term Investor Day targets remain unchanged. In discussing 2027, management pointed to continued pipeline rebalancing, new Mercury outboard launches, distribution and repower share gains, Navico product introductions, and expected cost benefits from Boat Group facility consolidations. Brunswick Corporation (NYSE:BC) is a marine recreation company that designs, manufactures and distributes products used in boating and related recreational activities. Its portfolio includes marine propulsion systems, boats, engines, electronics, boat control systems and other components, as well as parts and accessories. The company's marine businesses include Mercury Marine, which produces outboard, sterndrive and inboard engines, and a range of boat brands such as Boston Whaler, Sea Ray, Bayliner, Lund, Harris and Princecraft. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Brunswick Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Jersey Mike's Subs (JMKE) hit the spotlight after third quarter results showed revenue of US$209 million and a net loss of US$11 million, alongside a fresh US$100 million buyback and a US$0.35 special dividend. The earnings update and capital return announcements have arrived after a tough stretch for Jersey Mike's Subs, with the share price down 19.4% year to date but showing a 4.6% 1 month share price return that hints at momentum stabilising after the post IPO slide. Scan how Jersey Mike's Subs compares to other consumer-facing stocks showing recalibrating sentiment and recent share price pressure in our hand picked 26 high quality undervalued stocks. Bulls see Jersey Mike's Subs using digital traction and fresh capital returns to reset the story. Bears point to the fresh quarterly loss and post IPO slide. Which side does the valuation actually support? Valuation for Jersey Mike's Subs is pulling investors in two directions. The stock trades at a P/E of 101.7x, while the SWS DCF model suggests a future cash flow value of $34.42 against a last close of $17.43. A P/E ratio measures how much investors are paying today for each dollar of current earnings. For a restaurant franchisor like Jersey Mike's Subs, this often reflects how strongly the market is pricing in future profitability and the potential to scale its store base and digital channels. Here, the picture is mixed. The P/E of 101.7x sits well above the peer average of 44.1x and the US Hospitality industry average of 20.3x. This points to an expensive earnings multiple. At the same time, the SWS DCF model signals the shares are trading below an estimated future cash flow value of $34.42, which implies the current price does not fully reflect those projected cash streams. In this context, investors are weighing a high earnings multiple against a DCF output that indicates undervaluation on a cash flow basis, without a fair ratio reference point to anchor where the P/E might settle over time. See what the numbers say about this price — find out in our valuation breakdown. Result: Preferred multiple of P/E 101.7x (OVERVALUED) Still, the recent quarterly loss and the 19.4% year-to-date share price decline leave Jersey Mike's Subs vulnerable to any setback in execution or sentiment. Find out about the key risks to this Jersey Mike's Subs narrative. The first lens makes Jersey Mike's Subs look expensive on a 101.7x P/E, yet the SWS DCF model tells a very different story. On that cash flow view, an estimated value of $34.42 against a $17.43 share price screens as undervalued. Which signal do you treat as more reliable? Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Jersey Mike's Subs for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 26 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. Sentiment around Jersey Mike's Subs is split, and the numbers only sharpen that debate. Act while the data is fresh and build your own view by checking the 3 key rewards If Jersey Mike's Subs has sharpened your focus on valuation and risk, do not stop here. Broaden your watchlist today and avoid missing opportunities elsewhere. - Target fresh angles on quality by scanning a list of solid balance sheet and fundamentals (24 results) that can help you focus on businesses with sturdier financial footing. - Hunt for potential mispricings by reviewing a curated 19 high quality undiscovered gems before others start paying attention to the same stories. - Prioritise resilience in choppy markets by checking a 32 resilient stocks with low risk scores that filters for companies with more measured risk profiles. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include JMKE. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wed, Oct. 28, 2026 - SVP, Finance and Investor Relations - Corey Horsch - Chief Executive Officer - Charles Morrison - Chief Financial Officer - Michele Allen Operator: Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Jersey Mike's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded today, October 28, 2026. And now I would like to turn the conference over to Corey Horsch, SVP, Finance and Investor Relations. Corey Horsch: Thank you, operator, and good morning. By now, everyone should have had access to our third quarter 2026 earnings release, which can be found at www.jerseymikes.com in the Investor Relations section. Our discussion today includes forward-looking statements. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties that could cause our actual results to differ materially from what we currently expect. Our SEC filings describe various risks that could affect our future operating results and financial condition. We use certain non-GAAP financial measures that we believe can be useful in evaluating our performance. Presentation of such information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. Definitions of these non-GAAP financial measures and reconciliations to comparable GAAP measures are contained in our earnings release. Now I would like to turn it over to our CEO, Charlie Morrison. Charles Morrison: Thank you, Corey. Good morning, everyone, and welcome to our third quarter conference call. I will be providing an update on our progress against our growth strategy then Michele will review our quarterly financial results and our outlook for 2026. Our third quarter same-store sales demonstrate continued progress against our long-term objective of achieving $2 million average unit volumes, driven primarily by transaction growth, same-store sales grew 3%, accelerating from 2.3% in the second quarter. We continue to outperform the fast casual segment this year, reflecting the strength of our brand and the value we deliver through the quality, portion size and service our customers count on. Our focus remains on building long-term sustainable traffic growth by giving a broader set of consumers, compelling reasons to choose Jersey Mike's and to visit more often. We believe that approach positions us well in an environment where consumers are increasingly deliberate about where they spend. We remain confident in our full year outlook and committed to our long-term growth strategy of achieving $2 million average unit volumes, while growing 4-wall cash-on-cash returns for our franchise partners and expanding our footprint domestically and around the world. There are 4 key drivers to our AUV strategy, each centered around growing transactions. The first is broadening our customer base and driving more frequency amongst the broader set of consumers; second, increasing sales for our digital and delivery channels. Next, leveraging menu innovation, and finally, never losing focus on continuing to make great subs each and every time. 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. We are seeing encouraging results from increasing our digital marketing spend from less than 1% of our media mix to approximately 20% this year. Year-to-date, purchase consideration has improved significantly among younger consumers in the 18- to 34-year-old range as well as women and Hispanic consumers. Loyalty registrations are also up 21% year-to-date, far outpacing our rate of growth. And while we have already shifted the spend to what we believe is an appropriate level, we are in the very early stages of optimizing our mix within channels and speaking to and acquiring a broader mix of consumers. We believe this provides a substantial opportunity to support traffic growth for years to come. Expanding our customer base works hand in hand with growing digital and delivery mix. Channels that are particularly relevant to the younger consumers that we are targeting. During the quarter, digital sales mix increased approximately 100 basis points to 43%, progressing towards our long-term target of 60% to 70%. Separately, catering sales have increased 17% year-to-date, reflecting our focus on driving this high-margin channel and leveraging the morning day part to prepare large orders. We also see meaningful opportunity in first-party delivery or those sales that come direct through our channels. As we continue to capture data about our customers and build our first-party marketing capabilities, we expect to use more targeted engagement to drive adoption and repeat orders through our digital channel. Menu innovation gives existing customers another reason to visit and we believe, has strong appeal to new customers to the brand. Our summer chicken salad limited time offer was highly successful in attracting new guests and help drive our strong performance. We recently relaunched Mike's Hot Italian, and it is generating similar sales mix as we experienced in the first quarter of this year. In October, we also introduced a new bundle featuring any mini sub and chips for a $7.99 price point. This mini bundle provides an accessible price point while delivering attractive food costs for our franchise owners. Two weeks into the promotion, we are pleased with the performance and customers appreciate the value that it provides. Our pipeline of new products and attractive offers allow us to provide customers additional value while preserving our premium positioning, while not impacting our unit economics. Looking ahead, we anticipate 2 to 3 LTOs in 2027. Underpinning all of these efforts is our commitment to making 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. Delivering that experience at every visit gives customers a reason to return and remains a core tenet to our strategy for continued transaction growth. Turning to development. In the third quarter, we opened 80 new stores, bringing year-to-date openings to 210 and ending the quarter with 3,456 stores across the system, representing approximately 9% net unit growth year-over-year. Importantly, we continue to expand while sustaining strong unit economics. Moreover, our 2026 openings are generating higher AUVs than our 2025 openings through the same point last year and our new store openings continue to deliver strong cash-on-cash returns for our franchise owners. These strong economics continue to drive significant demand for new development. As a reminder, we have line of sight to roughly 5 years of domestic development ahead. Turning to international development. We ended the quarter with 41 stores in Canada including 20 new openings year-to-date. We also expect to open our first location in the United Kingdom over the next few weeks and are excited to bring Jersey Mike's across the pond. International expansion will become an increasingly important contributor to our growth story over time. We have identified a number of priority markets and expect to announce additional markets and international partners in the coming months. Our new market expansion will be highly disciplined with a focus on selecting the right partner, establishing strong unit economics and building brand awareness to support sustainable growth in each market. Overall, we have high confidence that our runway for unit growth, both here in the U.S. and across the world remains for many years to come. Overall, we believe the opportunity in front of us is substantial and truly unique in our space. Jersey Mike's has a proven model with compelling unit economics, substantial white space for global expansion and meaningful opportunities to grow AUVs across the system. We are confident in our ability to execute our growth strategies and create significant long-term value for our franchise owners, team members and our shareholders. Lastly, I'd like to thank our team members and franchise owners for their exceptional dedication to Jersey Mike's. Their commitment has been instrumental in building the success we enjoy today and their continued focus and passion are what makes us so optimistic about the brand's future. With that, I'll turn it over to Michele. Michele Allen: Thanks, Charlie, and good morning, everyone. In the third quarter, we generated $1.2 billion of system-wide sales, an increased of 11% year-over-year, primarily reflecting 9% net unit growth and 3% same-store sales growth, which, as Charlie mentioned, was an acceleration from 2.3% in the second quarter and importantly, led primarily by transaction growth. We're very pleased to be delivering positive transaction growth, while traffic across the industry remains challenged. That growth reflects the success of our digital marketing initiatives, and we're still in the early innings. Total revenues grew 10% to $209 million and adjusted EBITDA grew 20% to $125 million, both reflecting a 12% increase in royalties and other revenue. Adjusted EBITDA further benefited from our transition from the Area Director model to an internally staffed support model, which contributed $9 million year-over-year. In the third quarter, advertising revenues exceeded advertising expenses by $11 million compared to $8 million in the prior year third quarter. Moving down the income statement. Adjusted net income was $74 million and adjusted earnings per share were $0.23. These are new metrics being introduced this quarter and have not been presented for the prior year period because our pre-IPO capital structure makes the comparison not meaningful. Adjusted net income reflects the same adjustments used in adjusted EBITDA as well as the noncash amortization of acquired intangibles. We're also applying a non-GAAP tax rate of 25% to derive adjusted net income, which we believe is representative of a normalized long-term tax rate for our business. That rate does not currently reflect the portion of realized tax savings we retain under the tax receivable agreement, which could provide a modest benefit and will continue to be refined over time. Adjusted EPS further assumes the exchange of all outstanding common units for Class A common stock. We generated $170 million in free cash flow through the third quarter which included $88 million in large special items, including Area Director buyouts. Further, at only $7 million year-to-date, CapEx as a percent of adjusted EBITDA is running at roughly 2%. Turning to the balance sheet. At the end of the quarter, we had approximately $1.5 billion of net debt, including $325 million of cash, and our net leverage ratio was 3.9x. As announced today, our Board of Directors authorized a share repurchase plan of up to $100 million and a special cash dividend of $0.35 per Class A share to shareholders of record as of November 5. This represents approximately $200 million of capital return less than 4 months following our IPO or approximately half a turn of our full year adjusted EBITDA expectations, while maintaining an efficient leverage profile and ample liquidity to run the business. We chose to use both tools deliberately. The repurchase authorization reflects our view that our shares represent a compelling value at current levels, and the special dividend allows us to return capital to all shareholders while maintaining a healthy public float in our Class A common stock. Now moving to outlook. We expect same-store sales growth of at least 2.5% for the full year. We continue to expect net unit growth of at least 8% and adjusted EBITDA growth of at least 20%. Our fully exchanged diluted share count is expected to be approximately 318 million. We also expect that advertising expenses will exceed revenues by $5 million for the full year. As we look to 2027 and beyond, our expectation remains that expenses will approximately equal advertising revenues on a full year basis with some variability quarter-to-quarter due to the timing of media. Lastly, our outlook for Q4 net interest expense is approximately $25 million. As a reminder, we expect adjusted EBITDA growth to outpace revenue growth over the long term with G&A shrinking as a percentage of system-wide sales. This year, however, there are a number of moving parts as we complete the transition to a corporate-led organization. Most notably, we're benefiting from the shift away from the Area Director model. At the same time, we've added expenses to support our new public company infrastructure. On balance, the net impact is a onetime step down in our G&A cost base, which is pushing our EBITDA growth rate meaningfully above our long-term growth algorithm of double-digit growth. Our third quarter performance demonstrates the strength of our brand and the continued progress against our long-term growth strategy of achieving $2 million AUVs, growing 4-wall returns for our franchise partners and expanding our footprint domestically and around the world. We remain confident in our long-term algorithm. Low single-digit same-store sales growth and high single-digit net unit growth combined to drive double-digit EBITDA growth. Our asset-light model converts a substantial portion of that adjusted EBITDA into free cash flow, which gives us significant flexibility to return capital to shareholders over time. We believe the compounding effect of that earnings growth and the deployment of that cash will drive significant long-term value for our shareholders. We look forward to updating you on our progress and outlook for 2027 when we report fourth quarter results. With that, operator, we can open the lines for questions. Operator: [Operator Instructions] Our first question comes from David Palmer with Evercore ISI. David Palmer: Thanks. Good morning. I had a question, and thanks for your earlier comments on the digital front. I wanted to see if you could give us some more texture about what you're expecting there from the lift in digital. That's the kind of thing that you can do A/B testing on and really give yourself a sense of what the lift can be, particularly as you get certain functionality rolled out. And on that front, we'd love to understand maybe the milestones on when those capabilities rise. So anything on that front would be very helpful since that's so important to our view in '27? Charles Morrison: Thanks. Appreciate the question. As we noted previously, before 2026, the company really had no investment in digital marketing efforts of any kind. In fact, it was less than 1% of our total ad spend, which exceeds $200 million annually. This year, we deployed about 20% -- just about 20% of our advertising fund towards digital marketing efforts and paid social search, connected TV and the like. As we noted, early indications are quite strong. We're seeing heightened levels of engagement amongst a younger audience and a broader, more diverse audience as well. And all of those are good indicators that we believe over the long term, this digital marketing effort is going to continue to drive strong transaction growth for the company well into the future. As we've noted before, we're in the very early innings of this effort and believe we have a long way to go as we start to acquire more first-party data about our customers and continue to expand that database in a one-to-one marketing effort that we think will drive growth for a long time to come. David Palmer: Is there a time that you think you'll be fully operational on what you would call the hyper personalized marketing capabilities? Is there a quarter where you see that being available? And I'll pass it on. Charles Morrison: Well, I think it's continuing to evolve as we go. As we've mentioned before, we have a very strong loyalty program, but it's relatively small in size compared to other brands in our space. We have about 14 million total users in the database, of which about 7 million to 8 million of those are active users. That is very undersized compared to a lot of other brands, yet we're seeing a lot of strong growth in that loyalty program. In fact, we've seen sign-ups this year be up as much as 20% year-over-year, which is good news and an indication that we're bringing those new customers into the database. When they do, then over time, we expect their frequency to be stronger. In fact, our active database of customers uses us about once a month. People who are not part of our active database or use Jersey Mike's tend to be less than that. As little as 2x a year. And so as we convert more and more people into that database over time, we expect to see strong performance gains from it. But it's going to take us some time. We're building the infrastructure. We're compiling the data. We're getting smarter about it every day, but I think it will be a reasonably long journey over the course of maybe the next few quarters before we start to see even the meaningful impact associated with that. Operator: Our next question comes from Chris O'Cull with Baird. Christopher O'Cull: Charlie, the updated guidance implies, I think, at least 3% comps in the fourth quarter. Are you tracking at that level today? Is there some cushion in the outlook? And I guess, what gives you confidence in that target? Charles Morrison: Chris, thanks for the question. Despite what all of the industry saw as some temporary softness late in the third quarter, we feel very good about our performance in the fourth quarter and beyond. And we think that, that particular event was fairly short-lived. And our performance has been very consistent with what we're providing as our fourth quarter guidance overall. So we feel very good about our recent performance and continue to gain on traffic. And I think it's important to note that our gains are primarily driven by traffic, both during the third quarter and year-to-date and anticipate that continuing in the fourth quarter. Christopher O'Cull: Okay. And then how will national media support in the fourth quarter compared with the third quarter? And should we expect maybe social media spending to stay relatively steady each quarter? Charles Morrison: Yes. The digital spend is fairly consistent throughout the year, and that involves social spend as well as some other connected forms of media. Definitely, the fourth quarter, we see an uptick in our media spend, where we're involved and engaged in the NFL football baseball playoffs recently and other areas where we spend our TV media dollars. So this is a heightened level of media compared to where we were in the third quarter. Operator: Our next question comes from Brian Harbour with Morgan Stanley. Brian Harbour: Just with Mike's Hot Italian, did it perform largely kind of as you expected? I guess, how did that -- the timing was a little bit different this time, but how did it differ with respect to marketing and messaging. And I guess the broader question is just how do you kind of make sure that these LTOs build on each other over time? Charles Morrison: Thanks, Brian. It did actually and it is performing consistent with what we experienced earlier in the year. As a reminder, we launched this to the market in a short window late in December of last year through essentially February, and we saw really strong performance from that. Notably, about 50% of the customers that use -- that bought that product were new to the business. So net new customers, which we're thrilled with. Mix levels and performance have been very consistent with that throughout the launch period since. And we always anticipated that would be our fourth quarter hero product. Coming off the heels of a very successful chicken salad promotion over the summer months. And so I think LTOs probably 2 to 3 a year at the most, will be our ongoing cadence and we are developing a pipeline of relevant products that we are testing and gaining understanding on so that when we hit the market, we have confidence in their ability to perform at these levels. Brian Harbour: Okay. How is the delivery channel doing today? I guess, is that growing faster than the overall business? Or is it consistent? And how do you think about that as an ongoing sales driver into next year, for example? Charles Morrison: Yes. Actually, delivery is one of our fastest-growing channels. We made some modifications to our approach to both third party and as well first-party delivery as drivers of our business going forward by managing the markup on our products and providing a royalty-free markup to our franchise owners, and we did that last year, which somewhat affects our ad fund, but actually has turned out to be a great decision because it's really driving strong performance and delivery. I'll also call attention to catering, which is effectively a delivery option for the brand catering sales up 17% during the quarter, which is a good indication as we continue to pull the levers that we have for this business, really strong performance there as we develop both those platforms for the future. Operator: Our next question comes from Andy Barish with Jefferies. Andrew Barish: Just wanted to understand a little bit more on the mini bundle rationale and the pricing decision. I don't remember that being in the marketing plan. So just how did that kind of come about? And then I have a quick follow-up as well. Charles Morrison: Andy, we're always going to have, I guess, a few tricks up our sleeve as we feel like we need them early this year. We tested a bundled offer with our #2 sub plus chips and a drink for a value price point. The mini was something we also had in consideration should we want to leverage that in a value orientation for consumers. And given what we've seen in consumer confidence that's affected the whole industry. We felt like it was a good time to put that bundle out there only in the digital space, by the way. So it complemented some of our other offerings, notably Mike's Hot Italian. But the good news on that price point with the mini plus chips at $7.99, it was actually margin friendly to our franchise owners, and we think a very effective promotion that's done its job. Andrew Barish: Makes sense. And then, Michele, just on the fourth quarter guide implies on same-store sales, a deceleration in both the 2- and 3-year trends. Is this just kind of the environment out there that's sort of tricky and choppy or anything else we should be aware of? Michele Allen: Yes. I think we delivered that 3% transaction led comp for the quarter, which is a really great result in the environment and meaningfully above the industry. When we think about the fourth quarter comp, what we're really reflecting the continued progression of our marketing strategy as well as some continued softness in the overall consumer confidence. Operator: Our next question comes from Leah Jordan with Goldman Sachs. Leah Jordan: You talked about a strong line of sight on your new store development for the next 5 years. So curious what you would need to see to consider potentially accelerating the pace of that growth? And then also, how do you think about any impact from the recent rise in interest rates on the ability for franchisees to execute on the time line you've laid out so far? Charles Morrison: Well, thank you for the question. Look, first of all, we feel very confident in our ability to continue to accelerate our store development, both here in the U.S. as well as overseas. And I think both were demonstrated during the quarter with 80 openings during the quarter, very strong performance. We expect that to continue to grow. Our guidance is to be at that 8% or more for unit development, which we feel is very, very much in line. We noted that we had developed a pipeline of over 1,600 stores. What I can tell you is there is strong, strong sentiment amongst our franchise owners continue to accelerate their development. Our real estate pipeline is quite strong, in fact, quite a bit above where it was a year ago. which gives us confidence going into 2027 and beyond that we'll continue to see strong development for years to come. As it relates to the interest rates, we don't think that has any effect whatsoever on our franchise owners' ability to provide capital to grow. They are generally well capitalized, and our unit development costs are very low. In fact, amongst some of the lowest in the industry at just over $500,000 to develop a store. So much of that development can be generated out of cash flow generated from their operation as much as it relies on financing to be done. Leah Jordan: That's very helpful. And just 1 follow-up. I think 1 of the reasons you highlighted for the new mini sub promo was about managing food costs for your operators. So see if you could catch us up on the commodity basket, how you're thinking about overall inflation for them as we head into next year. I think some proteins have come in, but what remains very inflationary. So puts and takes there to their basket and then just the mitigation tools that you have to support them? Charles Morrison: Yes. What I can say is that franchisee margins across the system were generally improved year-over-year and we're happy to see that, and that is driven partly by food costs as well as leverage on our transaction growth that we're seeing in the stores. Our basket has remained quite stable, if not improving in terms of overall cost margin for the business, which is really encouraging, especially given the fact that we've only taken a small amount of price throughout the year. So I think we're in a great position right now despite what some of the macro commodity challenges have been for others. Operator: Our next question comes from Andrew Charles with TD Cowen. Andrew Charles: Great. Two for me. Just first on the catering. What do you attribute to the strength that you guys have seen in catering growth? And given the softer consumer environment that you spoke about, is this an area that you can put the foot on the gas with marketing and start to increase awareness of as well to help overpower the consumer environment? Charles Morrison: Yes. Look, I think, Andrew, it's a great lever for us. When we talked about -- historically, it's been about 3% of our sales. We think it can be as high as 10% over time. We've eclipsed 4% at this point. So we're feeling very good about the momentum there. There were a few key unlocks that we recognized in our approach to the market that we've developed against, and we're seeing good performance there. And really, the key here is the focus, encouraging our franchise owners to be outside their stores, engaging in the community, but also leveraging some digital platforms be it DoorDash, ezCater and others that we're partnered with and making sure that we're doing everything we can to capture every opportunity. Our product is designed for catering and to be only at 3% a year ago, is a little disappointing. So a full court press on that right now should yield growth for the future. Michele Allen: Disappointing, but a great opportunity. Andrew Charles: And Michele, just 1 follow-up. Just what's the implied level of price within the fourth quarter guidance for same-store sales? Michele Allen: Yes. We're not breaking out price versus traffic, but I would say consistent with what we've experienced year-to-date. Operator: Our next question comes from Danilo Gargiulo with Bernstein. Danilo Gargiulo: Charlie, I wanted to ask you about how Walmart entering into the restaurant delivery business could be changing the aggregator landscape in your views, any opportunities also from a catering standpoint. And specifically, like under what circumstances you will be considering partnering with Walmart to expand your delivery reach? Charles Morrison: Yes, we learned about that. It's interesting. I'll put it that way. I'm not sure that it means anything meaningful for Jersey Mike's to participate in it. I think we still need to understand what are the economics associated with a partnership like that and whether it's beneficial to Jersey Mike's. I will say this, I don't think we need that business channel to help accelerate our growth. I think we've demonstrated by way of our more sophisticated digital marketing efforts, our work to attract a broader user base brings them in are working. So we're going to be very thoughtful before we would make a commitment to such a partnership. Danilo Gargiulo: Great. And then on the social media spending. In the past, you were talking about how an increase in social media spending and exposure to younger consumers will be translating to sales lift almost rapidly. I'm wondering how you're determining what is the right media mix today? And under what circumstances do you see opportunity to accelerate the transition to more social media spending going forward? Charles Morrison: I think as we've talked about, we have not been spending at all in the social space over the years. And so part of the journey that we are on is learning more and more about the relative engagement of that younger audience, a more diverse audience coming into the brand. And we have been measuring their consideration and seeing meaningful lift in consideration among certain customer segments. There's kind of a complicated way of going about this, but it really comes down to are the messages connecting. And if they're not, how we modify the message to get them to engage more and when they engage, how often will they transact with us and then when are they buying? How can we reengage with them and bring them back for more frequent occasions. So this is part of the learning journey that will take quarters or years over time to perfect. But right now, a lot of the leading indicators, as I mentioned, have been really good, notably a sizable increase in consideration amongst women as well as a multicultural audience as well. Operator: Our next question comes from Dennis Geiger with UBS. Dennis Geiger: I wanted to ask a little bit more about what you're seeing with your customer as far as any changes in purchase or visit behavior, recognizing you put up strong results in the quarter. But do you think you're seeing any greater impact from the difficult consumer backdrop that you referenced? Charles Morrison: Other than what I mentioned was a temporary shift that I think everybody saw in the latter part of the third quarter, which now has -- is behind us. We feel very good. I think we're right on pace from what we've expected. We are seeing customers at all levels enjoying the Jersey Mike's brand and frequency rates have been very consistent, amongst not only just our core customers, but in actively building new customer base and taking those new customers and making them now light, medium and heavy users of our brand. The journey has been pretty much as we would have expected. So despite the macro backdrop, I think Jersey Mike's has demonstrated we are well outperforming everybody else in the space. And so I think we feel very good about where we sit today. Dennis Geiger: Helpful, Charlie. And then just one, you've got a bunch of sales drivers that clearly collectively are contributing to the sales and transaction growth strength and consistency. Can you give us a rough sense looking ahead medium to long term? Sort of how you loosely rank some of those drivers across the marketing and the menu innovation loyalty, maybe throughput, et cetera, anyway, to loosely force rank those? Charles Morrison: Yes. I think at the end of the day, it's all about frequency and it's frequency amongst various cohorts of our customers. And I'll reinforce that while we have a really robust loyalty platform, the size of that platform is relatively small compared to peers in the industry. And so our primary objective is to use these LTOs, these new products to engage a new set of consumers to bring them in through these digital channels, convert them into high-frequency users of the business. In fact, again, our most loyal customers use us about once a month, everybody else, maybe twice a year. So there's a great multiplier effect, we believe, over time by bringing people into the brand, engaging them in a more one-to-one fashion and growing that over time. So that's it's all part of a collective strategy where each piece and part really play together. The only area outside of that would be maybe in catering, which again, we're enjoying some really strong growth in catering. And we'd like to see that platform continue to build over time because a lot of that catering business is done before we even open our doors each morning. So that becomes a valuable use of our space and a great opportunity to grow in the future. Operator: Our next question comes from John Ivankoe with JPMorgan Chase & Co. John Ivankoe: The question is on new unit volumes. Certainly, Charlie, I heard your comments fiscal '26 class said to be above the fiscal '25 class. But I just wanted to get your sense as we look forward next 12 months, 24 months, how do you expect the unit volumes to trend relative to average unit volume, should we expect a normal kind of retail/restaurant waterfall that we kind of start low and build up over time? Or might we be at least thinking about some smaller fill-in type of units that might achieve very high returns. But new unit volumes actually less than average unit volume. So I just wanted to get an update or a refresher of the relationship between new unit volumes and average unit volumes? Charles Morrison: Appreciate the question. What I'll say is this, yes, this year, if you compare the 2026 class against 2025 in the same time frame, we have seen our new stores coming out of the gate stronger than a year ago, which we're very excited by. And that's been a trend for the brand over a number of years that each successive vintage of stores continues to get stronger and stronger. And in this case, they're opening at or above the average for the brand. There is not an open low kind of growth mechanism here. We tend to see the stores open fairly strong, stabilize and then grow over time. So I think that will be more of the mix of new stores over the long haul to expect to see that. But to your question on fill in, though, we don't see that there's much in the way of fill-in that would imply any cannibalization, as we mentioned, we mapped out the entire country. We identified over 1,600 distinct trade areas just for now that we can go develop which represents a lot of white space and derisks any challenge of cannibalization in the future. So all in all, feel very good about our pipeline of growth and the opportunity to accelerate that over time. Operator: Our next question comes from Margaret-May Binshtok with Wolfe Research. Margaret-May Binshtok: I just wanted to ask a little bit on the competitive environment. Are you seeing your direct peers leaning into value or discounting more? And how does that, I guess, position you guys in terms of your view on value and discounting going forward? Charles Morrison: We look at the competitive landscape as all eating occasions and limited service restaurants. We don't really focus our attention on only sandwich players. That said, I think we see across the entire landscape a lot of value orientation in the form of bundling, price offers, deep discounts and as such, I love the fact that our strategy maintains a value-oriented price point where needed. So our Mike's Hot Italian product, for example, is featured at $8.95. It represents a very positive margin impact for our franchisees as the food cost on that product is quite low. And so being in that value orientation at a competitive price, coupled with our marketing strategies that are both yielding transaction growth for the business. Is a great place to be. So we're not feeling that pressure per se, but we know that if we need to lean in on value, our mini bundle is a great example of that. Again, very food cost friendly, very customer-friendly at a $7.99 price point. So we can play in that game where we need to, but we respect and want to maintain that premium positioning for our product based on the quality and care that we put into every Jersey Mike's sub. Margaret-May Binshtok: And just a follow-up, I just wanted to ask, I think last quarter, you mentioned that you guys were testing late night. Is that something that's still on the table? And any update there would be helpful? Charles Morrison: Yes. It's in our mix of opportunities, I'll put it that way. But we're not actively working that just yet. We think the opportunity exists because we do close our doors typically around 9 p.m. across the country today. And we know there is a late-night consumer. I think what we want to do first is broaden the consumer base, invite them into Jersey Mike's, make them active users and then bring them along for those late-night occasions down the road. It won't be every store if we do it. It will be selective based on the market dynamics in each and every market across the country. Operator: Our next question comes from Gregory Francfort with Guggenheim Partners. Gregory Francfort: Thanks for the question. Charlie, my first one is maybe going back to this -- the digital effort that you're doing to go after these new customers. What does your research suggest about the Hispanic, the female, the younger customer, are they eating subs to your competitors? Are they eating maybe sandwiches but not subs? Are you hoping to train them to kind of eat subs of the category? I'm just wondering what your research suggests about that opportunity? Charles Morrison: That's a great question. Thank you. They do eat sandwiches quite regularly. I think everybody pretty much on the planet does. And so we're happy about that part. However, what we do find in our research is that they may not know us for the variety we offer in our menu and the variety of flavors and options that we present to our consumers. And so you're seeing us take an active role in introducing really flavorful and relevant products. So a good example was our chicken salad promotion over the summer. Strong appeal to women really performed quite well for the brand. It's a fan favorite and certainly draws a broader consumer set in. Mike's Hot Italian has strong appeal amongst a much broader and younger consumer base who is looking for strong flavor forward. Although we offer a great authentic deli style sub, our cheesesteak lineup, our hot subs and all of these new products represent the variety that, that broader consumer base is looking for. And it's our job to market those more aggressively to consumers to invite them in for that next occasion. Gregory Francfort: Got it. Okay. And maybe 1 for Michele. You've gotten really good expense leverage in '26. And I think you mentioned kind of that's driven the outsized EBITDA growth this year. How much of that maybe rolls forward into next year and maybe the out year versus maybe how much was a rebasing for '26? Michele Allen: Yes, there definitely is a rebasing for 2026. When you think about our Area Director transition that we are seeing a favorable impact to EBITDA growth. This quarter, it was about $9 million, and it will have a an impact on our full year growth rate. That's why we're looking at 20% in the third quarter and even a much higher than algo growth rate the full year. But we will begin lapping that in -- throughout 2027. I would say, a little less in the first quarter and the second quarter, and then there will be no impact on the year-over-year come likely third quarter. Operator: Our next question comes from Lauren Silberman with DB. Lauren Silberman: I want to start following up with Dennis's question. The slowdown that you saw later in the quarter, did that show up more in traffic or check? And as trends have improved in Q4, do you think that's more Jersey Mike's specific? Or did you see the industry also improve the September slowdown? Charles Morrison: I can't comment on what the industry has seen in the broader sector other than I think that particular event was a bit short lived. Again, you had some negative consumer sentiment around some macro issues that affected everyone. So for us, check really wasn't the issue. Check's been a small part of our comp over the entire year. So I would just give you that. But as it relates to the broader macro restaurant landscape, I can't comment on where I think everybody else shook out on that. Lauren Silberman: Okay. Understood. And then I think you guys are in the process of changing your food distributor to predominantly, I believe, performance. Can you just talk a little bit about the decision behind that and benefits that you see moving distributors, whether that be to franchisees or yourself? Charles Morrison: Yes. That is something we looked at and evaluated as we came to the organization. A lot of this centers on the fact that it was an opportunity for us to consolidate and create some efficiencies, quite frankly, in our distribution network over time. And so we have been under some long-standing agreements that were -- that needed to be rebuilt. And so we did a proper exercise to look at the marketplace and establish what we felt was the right model for this business on a long-term basis. And so we are in the just early stages of that migration. It will take some time to make that happen. We do anticipate that on the back side of that, we're going to have a fantastic set of partners supporting our business for the long term. Operator: Our next question comes from Sara Senatore with Bank of America. Sara Senatore: Maybe just 2 questions on both kind of follow-ups. One is on the LTO calendar, you brought Mike's Hot back. I guess as you think about the sort of pipeline, is that how you'll think about it sort of the 2 to 3, one is new and one is kind of return from the pantry does your pipeline look pretty full? Or does some of that have to wait until you make the shift wholesale shift to the new distributor as you think about like partnering on some of the -- maybe the upstream kind of production that could happen that maybe benefit from the in-store labor? I'm just trying to understand kind of the idea of bringing something back when you're still fairly new to having LTOs on a regular basis. And then just a quick question for Michele. You mentioned financial flexibility in the context of the special dividend. I think as you said, your buybacks are kind of constrained by the need for the float. So what else is there? I don't think that the system needs any kind of infusion of cash from you, but just wanted to understand that comment? Charles Morrison: Let me start first on the new product pipeline. First and foremost, the distribution change has 0 to do with any sort of product innovation. That's simply just a transfer of product from one provider to another. So there's no impact whatsoever there. I mentioned earlier about the new product pipeline is one that we've been working on over time. What we love about this brand is we have a lot of flexibility within our menu to be able to utilize existing SKUs to present them in a differentiated way and quite frankly, play on some consumer favorites that they've developed themselves over years while they've enjoyed Jersey Mike's. So the Mike's Hot Italian is a good example of that. Chicken salad was a product that also we pulled back out of the pantry, so to speak. -- this year. And quite frankly, I think that's a very thoughtful strategy to bring a product back from time to time. Other brands have demonstrated that over many years. And I think for Jersey Mike's, that plays quite well for us. So I think there is a mix of new. There might be some times where we just feature something that's right on the menu as well. We love our Philly cheesesteaks. We'll put them up against anybody's and consumers need to know that and experience that as well. So a good example of where we have a lot of flexibility to promote our products. And then Michele? Michele Allen: Sara, yes, I think you can expect that we're going to generate predictable cash flow and then consistently return our excess cash to shareholders. And what we mean by maintaining financial flexibility is really that the mix of share repurchases, special dividends, regular way dividends, that's likely going to change depending upon market conditions and the relative valuation. Operator: Our next question comes from Logan Reich with RBC Capital Markets. Logan Reich: I just had one on the EBITDA in Q3 came a bit ahead of the guidance of at least 13% in the quarter. Just curious what the driver of that upside was versus your guidance? And any expectation for that driver to continue to flow through the model in Q4 and into '27? Michele Allen: Yes. It really was just our advertising fund performing a little bit better than we had initially expected. That drove, I think, of $5 million or $6 million. Operator: Our next question comes from Sharon Zackfia with William Blair. Sharon Zackfia: You mentioned that you expect to have some new international commitments coming up in the coming months. Can you talk about how you're prioritizing what international markets to go into after the U.K.? Charles Morrison: I could barely -- I couldn't hear you very well. Sharon. Can you repeat the question? Sharon Zackfia: Yes. Can you hear me better now? Charles Morrison: Yes. Sorry about that. Yes. Sharon Zackfia: Okay. Yes. Sorry about that. You talked about announcing some new international market commitments likely in the coming months. Can you talk about how you're prioritizing what international markets to focus on after the U.K.? Charles Morrison: Yes, absolutely. Sorry about that. So we are working actively in multiple markets around the world, seeking partners that we believe are going to be best-in-class for Jersey Mike's to grow the business over time. We had mentioned previously in a study and report we did that we identified 14 priority markets that, quite frankly, are all across the world, so it includes markets in Europe, the Middle East, Asia and the like. I would say the Middle East is a little challenging right now. But if you look across the rest of the world, there's a lot of active interest in Jersey Mike's. And we do anticipate that over the course of the next 6 to 12 months, we'll be bringing new markets on board. Our primary focus is the right partner, with the right market and bringing those along. So we're not rushing this in any way. We want to do it right. But over time, you will see us continue to build new markets in the international space. Sharon Zackfia: And second question, I know -- can you still hear me, okay? Charles Morrison: Yes, yes, yes. Sharon Zackfia: Okay. Sorry about that. I know you've been working on broadening your brand reach. And I think the macro environment has been more challenging than maybe you would have expected. Is there any particular group, whether it's younger, Hispanic or women where this macro environment is making it a bit tougher for you? Or any of those groups where you're maybe overachieving versus the others? Charles Morrison: Yes. I think the answer to that is really no. If you reflect on our historical customer base and the mix of consumers that make up our customer base, it has predominantly been generally a little bit older, a skewed male, higher income, less diverse. And so there really wasn't a market there for us to go -- that we were at risk of. So as we've been inviting this broader demographic in, we're actually seeing good results, both in terms of consideration, in terms of purchase behavior and engagement with our loyalty platform as an example. And so we feel very good about it. Could it be going faster if there wasn't the macro backdrop, possibly. But we're pleased with the fact that we are acquiring guests across all of those different cohorts. Operator: Our next question comes from Zach Fadem with Wells Fargo. Zachary Fadem: Could you compare the performance of Mike's Hot Italian versus Chicken Salad in terms of customer response, order mix, maybe new customer incrementality and as you think about the LTO calendar next year, any update and philosophy in terms of going high versus low with respect to the $9 price point? Charles Morrison: I would say Mike's Hot Italian and the Chicken Salad sandwich have been quite similar in terms of their overall performance whether it might be a different demographic that each one serves each has generated a strong level of incrementality or finding new customers to enjoy that product. Mix levels have been relatively similar as well. We enjoyed also in both cases, a long-tenured promotion in the LTO, which I'm very happy about. And so as I think about the future, we really haven't factored in what price looks like on some of these. I think prices is also relative to the food cost impact to our franchisees. So we always want to present the best and most compelling value to our consumers without negatively impacting the P&L. We've been able to do that at an $8.95 price point for both Chicken Salad and Mike's Hot Italian, which demonstrates the flexibility we have in the brand. So over time, hard to tell where we'll end up on that. Zachary Fadem: Got it. And on the customer diversification strategy, how would you characterize the teams success with respect to shifting the mix towards lower income or value customers? And to what extent maybe we should anticipate any additional actions with respect to value or promo on your part? Charles Morrison: Yes. I don't know that we need value to be able to acquire a differentiated group of customers, meaning deep value discounts, if you will. What we've presented is a strong value to a very premium product. And that's how we want to do this over time, and it's been very successful. As we mentioned, I mean, we're driving comps primarily by transactions, not by price as others have seen in the place. So I would submit that over time, we're going to continue to be relevant to those customers in our marketing efforts. Historically, we haven't even spoken to them. We've only been on national TV. We haven't been engaged in the digital space. And so you're seeing us use influencers, clever means of advertising beyond what the norm has been over a period of time to try and engage consumers and bring them along in the story of the brand and then invite them to try the brand or use our products by way of some of these new products. So I think over time, you're going to see that continue to play out. It takes time. But again, very encouraged by the increasing level of consideration amongst these cohorts that are relatively new to the brand as well as their actual purchase behavior over time as well. Michele Allen: And then I would just add to that, with Q3 outperforming the overall industry and again, primarily transaction led, we're winning today without having to lean in heavily on that value orientation. Operator: Our next question comes from Jacob Aiken-Phillips with Melius Research. Jacob Aiken-Phillips: So just first on catering. How broadly distributed is the catering growth across the system? And like what separates the franchisees who have built a meaningful catering business from the underpenetrated ones? And what are you doing to kind of help that second group catch up? Charles Morrison: Yes. I think what we've found is franchise owners that are actively involved in their communities, reaching out to schools, churches, businesses and the like and engaging the catering business tend to have overall stronger results for their business as well as a much higher catering mix. And so a lot of it is about getting out in the marketplace. What we can do to help them is improve the platform overall, provide access to catering opportunities that they may not go out and find outside of their stores through some of the channels we mentioned like ezCater, DoorDash and the like. and those become valuable for us over time. And so really, the focus there is just the awareness of catering, the importance of what it means to the business. And taking our fair share, quite frankly, of the market for catering out there that we haven't had in the past. Operator: We've now reached the end of our question-and-answer session. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines, and have a wonderful day. Before you buy stock in Jersey Mike's Subs, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Jersey Mike's Subs wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $337,166!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,339,143!* Now, it's worth noting Stock Advisor's total average return is 904% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 28, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Jersey Mike's (JMKE) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

For the quarter ended September 2026, Jersey Mike's (JMKE) reported revenue of $209 million, representing no change compared to the same period last year. EPS came in at $0.21, compared to $0 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $208.43 million, representing a surprise of +0.28%. The company delivered an EPS surprise of +31.25%, with the consensus EPS estimate being $0.16. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Jersey Mike's performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: - Same-store sales: 3% versus the five-analyst average estimate of 3%. - Total stores (end of period) - Jersey Mike?s stores systemwide: 3,456 compared to the 3,452 average estimate based on five analysts. - Total stores (end of period) - Company-owned: 22 versus the four-analyst average estimate of 25. - Total stores (end of period) - International Franchised: 41 versus 41 estimated by three analysts on average. - Total stores (end of period) - Domestic Franchised: 3,393 compared to the 3,386 average estimate based on three analysts. - Average unit volume (AUV, in millions): $1.39 million versus $1.97 million estimated by two analysts on average. - Total New Store Openings (gross) - Jersey Mike?s stores systemwide: 80 versus the two-analyst average estimate of 74. - New Store Openings - Domestic Franchised: 69 versus 63 estimated by two analysts on average. - New Store Openings - International Franchised: 11 versus 11 estimated by two analysts on average. - Revenue- Royalties and other revenues: $143 million versus $140.85 million estimated by five analysts on average. - Revenue- Company-owned stores sales: $9 million versus the five-analyst average estimate of $9.35 million. - Revenue- Advertising revenue: $57 million compared to the $56.9 million average estimate based on five analysts. View all Key Company Metrics for Jersey Mike's here>>> Shares of Jersey Mike's have returned +0.2% over the past month versus the Zacks S&P 500 composite's -0.2% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Jersey Mike?s Subs Inc. (JMKE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

- Interested in Jersey Mike's? Here are five stocks we like better. - Strong third-quarter performance: System-wide sales rose 11% to $1.2 billion, while same-store sales increased 3%, revenue grew 10% to $209 million and adjusted EBITDA climbed 20% to $125 million. - Digital and unit expansion remain key growth drivers: Digital sales reached 43% of quarterly sales, loyalty registrations increased 21% year to date, and the company opened 80 stores in the quarter, bringing total locations to 3,456. - Outlook and shareholder returns reaffirmed: Jersey Mike's maintained its 2026 targets for at least 2.5% same-store sales growth, 8% net unit growth and 20% adjusted EBITDA growth. The company also authorized $100 million in share repurchases and declared a $0.35 special dividend. - Jersey Mike's Serves Fresh Gains After IPO Stumble Jersey Mike's (NYSE:JMKE) reported third-quarter system-wide sales of $1.2 billion, up 11% from a year earlier, as 9% net unit growth and a 3% increase in same-store sales supported results. Same-store sales accelerated from 2.3% in the second quarter and were driven primarily by transaction growth, according to Chief Executive Officer Charlie Morrison. Total revenue increased 10% to $209 million, while adjusted EBITDA rose 20% to $125 million. Chief Financial Officer Michele Allen said royalties and other revenue grew 12%, while the company's transition from an area-director model to an internally staffed support model contributed $9 million year over year to adjusted EBITDA. → Comfort Systems Earnings: AI Slowdown or More Growth Ahead? Adjusted net income was $74 million and adjusted earnings per share were $0.23. Allen said the company introduced those metrics during the quarter and did not provide prior-year comparisons because of its pre-IPO capital structure. The company generated $170 million of free cash flow through the first nine months of 2026, including $88 million in large special items such as area-director buyouts. Morrison said the company's strategy remains focused on reaching $2 million in average unit volumes, expanding transactions and increasing franchisee four-wall cash-on-cash returns. The company identified broadening its customer base, growing digital and delivery sales, menu innovation and consistently delivering its deli experience as key components of that strategy. → A 70% Rally Isn't Chord Energy's Only Selling Point Jersey Mike's shifted digital marketing from less than 1% of its media mix before 2026 to about 20% this year. Morrison said purchase consideration has improved among consumers ages 18 to 34, women and Hispanic consumers. Loyalty registrations rose 21% year to date. The company has approximately 14 million loyalty-program users, including roughly 7 million to 8 million active users, Morrison said. Active loyalty customers visit about once per month, compared with as few as two visits annually for customers outside the active database. He said the company is still building its first-party data and personalized marketing infrastructure and expects the effort to develop over the coming quarters. → Not All Tech Is Getting Crushed: 5 Names Holding Up Through the AI Sell-Off Digital sales represented 43% of sales in the quarter, up about 100 basis points from a year earlier. The company continues to target a 60% to 70% digital sales mix over the long term. Delivery was among the company's fastest-growing channels, Morrison said, following changes to its approach to third-party and first-party delivery, including a royalty-free markup for franchise owners. Catering sales increased 17% year to date and have risen above 4% of sales, compared with roughly 3% a year earlier. Management said it believes catering could eventually represent as much as 10% of sales. Morrison said the company is encouraging franchisees to pursue local catering opportunities while using platforms including DoorDash and ezCater. Morrison said the summer Chicken Salad limited-time offer helped attract new guests. The company also relaunched Mike's Hot Italian, which has produced sales mix levels consistent with its first-quarter performance. About half of customers who purchased Mike's Hot Italian during its earlier launch were new to the business, he said. In October, Jersey Mike's introduced a digital-only Mini Bundle featuring any mini sub and chips for $7.99. Morrison said the offer was margin-friendly for franchisees and had performed well in its first two weeks. The company expects to offer two to three limited-time offers in 2027. Management said it intends to preserve the brand's premium position despite increased value offers across the restaurant industry. Morrison cited the $8.95 price point on Mike's Hot Italian and the Mini Bundle as examples of offers that provide customer value without pressuring franchisee economics. He said franchisee margins have improved year over year, supported by stable or improving food costs and transaction leverage, even as the company has taken only limited price increases. The company opened 80 stores in the third quarter, bringing year-to-date openings to 210 and total system stores to 3,456. That represented approximately 9% net unit growth from a year earlier. Morrison said 2026 openings are generating higher average unit volumes than the 2025 opening class at the same point last year. Jersey Mike's has identified more than 1,600 domestic trade areas for future development and has visibility into roughly five years of domestic development, management said. Morrison added that the company's real estate pipeline is above year-ago levels and franchisees remain interested in accelerating development. He said typical development costs are just over $500,000 per store and that franchisees are generally well capitalized. Internationally, the company ended the quarter with 41 Canadian stores, including 20 openings year to date, and expects to open its first U.K. location in the coming weeks. Morrison said the company has identified 14 priority international markets across Europe, the Middle East and Asia, and expects to announce additional markets and partners over the next six to 12 months. Jersey Mike's reaffirmed its 2026 outlook 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%. Allen said fourth-quarter net interest expense is expected to be about $25 million, and the fully exchanged diluted share count is expected to be approximately 318 million. The company expects advertising expenses to exceed advertising revenue by $5 million for the full year, though it expects the two to be approximately equal on a full-year basis beginning in 2027, subject to quarterly timing differences. Allen said third-quarter EBITDA outperformance versus prior expectations was driven by advertising-fund performance that was approximately $5 million to $6 million better than anticipated. At quarter-end, the company had about $1.5 billion in net debt, including $325 million in cash, and a net leverage ratio of 3.9 times. The board authorized a share repurchase program of up to $100 million and declared a special cash dividend of $0.35 per Class A share for shareholders of record on Nov. 5. Allen said the two actions represented about $200 million of capital returned less than four months after the company's IPO. She said management expects to generate predictable cash flow and return excess cash to shareholders, with the mix of repurchases and dividends depending on market conditions and relative valuation. Jersey Mike's, commonly known as Jersey Mike's Subs, is a fast-casual restaurant company focused on submarine sandwiches and related food offerings. Its menu includes hot and cold subs, wraps, salads, beverages and desserts, with catering services also available at many locations. The business operates primarily through a franchise-based model under the Jersey Mike's Subs brand. Restaurants are known for preparing sandwiches to order, including sliced meats and cheeses, fresh vegetables and the company's signature "Mike's Way" preparation. Jersey Mike's traces its roots to 1956, when the original submarine shop opened in Point Pleasant, New Jersey. 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Company updates full-year 2026 outlook Announces $100 million share repurchase authorization Declares $0.35 special dividend to holders of Class A common stock TINTON FALLS, N.J., October 28, 2026--(BUSINESS WIRE)--Jersey Mike's Subs Inc. (NYSE: JMKE) today announced financial results for the fiscal third quarter ended September 27, 2026. Third Quarter 2026 Highlights: - Same-store sales increased 3.0%, primarily driven by transaction growth - Opened 80 new stores, driving net store growth of 8.8% year over year - Systemwide sales increased 11% year over year to $1.204 billion - Total revenue increased 10% year over year to $209 million - Digital sales mix increased to 43% from 42% in the prior year - Net income for the quarter of $10 million versus $32 million in the prior year - Adjusted EBITDA for the quarter of $125 million versus $104 million in the prior year - Diluted loss per share of Class A common stock of $0.05 for the period from July 31, 2026 through September 27, 2026 - Adjusted Net Income and Adjusted EPS of $74 million and $0.23, respectively - Announced a return of capital of up to $200 million, including a share repurchase authorization of up to $100 million of Class A common stock and a special cash dividend of $0.35 per share of Class A common stock "We continue to see meaningful traction from our digital marketing initiatives as we work to expand our consumer reach and drive greater frequency over time," said Charlie Morrison, Chief Executive Officer. "Our same-store sales accelerated sequentially in the third quarter, with growth continuing to be driven by transactions for the third consecutive quarter. We remain focused on our long-term strategic goals of driving average unit volumes to $2 million, growing cash-on-cash returns for our franchise owners, and expanding our footprint domestically and around the world." Key Performance Measures | | Thirteen Weeks Ended | | September 27, 2026 | | September 28, 2025 Systemwide Sales (in billions) | | $ | 1.204 | | | $ | 1.083 | Same-Store Sales Growth | | | 3.0 | % | | | 3.9 | % Digital sales mix | | | 43 | % | | | 42 | % Average Unit Volume (AUV, in millions) | | $ | 1.386 | | | $ | 1.365 | Net Store Growth | | | 8.8 | % | | | 8.8 | % New store openings (gross) | | | 80 | | | | 54 | Total stores (end of period) | | | 3,456 | | | | 3,177 | Financial Results Total revenue increased 10% year over year to $209 million. Royalties and other revenue increased 12% to $143 million and advertising revenue increased 8% to $57 million, both driven by net store growth of 8.8% and same-store sales growth of 3.0%, with the latter primarily driven by transactions. Net income for the quarter was $10 million versus $32 million in the prior year, the decline being driven by a $29 million one-time, non-cash, equity-based compensation charge related to the IPO as well as IPO-related professional expenses, partially offset by a gain on the sale of company-owned stores. Net loss attributable to Jersey Mike's Subs Inc. was $11 million, or $(0.05) per diluted share of Class A common stock for the period from July 31, 2026 through September 27, 2026 following the Reorganization Transactions and IPO. Adjusted EBITDA increased 20% to $125 million versus $104 million in the prior year. The increase was driven by net store growth and growth in same-store sales, while also benefitting from $9 million in lower expenses related to the prior Area Director program. Adjusted Net Income was $74 million and Adjusted EPS was $0.23 for the third quarter. Adjusted Net Income and Adjusted EPS, which the Company is presenting for the first time this quarter, assume the exchange of all outstanding Common Units for Class A common stock and reflect income taxes at a blended 25% rate as if Jersey Mike's Subs Inc. owned 100% of Jersey Mike's Holdings for the entire period. Adjusted EPS is not presented for the prior-year period because Jersey Mike's pre-IPO capital structure does not provide a meaningful basis for comparison. See Table 5 for reconciliations to net income and diluted earnings per share, the most directly comparable GAAP measures. The Company generated $177 million of operating cash flow in the first three fiscal quarters of 2026. Capital expenditures in the same period were $7 million. In connection with the issuance of 13,782,609 shares of Class A Common Stock, Jersey Mike's received net proceeds of approximately $301 million, net of underwriting discounts and commissions, which were used to repay outstanding indebtedness. As of September 27, 2026, total debt was $1.8 billion and cash, cash equivalents and restricted cash were $325 million. Development As of September 27, 2026, there were 3,456 Jersey Mike's stores systemwide, including 3,415 stores in the United States, of which 3,393 were franchised and 22 were company-owned. | | DomesticFranchised | | InternationalFranchised | | Company- owned | | TotalSystem Store count as of December 28, 2025 | | 3,209 | | | 21 | | 26 | | | 3,256 | Openings | | 47 | | | — | | — | | | 47 | Closures | | (3 | ) | | — | | — | | | (3 | ) Net transfers(a) | | (10 | ) | | — | | 10 | | | — | Store count as of March 29, 2026 | | 3,243 | | | 21 | | 36 | | | 3,300 | Openings | | 73 | | | 9 | | 1 | | | 83 | Closures | | (5 | ) | | — | | — | | | (5 | ) Net transfers(a) | | 11 | | | — | | (11 | ) | | — | Store count as of June 28, 2026 | | 3,322 | | | 30 | | 26 | | | 3,378 | Openings | | 69 | | | 11 | | — | | | 80 | Closures | | (2 | ) | | — | | — | | | (2 | ) Net transfers(a) | | 4 | | | — | | (4 | ) | | — | Store count as of September 27, 2026 | | 3,393 | | | 41 | | 22 | | | 3,456 | __________________________ (a) | Represents store transfers between franchise owners and the Company Share Repurchase Authorization and Special Dividend On October 26, 2026, the Company's Board of Directors approved a stock repurchase authorization of up to an aggregate $100 million of the Company's outstanding Class A common stock and also declared a special cash dividend of $0.35 per share payable on November 19, 2026 to holders of Class A common stock as of the close of business on November 5, 2026. These actions reflect the Company's strong cash flow generation and commitment to returning excess capital to stockholders. Outlook Jersey Mike's updated outlook for full-year fiscal 2026 is as follows: - Same-store sales growth of at least 2.5% - Net unit growth of at least 8% - Adjusted EBITDA growth of at least 20% Conference Call and Webcast Jersey Mike's will host a conference call today, October 28, to discuss the fiscal third quarter 2026 financial results and business updates at 8:30 AM Eastern Time. The conference call can be joined telephonically by dialing 1-877-425-9470 or 1-201-389-0878 (international) and asking for the Jersey Mike's conference call. A replay will be available two hours after the call and can be accessed by dialing 1-844-512-2921 or 1-412-317-6671 (international), then entering the replay code 13762283. The replay will be available through Wednesday, November 11, 2026. The conference call will also be webcast live and later archived on the investor relations section of Jersey Mike's corporate website at investors.jerseymikes.com under the "News & Events" section. About Jersey Mike's Jersey Mike's is a leading fast-casual restaurant franchisor with more than 3,400 locations across the United States and Canada. Founded in 1956 as Mike's Subs in Point Pleasant, New Jersey, the company has grown from a single neighborhood sub shop into one of the fastest-growing restaurant brands in America. Jersey Mike's differentiates itself through its "A Sub Above" positioning, emphasizing fresh-sliced meats and cheeses, authentic recipes, and a distinctive customer experience that has earned recognition as the top-rated QSR brand in 2026 and the #1 Best Sandwich Chain in America in 2025. Non-GAAP Financial Measures Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Management believes that certain non-GAAP financial measures provide users of our financial information with useful supplemental information that enables a better comparison of our performance across periods to help investors, securities analysts and other parties better understand underlying trends in our business. Management uses these measures to evaluate our performance. Full definitions of non-GAAP measures and reconciliations of GAAP results to the comparable non-GAAP measures for the reported periods appear in the financial tables section of this press release. A reconciliation of forward-looking Adjusted EBITDA growth rate to GAAP net income growth rate cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliation that have not yet occurred, are outside of our control, or cannot be reasonably predicted. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future GAAP financial results. Forward Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such forward-looking statements relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources, and other financial and operating information. All statements other than those that are purely historical may be forward-looking statements. We may, in some cases, use words such as "anticipate," "assume," "believe," "contemplate," "continue," "could," "estimate," "expect," "foreseeable," "intend," "may," "plan," "potentially," "predict," "project," "seek," "should," "target," "will," or "would," or similar words or phrases that convey uncertainty of future events or outcomes, to identify forward-looking statements in this press release. The forward-looking statements contained in this press release are based on management's current expectations and are subject to uncertainty and changes in circumstances. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. There are a number of factors, many of which are beyond our control, that could cause actual results to differ materially from the results anticipated by these forward-looking statements. For a more detailed discussion of these and other factors, see the information under the section "Risk Factors" in our final prospectus filed with the SEC on July 31, 2026 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, relating to our Registration Statement on Form S-1 (File No. 333-297228) and our other filings made with the SEC. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual results may vary in material respects from those expressed or implied in these forward-looking statements. The forward-looking statements included in this press release speak only as of the date of this press release or as of the date they are made, as applicable. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments, or other strategic transactions we may make. Except as otherwise required by law, we disclaim any intent or obligation to update any "forward-looking statement" made in this press release to reflect changed assumptions, the occurrence of unanticipated events, or changes to future operating results over time. Table 1JERSEY MIKE'S SUBS INC. AND SUBSIDIARIESCondensed Statement of Operations(in millions, except per share data)(Unaudited) | | | | | Successor | | | Predecessor | Thirteen Weeks Ended | | Thirty-Nine Weeks Ended September 27, 2026 | | Period from January 16 to September 28, 2025 | | | Period from January 1 to January 15, 2025 | September 27, 2026 | | September 28, 2025 | | | | Revenue: | | | | | | | | | | Royalties and other revenues | $ | 143 | | | $ | 128 | | $ | 403 | | | $ | 344 | | | $ | 19 | Advertising revenue | | 57 | | | | 53 | | | 165 | | | | 147 | | | | 7 | Company-owned stores sales | | 9 | | | | 9 | | | 34 | | | | 27 | | | | 2 | Total revenues | | 209 | | | | 190 | | | 602 | | | | 518 | | | | 28 | Operating expenses: | | | | | | | | | | General and administrative expenses | | 87 | | | | 54 | | | 231 | | | | 127 | | | | 19 | Advertising expenses | | 46 | | | | 45 | | | 161 | | | | 130 | | | | 8 | Depreciation and amortization | | 26 | | | | 25 | | | 77 | | | | 71 | | | | — | Company-owned stores expenses | | 7 | | | | 8 | | | 26 | | | | 22 | | | | 1 | Total operating expenses | | 166 | | | | 132 | | | 495 | | | | 350 | | | | 28 | Revaluation of contingent liability | | (2 | ) | | | — | | | (2 | ) | | | — | | | | — | Gain on sale of company-owned stores | | 7 | | | | — | | | 21 | | | | — | | | | — | Operating income | | 48 | | | | 58 | | | 126 | | | | 168 | | | | — | Interest expense, net | | 25 | | | | 26 | | | 83 | | | | 63 | | | | 4 | Loss on debt extinguishment | | 6 | | | | — | | | 13 | | | | — | | | | — | Income (loss) before income tax expense | | 17 | | | | 32 | | | 30 | | | | 105 | | | | (4 | ) Income tax expense | | 7 | | | | — | | | 7 | | | | — | | | | — | Net income (loss) | $ | 10 | | | $ | 32 | | $ | 23 | | | $ | 105 | | | $ | (4 | ) Less: Net income (loss) attributable to Jersey Mike's Holdings prior to the Reorganization Transactions | | 23 | | | | 32 | | | 36 | | | | 105 | | | | (4 | ) Less: Net loss attributable to noncontrolling interest | | (2 | ) | | | — | | | (2 | ) | | | — | | | | — | Net loss attributable to Jersey Mike's Subs Inc. | $ | (11 | ) | | $ | — | | $ | (11 | ) | | $ | — | | | $ | — | | | | | | | | | | | Loss per share attributable to Jersey Mike's Subs Inc. (a) | | | | | | | | | | Basic | $ | (0.05 | ) | | | N/A | | $ | (0.05 | ) | | | N/A | | | | N/A | Diluted | $ | (0.05 | ) | | | N/A | | $ | (0.05 | ) | | | N/A | | | | N/A | | | | | | | | | | | Weighted-average shares of Class A common stock outstanding (a) | | | | | | | | | | Basic | | 233 | | | | N/A | | | 233 | | | | N/A | | | | N/A | Diluted | | 318 | | | | N/A | | | 318 | | | | N/A | | | | N/A | (a) | Represents earnings per share of Class A common stock and weighted-average shares of Class A common stock outstanding for the period from July 31, 2026 through September 27, 2026, the period following the Reorganization Transactions and IPO. Earnings per share information is not presented for periods prior to the IPO because the Company's capital structure before the Reorganization Transactions is not comparable. Table 2JERSEY MIKE'S SUBS INC. AND SUBSIDIARIESCondensed Cash Flows(in millions)(Unaudited) | | | | | Successor | | | Predecessor | Thirty-Nine Weeks Ended September 27, 2026 | | Period from January 16 to September 28, 2025 | | | Period from January 1 to January 15, 2025 | | | Cash flows from operating activities: | | | | | | Net income (loss) | $ | 23 | | | $ | 105 | | | | $ | (4 | ) Depreciation and amortization | | 77 | | | | 71 | | | | | — | Changes in operating assets and liabilities | | 23 | | | | 6 | | | | | 4 | Payment of assumed transaction bonus liability | | — | | | | (411 | ) | | | | — | Other, net | | 54 | | | | 22 | | | | | — | Net cash provided by (used in) operating activities | | 177 | | | | (207 | ) | | | | — | Cash flows from investing activities: | | | | | | Capital expenditures | | (7 | ) | | | (9 | ) | | | | — | Net proceeds from sale of stores | | 4 | | | | — | | | | | — | Other | | 2 | | | | 2 | | | | | 5 | Net cash provided by (used in) investing activities | | (1 | ) | | | (7 | ) | | | | 5 | Cash flows from financing activities: | | | | | | Proceeds from issuance of long-term debt | | 760 | | | | 400 | | | | | — | Proceeds from issuance of Class A common stock in initial public offering, net of underwriting discounts and commissions | | 301 | | | | — | | | | | — | Payments on long-term debt | | (1,053 | ) | | | (12 | ) | | | | — | Debt issuance costs | | (15 | ) | | | (9 | ) | | | | — | Members' distributions, net prior to the Reorganization Transactions | | (78 | ) | | | (481 | ) | | | | 14 | Distribution to noncontrolling interest | | (12 | ) | | | — | | | | | — | Net cash provided by (used in) financing activities | | (97 | ) | | | (102 | ) | | | | 14 | Net increase (decrease) in cash, cash equivalents, and restricted cash | $ | 79 | | | $ | (316 | ) | | | $ | 19 | Cash, cash equivalents, and restricted cash at beginning of the period | | 246 | | | | 572 | | | | | 843 | Cash, cash equivalents, and restricted cash at end of the period | $ | 325 | | | $ | 256 | | | | $ | 862 | Table 3JERSEY MIKE'S SUBS INC. AND SUBSIDIARIESBalance Sheet Summary(in millions)(Unaudited) | | | | | | As of | | As of | | September 27, 2026 | | December 28, 2025 Assets | | | | Cash, cash equivalents, and restricted cash | | $ | 325 | | $ | 246 Accounts receivable, net | | | 33 | | | 41 Property and equipment, net | | | 9 | | | 9 Trade name and other intangible assets, net | | | 7,774 | | | 7,824 Deferred tax assets | | | 278 | | | — Other current and noncurrent assets | | | 52 | | | 61 Total assets | | $ | 8,471 | | $ | 8,181 | | | | Liabilities and equity | | | | Total debt | | $ | 1,798 | | $ | 2,084 Other current liabilities | | | 134 | | | 129 Other non-current liabilities | | | 300 | | | 65 TRA liability | | | 1,369 | | | — Total liabilities | | | 3,601 | | | 2,278 | | | | Total stockholders' equity attributable to Jersey Mike's Subs Inc. | | | 3,298 | | | — Members' equity (pre-Reorganization) | | | — | | | 5,903 Noncontrolling interest | | | 1,572 | | | — Total equity | | | 4,870 | | | 5,903 Total liabilities and equity | | $ | 8,471 | | $ | 8,181 Table 4JERSEY MIKE'S SUBS INC. AND SUBSIDIARIESNon-GAAP Reconciliations(in millions)(Unaudited) The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA for the periods presented. Adjusted EBITDA is not a measure that is required to be disclosed by U.S. generally accepted accounting principles ("GAAP") and should not be considered in isolation, or as a substitute for our results as reported under GAAP. The Company believes this non-GAAP measure provides useful information to investors about the financial condition and results of operations because this measure is used by its management team to assess operating performance, evaluate trends, and compare results with those of other restaurant companies. We believe this measure provides useful insight into our ability to generate earnings from core operations and to inform decisions related to budgeting, capital allocation, and debt servicing. The table also sets forth a reconciliation of general and administrative expenses to Adjusted G&A, which excludes the items described in footnotes (a) through (f) that are included within general and administrative expenses presented on the Condensed Statement of Operations. Management believes Adjusted G&A provides useful information about the ongoing cost of our corporate support structure, excluding items it does not consider indicative of ongoing operating performance. | Successor | | | Predecessor | Thirteen Weeks Ended | | Thirty-Nine Weeks Ended September 27, 2026 | | Period from January 16 to September 28, 2025 | | | Period from January 1 to January 15, 2025 (in millions) | September 27, 2026 | | September 28, 2025 | | | | Net income (loss) | $ | 10 | | | $ | 32 | | | $ | 23 | | | $ | 105 | | | | $ | (4 | ) Add back: | | | | | | | | | | Interest expense | | 28 | | | | 29 | | | | 89 | | | | 71 | | | | | 5 | Interest income | | (3 | ) | | | (3 | ) | | | (6 | ) | | | (8 | ) | | | | (1 | ) Income tax expense | | 7 | | | | — | | | | 7 | | | | — | | | | | — | Depreciation and amortization | | 26 | | | | 25 | | | | 77 | | | | 71 | | | | | — | Equity-based compensation expense(a) | | 37 | | | | 7 | | | | 43 | | | | 7 | | | | | — | Acquisition-related expenses(b) | | — | | | | — | | | | — | | | | — | | | | | 1 | IPO-related expenses(c) | | 17 | | | | 1 | | | | 30 | | | | 1 | | | | | — | Founder-related discretionary expenses(d) | | — | | | | — | | | | — | | | | — | | | | | 11 | Area Director buyouts(e) | | — | | | | 10 | | | | 52 | | | | 14 | | | | | — | Corporate transition and other expenses(f) | | 2 | | | | 3 | | | | 14 | | | | 6 | | | | | — | Loss on debt extinguishment | | 6 | | | | — | | | | 13 | | | | — | | | | | — | Revaluation of contingent liability(g) | | 2 | | | | — | | | | 2 | | | | — | | | | | — | Gain on sale of company-owned stores | | (7 | ) | | | — | | | | (21 | ) | | | — | | | | | — | Adjusted EBITDA | $ | 125 | | | $ | 104 | | | $ | 323 | | | $ | 267 | | | | $ | 12 | Table 4 (continued)JERSEY MIKE'S SUBS INC. AND SUBSIDIARIESNon-GAAP Reconciliations(in millions)(Unaudited) | | | | | Successor | | | Predecessor | Thirteen Weeks Ended | | Thirty-Nine Weeks Ended September 27, 2026 | | Period from January 16 to September 28, 2025 | | | Period from January 1 to January 15, 2025 (in millions) | September 27, 2026 | | September 28, 2025 | | | | General and administrative expenses | | 87 | | | | 54 | | | | 231 | | | | 127 | | | | | 19 | Less: | | | | | | | | | | Equity-based compensation expense(a) | | (37 | ) | | | (7 | ) | | | (43 | ) | | | (7 | ) | | | | — | Acquisition-related expenses(b) | | — | | | | — | | | | — | | | | — | | | | | (1 | ) IPO-related expenses(c) | | (17 | ) | | | (1 | ) | | | (30 | ) | | | (1 | ) | | | | — | Founder-related discretionary expenses(d) | | — | | | | — | | | | — | | | | — | | | | | (11 | ) Area Director buyouts(e) | | — | | | | (10 | ) | | | (52 | ) | | | (14 | ) | | | | — | Corporate transition and other expenses(f) | | (2 | ) | | | (3 | ) | | | (14 | ) | | | (6 | ) | | | | — | Adjusted G&A | $ | 31 | | | $ | 33 | | | $ | 92 | | | $ | 99 | | | | $ | 7 | (a) | Represents non-cash expense and related payroll taxes associated with equity incentive compensation; included within G&A. (b) | Represents costs incurred in connection with the Sponsor Acquisition (as defined in our filings with the SEC), included within G&A. (c) | Represents legal, consulting, accounting and other professional fees associated with preparing for the IPO, included within G&A. These expenses do not include ongoing public-company compliance or operational costs. (d) | Represents certain historical expenses that are a legacy of the Company's operations as a private, founder-led organization, including large, founder-directed discretionary bonuses paid to certain individuals and charitable donations, that by their nature have not recurred and are not expected to recur after the Sponsor Acquisition. Included in G&A. (e) | Represents payments made to third-party Area Directors to terminate certain contracts that mandated payment of a percentage of gross sales for a geographic region. The final Area Director buyout was completed in the second quarter of fiscal 2026. Included in G&A. (f) | Represents expenses incurred in connection with restructuring our operations to a corporate-led business, including severance and settlement payments. Included in G&A. (g) | Represents the change in the value of the contingent consideration liability for the earnout related to the Sponsor Acquisition that is payable when Jersey Mike's worldwide store count reaches 4,000 stores or upon a change of control event. The liability is remeasured each period until the earnout is paid, and the revaluation is recorded in operating income and presented separately in the Condensed Statement of Operations. Table 5JERSEY MIKE'S SUBS INC. AND SUBSIDIARIESAdjusted Net Income, Adjusted Diluted Share Count and Adjusted EPS(in millions, except per share data)(Unaudited) The following tables set forth reconciliations of net income (loss) to Adjusted Net Income, and of diluted earnings per share of Class A common stock to Adjusted EPS, together with a reconciliation of weighted-average shares of Class A common stock outstanding to Adjusted Diluted Share Count, for the periods presented. Adjusted Net Income, Adjusted Diluted Share Count and Adjusted EPS are not measures required by GAAP and should not be considered in isolation or as substitutes for net income, diluted earnings per share or weighted-average shares of Class A common stock, as reported under GAAP. We believe these non-GAAP measures provide useful information to investors because they present our results on a fully exchanged and fully taxed basis, without regard to changes in our ownership interest in Jersey Mike's Holdings, and exclude items management does not consider indicative of ongoing operating performance. Management uses these measures, together with Adjusted EBITDA, to evaluate our operating performance. | Successor | | | Predecessor | Thirteen Weeks Ended | | Thirty-Nine Weeks Ended September 27, 2026 | | Period from January 16 to September 28, 2025 | | | Period from January 1 to January 15, 2025 (in millions) | September 27, 2026 | | September 28, 2025 | | | | Net income (loss) | | 10 | | | | 32 | | | 23 | | | | 105 | | | | (4 | ) Add back: | | | | | | | | | | Income tax expense | | 7 | | | | — | | | 7 | | | | — | | | | — | Equity-based compensation expense(a) | | 37 | | | | 7 | | | 43 | | | | 7 | | | | — | Acquisition-related expenses(b) | | — | | | | — | | | — | | | | — | | | | 1 | IPO-related expenses(c) | | 17 | | | | 1 | | | 30 | | | | 1 | | | | — | Founder-related discretionary expenses(d) | | — | | | | — | | | — | | | | — | | | | 11 | Area Director buyouts(e) | | — | | | | 10 | | | 52 | | | | 14 | | | | — | Corporate transition and other expenses(f) | | 2 | | | | 3 | | | 14 | | | | 6 | | | | — | Loss on debt extinguishment | | 6 | | | | — | | | 13 | | | | — | | | | — | Revaluation of contingent liability(g) | | 2 | | | | — | | | 2 | | | | — | | | | — | Amortization of acquired intangible assets(h) | | 25 | | | | 24 | | | 74 | | | | 68 | | | | — | Gain on sale of company-owned stores | | (7 | ) | | | — | | | (21 | ) | | | — | | | | — | Adjusted income before income taxes | | 99 | | | | 77 | | | 237 | | | | 201 | | | | 8 | Less: adjusted income tax expense(i) | | 25 | | | | 19 | | | 59 | | | | 50 | | | | 2 | Adjusted Net Income | $ | 74 | | | $ | 58 | | $ | 178 | | | $ | 151 | | | $ | 6 | Share count (in millions): | | | | | | | | | | Weighted-average shares of Class A common stock outstanding – basic(j) | | 233.1 | | | | N/A | | | 233.1 | | | | N/A | | | | N/A | Exchange of Common Units(k) | | 84.5 | | | | N/A | | | 84.5 | | | | N/A | | | | N/A | Weighted-average shares of Class A common stock, assuming exchange of all Common Units | | 317.6 | | | | N/A | | | 317.6 | | | | N/A | | | | N/A | Dilutive effect of Incentive Units, on a net-converted basis(l) | | 0.8 | | | | N/A | | | 0.8 | | | | N/A | | | | N/A | Adjusted diluted share count(m) | | 318.4 | | | | N/A | | | 318.4 | | | | N/A | | | | N/A | Per share of Class A common stock – diluted: | | | | | | | | | | Diluted EPS of Class A common stock (GAAP) | $ | (0.05 | ) | | | N/A | | $ | (0.05 | ) | | | N/A | | | | N/A | Reallocation of pre-Reorganization net income | $ | 0.07 | | | | N/A | | $ | 0.11 | | | | N/A | | | | N/A | Non-GAAP adjustments, net of adjusted income taxes | $ | 0.21 | | | | N/A | | $ | 0.50 | | | | N/A | | | | N/A | Adjusted EPS | $ | 0.23 | | | | N/A | | $ | 0.56 | | | | N/A | | | | N/A | Table 5 (continued)JERSEY MIKE'S SUBS INC. AND SUBSIDIARIESAdjusted Net Income, Adjusted Diluted Share Count and Adjusted EPS(in millions, except per share data)(Unaudited) (a) | Represents non-cash expense and related payroll taxes associated with equity incentive compensation; included within G&A. (b) | Represents costs incurred in connection with the Sponsor Acquisition (as defined in our filings with the SEC), included within G&A. (c) | Represents legal, consulting, accounting and other professional fees associated with preparing for the IPO, included within G&A. These expenses do not include ongoing public-company compliance or operational costs. (d) | Represents certain historical expenses that are a legacy of the Company's operations as a private, founder-led organization, including large, founder-directed discretionary bonuses paid to certain individuals and charitable donations, that by their nature have not recurred and are not expected to recur after the Sponsor Acquisition. Included in G&A. (e) | Represents payments made to third-party Area Directors to terminate certain contracts that mandated payment of a percentage of gross sales for a geographic region. The final Area Director buyout was completed in the second quarter of fiscal 2026. Included in G&A. (f) | Represents expenses incurred in connection with restructuring our operations to a corporate-led business, including severance and settlement payments. Included in G&A. (g) | Represents the change in the value of the contingent consideration liability for the earnout related to the Sponsor Acquisition that is payable when Jersey Mike's worldwide store count reaches 4,000 stores or upon a change of control event. The liability is remeasured each period until the earnout is paid, and the revaluation is recorded in operating income and presented separately in the Condensed Statement of Operations. (h) | Represents non-cash amortization of acquired intangible assets, consisting of franchise agreements recognized in connection with the Sponsor Acquisition and reacquired franchise rights recognized in connection with purchases of stores from franchise owners; included within depreciation and amortization. Although we exclude amortization of acquired intangible assets from Adjusted Net Income, these intangible assets contribute to revenue generation, and the related amortization will recur in future periods until the assets are fully amortized. Revenue generated by these assets is not excluded from Adjusted Net Income. (i) | Represents income taxes at an assumed blended effective tax rate of 25%, applied to adjusted income before income taxes. The 25% rate reflects our estimated long-term effective tax rate, considering blended U.S. federal and state statutory rates, as if Jersey Mike's Subs Inc. owned 100% of Jersey Mike's Holdings and were subject to corporate income taxes on all of its income for all periods presented, including periods prior to the Reorganization Transactions, when Jersey Mike's Holdings was treated as a partnership for U.S. federal income tax purposes. The assumed rate excludes the impact of the tax receivable agreement and the tax attributes it covers, including our allocable share of existing tax basis in certain assets of Jersey Mike's Holdings, tax basis adjustments resulting from sales or exchanges of Common Units and certain tax attributes of the entities through which pre-IPO owners held their interests, as well as other discrete items. As a result of these tax attributes, we expect our cash income taxes to be significantly lower than the assumed rate for a number of years. Although we are required to pay 90% of certain of those tax benefits that we actually realize to certain of our pre-IPO owners under the tax receivable agreement, we retain the remaining 10%. Reflecting that retained benefit could result in a lower assumed rate. Because the amount and timing of that benefit depend on future exchanges of Common Units, we cannot yet reasonably estimate our future taxable income and other factors; therefore, it is not reflected in the assumed rate. We believe a long-term effective tax rate provides a more consistent measure of our core operating profitability across periods. (j) | Represents weighted-average shares of Class A common stock outstanding as reported under GAAP for the period from July 31, 2026 through September 27, 2026, the period following the Reorganization Transactions and IPO, which is the same for the thirteen and thirty-nine weeks ended September 27, 2026. (k) | Assumes the exchange of all outstanding Common Units held by the Continuing Common Unitholders, and the cancellation of the corresponding shares of Class B common stock, for shares of Class A common stock on a one-for-one basis under the amended and restated limited liability company agreement of Jersey Mike's Holdings, as of the beginning of fiscal 2026. (l) | Assumes that all 13.5 million outstanding Incentive Units, vested and unvested, with a weighted-average participation threshold of $19.74 per unit, were converted into Common Units based on the average closing price of the Class A common stock since the IPO of $21.50, and that those Common Units were exchanged for shares of Class A common stock, whether or not the Incentive Units are dilutive under GAAP. (m) | Because the IPO and the Reorganization Transactions were completed during the third quarter of fiscal 2026, Adjusted EPS for both the thirteen and thirty-nine weeks ended September 27, 2026 is calculated using a single share count that assumes the IPO and the Reorganization Transactions occurred at the beginning of fiscal 2026. The shares of Class A common stock issued in the IPO and the Reorganization Transactions are therefore treated as outstanding for the entire period. A reconciliation of this share count to weighted-average shares of Class A common stock outstanding as reported under GAAP is presented in the table above. Table 6JERSEY MIKE'S SUBS INC. AND SUBSIDIARIESTerms and Definitions Adjusted Diluted Share Count - Represents weighted-average shares of Class A common stock outstanding – diluted, adjusted to (i) treat the shares of Class A common stock issued in the IPO and the Reorganization Transactions as outstanding from the beginning of each period presented; (ii) assume the exchange of all outstanding Common Units (and the cancellation of the corresponding shares of Class B common stock) for shares of Class A common stock; and (iii) include the dilutive effect of all outstanding vested and unvested Incentive Units on a net-converted basis using the average closing price of the Class A common stock for the period, and of restricted stock units and stock options using the treasury stock method, in each case whether or not such securities are dilutive under GAAP. Adjusted EBITDA - Defined as net income plus (i) interest expense, net of interest income; (ii) income tax expense; (iii) depreciation and amortization; (iv) equity-based compensation and related payroll taxes; (v) acquisition-related expenses; (vi) IPO-related expenses; (vii) founder-related discretionary expenses that by their nature have not recurred and are not expected to recur in periods following the Sponsor Acquisition; (viii) Area Director buyouts; (ix) corporate transition (severance, early contract termination, etc.) and other expenses; (x) loss on debt extinguishment; and (xi) the revaluation of the contingent liability; less (xii) gain on sale of company-owned stores. Adjusted EBITDA is a non-GAAP financial measure. Adjusted EPS - Defined as Adjusted Net Income divided by Adjusted Diluted Share Count. Adjusted EPS is a non-GAAP financial measure. Adjusted G&A - Defined as general and administrative expenses excluding (i) equity-based compensation and related payroll taxes; (ii) acquisition-related expenses; (iii) IPO-related expenses; (iv) founder-related discretionary expenses; (v) Area Director buyouts; and (vi) corporate transition and other expenses, in each case to the extent included within general and administrative expenses. Adjusted G&A is a non-GAAP financial measure. Adjusted Net Income - Defined as net income plus (i) income tax expense; (ii) amortization of acquired intangible assets; and (iii) the other items excluded from Adjusted EBITDA, except for interest expense, net and depreciation; less adjusted income tax expense, computed at an assumed blended effective tax rate of 25% applied to adjusted income before income taxes, as if Jersey Mike's Subs Inc. owned 100% of Jersey Mike's Holdings and were subject to corporate income taxes on all of its income for all periods presented. Adjusted Net Income is a non-GAAP financial measure. Average Unit Volume (AUV) - Represents (i) the trailing 364 days sales of stores in the comparable store base, divided by (ii) the number of operating days of comparable stores in the same period, multiplied by (iii) 364. Operating days is equal to the number of days the store was open for business. The calculation of Average Unit Volume excludes both non-traditional stores and any traditional stores that have been open for less than 425 days. Common Units, Incentive Units and Continuing Unitholders - Common Units refers to the common units of Jersey Mike's Holdings, which, together with an equal number of shares of Class B common stock, are exchangeable for shares of Class A common stock on a one-for-one basis. Incentive Units refers to the incentive units of Jersey Mike's Holdings, which have economic characteristics similar to stock appreciation rights and share in the equity value of Jersey Mike's Holdings above specified participation thresholds, and which may be converted into Common Units based on that value. Continuing Unitholders refers collectively to the Continuing Common Unitholders and the Continuing Incentive Unitholders, the pre-IPO owners that continue to hold Common Units or Incentive Units, respectively, following the Reorganization Transactions. Digital Sales Mix - Represents the percentage of Systemwide Sales that are generated through our digital channels (mobile app, online ordering, and third-party delivery) and measures the performance of our investments made in the digital platform and partnerships with third-party delivery partners. IPO - Refers to the initial public offering of Class A common stock of Jersey Mike's Subs Inc., which closed on July 31, 2026. Table 6 (continued)JERSEY MIKE'S SUBS INC. AND SUBSIDIARIESTerms and Definitions Jersey Mike's Holdings - Refers to Jersey Mike's HoldCo, LLC, of which Jersey Mike's Subs Inc. is the sole managing member following the Reorganization Transactions. Net Store Growth - Represents (i) the total number of open stores as of a specific date divided by (ii) total number of open stores in the prior annual period, (iii) minus one. New Store Openings - Represents the number of gross store openings in a period including franchised and company-owned stores. Reorganization Transactions - Refers to the series of transactions completed in connection with the IPO, as described in our final prospectus, as a result of which Jersey Mike's Subs Inc. became the sole managing member of, and consolidates, Jersey Mike's Holdings. Same-Store Sales Growth – Represents the change in year-over-year sales for the same store base on a constant-currency basis. We define the same-store base to include those traditional stores (whether company-owned or franchised) open for at least 425 days (14 calendar months). This measure highlights the performance of existing traditional stores, while excluding the impact of new traditional store openings and permanent closures. Same-Store Sales Growth is driven by increases in transactions and average check. Average check increases are driven by price increases or favorable mix shift from either an increase in items purchased or shifts into higher-priced items. Non-traditional stores, which are not included in Same-Store Sales Growth, include locations or operating models materially different than a standard Jersey Mike's location, including kiosks, airports, colleges, commissaries, food courts, entertainment venues, etc., which make comparability year-over-year difficult or not meaningful. Sponsor - Refers to investment funds associated with Blackstone Inc. Sponsor Acquisition - Refers to the acquisition on January 16, 2025 by our Sponsor of a majority interest in Jersey Mike's Holdings, including to indirectly hold 100% of the equity interests of Jersey Mike's Franchise Systems, LLC. Systemwide Sales – Represents net sales for all Jersey Mike's stores. This measure allows management to better assess our overall store performance, the health of our brand and the strength of our market position compared to competitors. Our systemwide sales growth is driven by the number and sales volume of new store openings as well as Same-Store Sales Growth. Note that Systemwide Sales do not reflect our revenue and should not be viewed as a substitute for Total revenues discussed below. Tax Receivable Agreement ("TRA") - Refers to the tax receivable agreement we entered into in connection with the IPO, under which we are required to pay certain of our pre-IPO owners 90% of certain tax benefits, if any, that we actually realize. Total Revenues - Reflects royalty and advertising revenue derived from Systemwide Sales across our franchised store base, supplemented by contributions from company-operated locations, as well as other revenues such as supplier program payments, upfront development and franchise fees, technology fees and gift card income. Total Stores - Represents the number of stores in our system as of the relevant measurement date, including both company-owned and franchised stores and traditional and non-traditional stores. View source version on businesswire.com: https://www.businesswire.com/news/home/20261028014143/en/ Contacts Media Contact - [email protected] Investor Contact - [email protected]

- Interested in Barclays PLC? Here are five stocks we like better. - Strong Q3 performance: Barclays' income rose 3% to £7.4 billion and profit before tax increased 12% to £2.3 billion. The results supported a new £500 million share buyback, bringing year-to-date shareholder distributions to £2.8 billion. - U.K. lending and efficiency drive growth: U.K. lending increased 7%, while Barclays expects more than £1.1 billion in gross efficiency savings in 2027, including a workforce reduction of about 5,000 employees and Tesco Bank synergies. - Investment Bank mix was uneven: A 47% surge in equities revenue offset weaker fixed-income, currency and commodities intermediation, leaving Investment Bank income broadly unchanged year over year and producing a 9.5% quarterly RoTE. - Jersey Mike's Serves Fresh Gains After IPO Stumble Barclays (NYSE:BCS) reported third-quarter income of £7.4 billion, up 3% from a year earlier, while profit before tax rose 12% to £2.3 billion. The bank said its return on tangible equity, or RoTE, was 11.7% for the quarter and 13.8% year-to-date, supporting a new £500 million share buyback. Group Chief Executive C.S. Venkatakrishnan said the additional repurchase brings year-to-date shareholder distributions to £2.8 billion, a 47% increase from the same period a year ago. Barclays said it remains confident of delivering a group RoTE above 12% in 2026, having produced 12.4% over the past 12 months. → Aurora Rejects Curaleaf's Higher Bid, But the Takeover Fight Isn't Over - Buyback Accelerators: 3 Stocks Boosting Capacity & Spending Speed The bank's cost-income ratio improved to 62% in the third quarter and 57% year-to-date. Earnings per share increased 18% year-over-year in the quarter, and Barclays said it remains on track for a third consecutive year of 20% earnings-per-share growth. Group Finance Director Anna Cross said third-quarter income growth kept Barclays on track for its approximately £31.5 billion income target for 2026. The target would represent roughly 8% growth from 2025, ahead of the bank's target of more than 5% compound annual revenue growth through 2028. → Could Quantinuum's Breakthrough Make Its Sell-Off a Bargain? - 3 Surprising Earnings Winners Changing Their Market Narrative Net interest income rose 7% year-over-year in the third quarter. Cross said the bank expects continued growth from its structural hedge and lending momentum. Average swap rates of 4.2% year-to-date exceeded Barclays' 3.5% planning assumption, and the bank said hedge income is likely to increase through at least 2030 under prevailing and expected swap rates. Total U.K. lending grew 7% from a year earlier. Mortgage balances increased 7%, supported by £11 billion in gross lending during the quarter, while corporate and business banking lending rose 13%, excluding the run-off portfolio. Barclays said it has deployed £28 billion of U.K. business-growth risk-weighted assets toward its approximately £30 billion three-year target through 2026. → IonQ's Bold Expansion Could Leave Shareholders Paying the Price In Barclays UK, third-quarter RoTE was 21.2%, while income increased 4% and net interest income rose 6% to £2.1 billion. U.K. Corporate Bank reported a 23.5% quarterly RoTE, with income and costs each rising 10%. Lending in that division grew 14%, while its loan-to-deposit ratio reached 38%. Private Bank and Wealth Management produced a 23.8% quarterly RoTE. Assets under management increased 10% year-over-year, including £2.5 billion in year-to-date net new assets under management. Barclays provided additional detail on its efficiency plans, distinguishing between costs to run the bank and strategic investments intended to increase future returns. Cross said the bank expects 2026 exit-rate costs of about £18 billion, while statutory costs are expected to be approximately £18.5 billion for the full year, including motor finance provisions, changes to material risk-taker compensation and planned second-half restructuring spending. For 2027, Barclays expects statutory costs to decline to about £18.4 billion. Run-the-bank costs are expected to be flat or lower compared with 2026, creating capacity for £400 million of additional planned investment. The bank expects more than £1.1 billion of gross efficiency savings in 2027, compared with around £700 million annually over the past two years. Those actions are expected to reduce the workforce by about 5,000 full-time employees, with roughly 60% of the measures affecting support functions. - Barclays UK call-center volumes declined 10% over the past year after customer-facing technology improvements. - Employees per branch fell about 10% as the bank adjusted its branch staffing model. - Integration of Tesco Bank is expected to generate around £200 million of cost synergies, largely split between 2027 and 2028. Cross said Barclays UK's cost-income ratio is expected to be in the high 40s in 2027 before declining to the mid-40s in 2028. At the group level, Barclays reiterated its expectation of a low-50s cost-income ratio by 2028. The Investment Bank generated a 9.5% RoTE in the third quarter, with income broadly unchanged from a year earlier. In U.S. dollar terms, markets income increased 4%, as a 47% increase in equities revenue offset weaker fixed-income, currency and commodities intermediation. Equities represented half of third-quarter markets income, aided by strong equity derivatives activity and growth in prime financing. Investment banking fees rose 2%, as advisory and equity capital markets activity offset lower debt capital markets fees. Venkatakrishnan described fixed-income intermediation as "somewhat disappointing," citing lower client activity in European rates and parts of credit during the latter part of the quarter. He said there were no particular marks or trading positions to call out and maintained that the fixed-income franchise remained strong. Barclays said it has increased income relative to average Investment Bank risk-weighted assets by 130 basis points since 2023, reaching 6.8% over the past 12 months. The bank has kept Investment Bank risk-weighted assets broadly within a £195 billion to £205 billion range since 2022. Barclays ended the quarter with a 14.2% common equity tier 1 ratio. The bank said expected Basel 3.1 implementation will add £8 billion to £15 billion of risk-weighted assets, equivalent to 30 to 55 basis points of CET1 capital. However, greater clarity on Pillar 2A requirements is expected to reduce its maximum distributable amount threshold by 59 basis points, more than offsetting the Basel impact. Cross said Barclays will provide an update on its CET1 operating level within the 13% to 14% range when it reports full-year results. She added that the bank expects to maintain an appropriate buffer above its maximum distributable amount threshold. In the U.S. Consumer Bank, quarterly RoTE was 10.9% and income rose 1%. Net interest income increased 3%, while costs rose 14%, reflecting a full quarter of Best Egg expenses. Barclays reiterated its expectation for about 12% RoTE in the division for 2026, excluding the gain from the American Airlines portfolio sale. Venkatakrishnan said Barclays is entering the next phase of its strategy with a focus on lower unit costs through data standardization, infrastructure modernization, process harmonization and broader use of artificial intelligence. "AI is the icing on the cake, not the cake," he said, emphasizing that the technology efforts depend on underlying investments in systems and processes. Barclays PLC is a diversified financial services company headquartered in London, England. Through its banking and financial services businesses, the company serves individuals, businesses, institutions and governments in the United Kingdom, the United States and other international markets. Its principal activities include consumer and business banking, current and savings accounts, mortgages, personal loans, credit cards and payment services. Barclays also provides private banking and wealth management services, including investment management, financial planning and lending for high-net-worth clients. Through its corporate and investment banking operations, Barclays offers corporate lending, transaction banking, financial advice, securities underwriting, sales and trading, research and capital-markets services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Barclays Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.