Jersey Mike's Subs Inc. needs to win over Generation Z diners to sustain its growth, according to a Wall Street Journal report, as roughly 70% of its customers skew toward older, more established diners. CEO Charlie Morrison, the former Wingstop chief, has said the company must be more proactive about reaching younger customers as it competes against fast-casual chains that already dominate that demographic. The Blackstone-backed sandwich chain, which went public in July, reported second-quarter same-store sales up 2.3% on higher transactions, while systemwide sales rose 10% to $1.21 billion, and management expects third-quarter same-store sales to increase 3%-4%. Gen X and Baby Boomers account for about 70% of customers while Gen Z represents only 2%, and second-quarter net income fell 37% to $37 million as higher general and administrative expenses, advertising spending, and interest expense weighed on earnings. Jersey Mike's has increased digital marketing from less than 1% to more than 20% of total marketing spending, with loyalty registrations up 22% year to date, but it still must close the gap to its $2 million average-unit-volume target after reporting AUV of $1.376 million in the second quarter.
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Jersey Mike's Subs Inc.Second-quarter net income fell 37% to $37 million on higher G&A, advertising, and interest expense