Subway Rival Enjoys Spike In Popularity, Plus: Potbelly's Tasty Stock Performance

The sub — or submarine sandwich — continues to be a popular food item across the U.S.

Witness the massive scale of Subway, one of the world’s largest restaurant operators. But it’s not just size that matters — location plays a large role in the success or failure of such enterprises.

Placer.ai, the business location analytics company, has been watching the rising success of Subway rival Jersey Mike’s Subs.

“Jersey Mike’s is among the nation’s fastest-growing franchise dining chains,” the analyst said. “Our data shows that the company targets affluent suburbs successfully.”

Indeed, Placer.ai’s data shows that across its 2,000 or so locations, Jersey Mike’s is attracting affluent clientele.

The data suggest that 11.8% of Jersey Mike’s diners are defined as “prosperous, established couples in their peak earning years living in suburban homes. That compares with 8.4% of all other sub-sandwich chains.”

Meanwhile, “affluent middle-aged families and couples” make up 7.5% of its customers, compared with 5.6% for other chains.

Also Read: Why Fast Casual Restaurant Chain Shake Shack Shares Are Shooting Higher Today

Jersey Mike’s is privately owned under the helm of CEO Peter Cancro. Private equity group Roark Capital Management controls Subway. Whether Subway’s owner considers an initial public offering remains to be seen.

Meanwhile, shares in the fast food segment are currently doing well:

• Shares in Potbelly Corporation PBPB are up 20.5% in 2024 so far. The chain gained 125% since the start of 2023. Interim results recently showed sales growth of around 6% and average weekly sales of around $24,900. It reports its fully audited earnings next month.

• Shake Shack Inc. SHAK shares jumped 26% on Thursday, and are up nearly 34% over the year so far. Since the start of 2023, they have soared 139%. The burger chain reported a 20% rise in fourth-quarter revenue to $286.2 million on Thursday, beating consensus expectations of $280.3 million. The company beat adjusted earnings of $31.4 million. It increased its net margin to 11% from 8.2%.

• Earlier this month, Chipotle Mexican Grill Inc. CMG reported fourth-quarter revenue rose 15.4% to $2.5 billion and a 27.3% rise in diluted earnings per share — both beating Street consensus estimates. Its operating margin grew to 14.4% from 13.6% a year earlier. Chipotle’s shares were up 7.2% on the day, and are up 14.1% year to date. Since the start of 2023, the shares have climbed 88.2%. Chipotle, which currently owns around 2,000 locations in North America, has set its long-term goal of reaching 7,000.

By comparison, the Invesco Food & Beverage ETF PBJ, an exchange-traded fund that holds both Shake Shack and Chipotle, is down 1% since the start of 2024.

Slightly better performing has been the AdvisorShares Restaurant ETF EATZ, which carries all three of the above stocks, along with other chains such as Domino’s Pizza DPZ. EATZ is up 2.3% this year, and up 29% since the start of 2023.

Now Read: Chipotle Mexican Grill Q4 Earnings Highlights: Revenue Beat, EPS Beat, Guidance And Unit Count Updates

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