Hello!

Today we’re covering:

• The continued Starbucks turnaround

• Cracker Barrel’s new CEO

• And Frosty tote bags

Read on…

3 Numbers

$1 billion

Amount Jersey Mike's raised Thursday, the largest restaurant IPO since Krispy Kreme's $500M in 2021. But did they fully Bring the Juice on their first trading day? Eh. More on that in the Big Story below.

7.9%

Same-store sales growth for Starbucks last quarter, marking the fourth straight quarter of comparable sales growth for the company. Among other improvements, CEO Brian Niccol cited cafe renovations as directly contributing to the Starbucks turnaround. (People like to drink coffee in a nice environment — who knew?!)

2 seconds

How long Wendy's loyalty members took to claim all 20 Canon cameras in the chain's first merch drop. By comparison, Frosty tote bags took a leisurely 90 seconds to sell out.

The Big Story

Alongside Eli Manning and Danny DeVito, Jersey Mike’s CEO Charlie Morrison rang the opening bell of the NYSE on Thursday. It was Morrison’s second time performing the ceremonial act (he led Wingstop when it went public in 2015), and more broadly speaking, it represented a milestone moment for the 3,300-unit chain bought by a high schooler 50 years ago.

What happened to the actual stock after it began trading?

Well…

Via Restaurant Business:

So Thursday was a bit of a mixed bag — on the one hand, for the restaurant industry, the IPO was massive and it solidified a +$7 billion valuation for Jersey Mike’s; on the other hand, the company is now only the 2nd of 25 restaurant companies to see a stock decline on its first day since 2011.

There are a few culprits as to why the stock didn’t pop:

• The company was carrying a bit of debt. Blackstone leveraged the company when buying it (just 18 months ago), and the balance sheet holds $2.1 billion in long-term debt. 13.8 million shares of the offering were earmarked for debt repayment, money that otherwise will not be spent on growing the business.

• Some of the pre-IPO reporting was suspect. Earlier this year, the company was said to be worth $12 billion, and just this week, Bloomberg reported that the offering was “10x oversubscribed.” Neither survived contact with the actual market (on day 1 at least).

• It’s not an AI company. Even though the AI and AI-adjacent companies have had some rocky moments in the public markets recently, they’re still sucking a lot of the oxygen out of the room. There are only so many dollars to go around (theoretically… new fun tricks with margin are being invented every day!), and a sub chain is not going to generate as much opening-day buzz as, say, a SpaceX or SK Hynix.

Still, I would argue very little of this matters for its long-term prospects. The fundamentals of the business remain quite good:

• AUVs are $1.4M — best-in-class for the sandwich category

• Cumulative comps from 2020 to 2025 were 50%

• It’s very profitable, it has a ton of white space, and its asset-light model is already Wall Street friendly

(And just like that, the stock closed Friday at $23.00 on the nose… right back to its IPO price.)

In the Headlines

• You can’t keep the home of the Cheesy Gordita Crunch down: Taco Bell appears to be clawing its way out of the cyclospora outbreak — parent company Yum Brands said that while comps are down 2% quarter-to-date, sales are showing steady improvement over the past 10 days.

• Chipotle beat its Q2 expectations thanks to a 2.2% same-store sales increase, a 1.2% year-over-year increase in total check size, and my personal contributions by buying a borderline concerning amount of their Honey Chicken.

• Noodles & Co posted strong 10.3% comparable sales growth in Q2, thanks partly to some solid-performing limited time offers and a number of store closures that have boosted the AUVs of nearby units.

• Wingstop, on the other hand, reported another tough quarter — comparable sales dropped 7.5%, the company’s fifth straight negative quarter. New store development continued with 102 net new store openings.

• An interesting one to watch here: 15-unit chain Biscuit Belly purchased the Maple Street Biscuit Company from Cracker Barrel with plans to convert roughly three dozen of the locations to Biscuit Belly units. Biscuit Belly will convert the stores over the next 18-24 months, tripling its footprint in the process. (16 Maple Street locations will close permanently.)

• Impress your neighbors by having your late night burrito arrive via the bleeding edge of technology: DoorDash announced that it’s earned the FAA’s air carrier certification, meaning it can now operate its own drone delivery system.

• Maybe double-check that website URL the next time you Google a restaurant menu: AI-generated websites listing inaccurate menu items are starting to dominate search results.

Name That Chain!

Let’s see how closely you’ve been reading Industry Bites this summer. You’ve got three clues to name this issue’s chain:

• Born on a Southern California beach in 1946; the founder also gave the world a famous lemonade.

• The rainbow-striped uniforms are iconic enough that you can buy them as knockoff Halloween costumes on Amazon.

• It just changed hands for $8 million in a bankruptcy auction — hot dog optional, stick included.

Find the answer at the bottom of the email…

Power Moves

Here are some notable recent C-suite moves:

• Julie Masino — who survived a shareholder vote last year after the Cracker Barrel logo saga — has ultimately been replaced as CEO. Into the spot: David Deno, who served as CEO of Outback parent company Bloomin’ Brands from 2019 to 2024.

• Torchy’s vet Ryan Moore has been tapped as Whataburger’s new CFO.

• And Daniel Duran was promoted to CFO of Fogo de Chao.

• Maria Cacciapuoti is the new COO of KFC Global.

What’s New at FS Supply

We moved! This week FS Supply relocated into a significantly bigger warehouse in Carrollton, Texas — roughly double the footprint, same crew, more racking than any reasonable person should be excited about.

The reason for the upgrade is simple: our programs keep getting bigger. More of our customers are moving from one-off orders to full portfolio runs, and those programs need room to breathe. The new space lets us say yes to larger runs, more SKUs per customer, and larger multi-location programs without blinking at the pallet count.

Thanks for reading! I’ll see you again next week.

NAME THAT CHAIN ANSWER: Hot Dog on a Stick