Subway on Monday announced its ninth straight quarter of positive same-store sales as a potential purchase moves forward.
The world's largest sandwich chain experienced positive traffic and double-digit growth in systemwide comps in Q1, which it attributed to menu innovation, modernized restaurants, and digital improvements. First-quarter same-store sales increased 12.1 percent year-over-year, and digital sales grew 11.4 percent. Global digital sales have more than quadrupled since the start of 2019.
In North America, comps rose 11.7 percent, with the top 75 percent of locations (17,000 stores) up 17.9 percent compared to last year. The top 50 percent (11,500 units) saw same-store sales lift 24.4 percent versus 2022. Digital sales increased 21.2 percent versus Q1 2022.
The momentum continued into Q2. To start April, Subway accomplished its highest weekly U.S. AUV since 2010.
"Our continued impressive performance demonstrates that our efforts to build a better Subway and win back the hearts and minds of sandwich lovers around the globe is working," CEO John Chidsey said in a statement. “With strong sales momentum across our restaurants and a refreshed focus on strategic brand growth, there has never been a more exciting time to be part of the Subway brand.”
The news comes a week after Subway revealed five new multi-unit franchise agreements in Texas, Florida, Arizona, and the Mid-Atlantic. The deals involve the consolidation and transfer of more than 230 existing stores as well as the remodeling and opening of new restaurants. Two new operators joined the fold, and one current franchisee added more than 100 units to build their portfolio to 140-plus outlets. Subway plans to increase North America openings by 35 percent in 2023 year-over-year. Also, 3,600 stores will be remodeled, bringing the total to more than 10,000 by summertime. Systemwide, Subway opened nearly 750 new restaurants in 2022 and 145 stores in Q1.
As Subway plows ahead, so does its sales process. The Wall Street Journal reported earlier in April that it's moving to a second round of bidding and that a buyer could be revealed in May. The first round reportedly occurred in March and several bidders were excluded because of low offers. Earlier this year, the Journal reported that Subway is valuing itself at more than $10 billion. The publication prefaced that there isn't a guarantee the sandwich chain will be sold for that much or that a transaction will happen at all. Second-round bids will likely be due at the end of this month.
Companies linked to Subway include Roark Capital Group—parent of Inspire and Focus Brands—along with Goldman Sachs, Bain Capital, TDR Capital, TSG Consumer Partners, and TPG.