Tested: Wall Street's appetite for sandwiches
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Sub chain Jersey Mike's stock price closed Friday basically flat from its offer price after its first full week of public trading.
Why it matters: When it comes to lunch, sandwiches are a great choice — when it comes to investing, the evidence is less clear.
The big picture: Wall Street tends to carb load on sandwich chains, only to regret the binge later.
By the numbers: Axios looked at the stock performance of four well-known sandwich chains over the past 35 years, comparing their first-day closing price with the end of their first year trading.
- Three fell by double-digits — Quiznos (-37%), Potbelly (-61%) and Cosi (-72%).
Between the lines: Other chains, not charted, have fraught/colorful histories — Subway never went public but its struggles are well documented. Some may recall Your Hometown Deli's sordid track record.
Yes, but: Perhaps more thought of as a pastry purveyor, Au Bon Pain, which went public in 1991, is a rare exception, up 49% after one year of trading in a vastly different era for the market.
- ABP, as fans once called it, basically went on to form what's now known as Panera Bread. The soup-and-sandwich company divested the ABP chain in 1999, then was taken private in 2017 after famed founder Ron Shaich sold it for $7.5 billion — one of the biggest restaurant deals ever, the Wall Street Journal noted at the time.
The bottom line: Sandwich stocks have a sub-par history.
- At the end of the day, they probably aren't the kind of business you can build a moat around. Almost anyone can make a sandwich, after all.
