Sandwich chain Subway reported double-digit same-store sales growth in the first quarter, showing its turnaround taking hold as the company seeks to sell itself.
In February, Subway confirmed that it hired JPMorgan to advise it on a potential sale. The restaurant company is reportedly seeking a valuation of at least $10 billion, and the auction is heading into its second round, according to The Wall Street Journal. Subway CEO John Chidsey told Restaurant Business Online that a deal is expected to be done by the end of May or early June.
The company's improved performance could help it achieve that valuation. Subway said it saw traffic growth in the first quarter, although price hikes and comparisons to last year's Covid omicron outbreaks also likely boosted its numbers.
Globally, Subway's same-store sales climbed 12.1%, and its digital sales increased 11.4%. In North America, same-store sales grew 11.7%, and digital sales soared 21.2%.
The company is not required to disclose its financial results because it's privately owned. However, Subway has recently shared periodic sales updates as it has undertaken a turnaround.
Under Chidsey's leadership, Subway's strategy has involved overhauling its menu, updating its technology and mobile app and improving franchisee profitability. Chidsey was also responsible for pushing the founders' families to consider selling, Restaurant Business Online reported.
The foundation for Subway co-founder Peter Buck, who died in November 2021, announced earlier this year that he left his 50% ownership to the organization. The family of co-founder Fred DeLuca, who died six years earlier, owns the other half of the company.
Part of Subway's attempted comeback has also focused on shifting its franchisees from single-unit operators to those who operate more restaurants. On April 17, Subway announced it had transferred 230 locations to five multi-unit franchisees to operate.
Subway has more than 37,000 locations across more than 100 countries. The majority of those locations are in the U.S., although its domestic footprint has shrunk considerably over the last decade. Its popular $5 footlong sandwich deal and aggressive development put pressure on franchisees' profits. The chain was hurt further by the high-profile trial of former spokesman Jared Fogle and DeLuca's death, which both occurred in 2015.