Operations
Noodles & Co's 3 steps to profitability: Menu innovation, closures, digital growth
Although the company announced a net loss of $9.2 million, or 20 cents per diluted share, recent sales growth and the decision to close underperforming restaurants are steps in the right direction, said Noodles & Co. CEO Joseph Christina.
November 6, 2025 by Cherryh Cansler — Editor, FastCasual.com
Noodles & Co. CEO Joseph Christina said the chain was headed toward profitability despite reporting a net loss for the third quarter. Although the company announced a net loss of $9.2 million, or 20 cents per diluted share, recent sales growth and the decision to close underperforming restaurants are steps in the right direction.
"I am thrilled with our recent sales trend, which has significantly outperformed the fast-casual benchmark," Christina said during Wednesday's earnings call. "Comparable sales grew 4% in the third quarter, and that momentum accelerated even further in October to a robust 8% increase in comparable sales, well above the industry average, with traffic up over 1.5%."
The company is focusing on three ways to sustain this sales growth and strengthen its financial outlook:
1. Menu innovation, value
The chain is attributing sales acceleration to menu evolution and the introduction of the "Delicious Duo Platform," launched in late July, mixing at a steady 4% to 5% of sales.
"The early results show that guests view Duos as an everyday option, rather than a limited-time promotion, allowing them to make noodles a regular part of their dining routine," Christina said.
The company also saw excitement from a limited-time offer, the Chili Garlic Ramen, which was capturing "guest curiosity and enthusiasm evidenced by strong trial and early repeat performance."
2. Strategic restaurant closures to boost margins
Noodles & Co is closing underperforming restaurants, a similar strategy announced by Starbucks last week during its earnings call. Noodles closed 15 company-owned and three franchise restaurants in Q3 and is on track to close 31 to 34 company-owned locations by the end of the year.
"From the restaurants we plan to close, we expect to retain approximately 30% of sales through transfer to neighboring units," said Christina, who was appointed CEO in August. "We expect the closure of underperforming restaurants in 2025 to positively impact 2026 restaurant level contribution by over $2 million."
In the third quarter, restaurant contribution margins improved by 40 basis points to 13.2%, partly due to these actions.
3. Digital growth, enhanced loyalty
The third major sales driver is the rapid expansion of its digital and third-party delivery channels, which increased 12% year-over-year in the third quarter.
"Digital remains a critical growth engine for Noodles, strengthening both awareness and accessibility," Christina said.
The digital push is supported by increased enrollment and engagement in the Noodles Reward program, which helps to build loyalty and drive sales frequency.
The future
The company updated its full-year 2025 guidance, forecasting total revenue of $492 million to $495 million and comparable sales growth between 3.6% and 4.2%.
Despite the quarterly loss, CEO Christina remains optimistic about the company's trajectory.
"As I look across the business, I am confident that the work we have done this year is paying off," he said. "We are building a more relevant brand, providing greater value and variety for our guests, and setting the stage for sustainable growth in the quarters ahead."
About Cherryh Cansler
