Operations

Digital, off-premise sales keeping Noodles & Co afloat

Provided

October 29, 2020

Q3 digital sales at Noodles & Co grew 151%, accounting for 61% of sales and keeping the chain afloat during the pandemic.

"Noodles & Company's off-premise capabilities and digital strength uniquely position the brand to meet the needs of today's fast casual environment and take advantage of long-term consumer trends," CEO Dave Boennighausen said in a press release. "While we continue to navigate the current COVID-19 pandemic, our consistent sales recovery and return to positive comparable sales during the last month of the third quarter is evidence of our ability to serve great tasting healthy food conveniently when and where guests want it."

Noodles reported quarterly earnings of $0.01 per share, compared to earnings of $0.09 per share a year ago. Revenues were $106 million compared to $118.3 million last year at this time, and comparable restaurant sales decreased 3.8% systemwide, comprised of a 3.6% decrease at company-owned restaurants and a 5% decrease at franchise restaurants.

The decrease was primarily due to a decline in traffic related to the impact of the COVID-19 pandemic during the quarter, the refranchising of 14 restaurants since January 2019, as well as the chain being closed July 4 and 5. Additionally, revenue decreased due to temporary restaurant closures as a result of the COVID-19 pandemic.

Comparable restaurant sales improved throughout each month of the quarter with September being the high point, according to the company. Average Unit Volumes, which normalizes for the impact of temporary restaurant closures, was relatively flat year-over-year as strong off-premise sales, including digital, offset the COVID-19 pandemic related impacts including having in restaurant dining closed for a significant portion of the third quarter 2020.

"Although there remains uncertainty around the duration and severity of COVID-19, we feel that Noodles & Company's digital strengths, off-premise friendly menu, powerful economic model, and the strength of recent new restaurant openings give us confidence in our opportunity to thrive and accelerate growth in the years to come," Boennighausen said.

Noodles has 454 units, comprised of 378 company-owned restaurants and 76 franchise restaurants. This month, the company opened two company-owned restaurants, including one restaurant that has broken the chain's record for sales during their initial seven, 14 and 21 days of operation.