News

Noodles & Co remains upbeat despite Q1 share losses

May 4, 2016

Although Noodles & Company reported negative earnings per share for Q1, revenues were up 7.8 percent compared to the same quarter last year, according to CEO Kevin Reddy, who addressed investors Tuesday during an earnings call. The Q1 comparable restaurant sales were flat for company-owned restaurants, decreased .5 percent for franchise restaurants and decreased .1 percent. systemwide. Reddy, however, remained upbeat.

"Over the last several months of 2015 and into 2016, we have been making strategic investments in marketing, off-premise, development and operations to create long-term value and build comparative restaurant sales," he said. "I am pleased with the progress we made in the first quarter, with results in line with our internal expectations, as we continued to improve our underlying traffic trends and narrowed the gap in our year-over-year restaurant margin performance."

During the first quarter, Reddy said the company achieved revenue of $114 million, 8 percent above prior year on flat company-owned comparable restaurant sales.

"We are excited about the momentum being built across several initiatives, including the media investment in support of our ‘Made.Different' brand positioning, building our off-premise sales and key operational improvements," he said.

The chain's development plan remains on track, Reddy said, with a front-end loaded schedule to optimize the profitability and efficiencies of the current footprint by in-filling existing markets.

"We believe the execution of these initiatives has us well-positioned for continued progress through the balance of 2016," he said.

Q1 highlights included:

• Total revenue increased 7.8 percent to $114.0 million from $105.8 million.
• Comparable restaurant sales were flat for company-owned restaurants, decreased 0.5 percent for franchise restaurants and decreased 0.1 percent systemwide.
• Comparable traffic at company-owned restaurants, normalized for the Easter holiday shift, declined 0.7 percent, a 60-bps improvement from the Q4 2015.
• 15 restaurants opened systemwide in the first quarter, including 14 company-owned and one franchise restaurant.
• GAAP net loss improved to $2.4 million from a net loss of $2.8 million.
• Adjusted net loss was $1.7 million, or $0.06 per diluted share, compared to adjusted net income of $0.9 million, or $0.03 per diluted share.
• Adjusted EBITDA decreased to $5.4 million from $8.8 million.