News

Off-premise orders made up 54 percent of Noodles & Co's Q4 sales

March 15, 2019

Although Noodles & Company reported only a 0.4 percent revenue increase to $113.2 million from $112.8 million during the fourth quarter ending Jan. 1, 2019, comparable restaurant sales increased 4 percent system-wide. Company-owned restaurants reported a 3.7 percent increase in comp sales, while they rose 5.3 percent for franchise restaurants, according to a company press release.

"Our strategic initiatives are working," CEO Dave Boennighausen, said in the release. "Our zucchini noodle introduced in 2018 continues to resonate with guests and contribute meaningfully to product mix and average check."

Off-premise sales grew to 54 percent of sales in the fourth quarter, particularly driven by digital, which grew 450 bps from the prior year to 16 percent of sales. 

"Finally, we continue to make progress in the consistency of our execution, with a continued decrease in turnover seen in 2018 alongside a meaningful increase in management tenure at all levels," he said.

The Q4 results reflected the chain's fiscal year 2018, compared to 2017. Revenues increased .3 percent to $457.8 million from $456.5 million, but comparable restaurant sales, however, increased 3.7 percent system-wide with company-owned restaurants seeing a 3.4 percent lift and franchise restaurants reporting an increase of 5.5 percent.

Paul Murphy, executive chairman, said he was pleased with the trajectory of the business and excited about the brand's future.

"We have maintained momentum into 2019, with our initiatives continuing to drive positive comparable sales despite the historically severe weather that has hampered the majority of our major markets," he said. "The organization will continue to innovate around the core strengths of the brand, our real estate pipeline is in great shape, and our liquidity profile gives us the flexibility to continue to invest in the growth of Noodles & Company."

4Q highlights

• Total revenue increased 0.4 percent to $113.2 million from $112.8 million.
• Comparable restaurant sales increased 4.0 percent system-wide, increased 3.7 percent for company-owned restaurants and increased 5.3 percent for franchise restaurants.
• Net income was approximately zero compared to a net loss of $0.5 million, or $0.01loss per diluted share.
• Adjusted net income was $0.5 million, or $0.01 earnings per diluted share, compared to adjusted net income of $0.3 million, or $0.01 earnings per diluted share
• Restaurant contribution margin increased 10 basis points to 15.2 percent.
• Adjusted EBITDA decreased 3.0 percent to $8.4 million from $8.6 million.  

Year highlights

• Net loss was $8.4 million, or $0.20 loss per diluted share, compared to net loss of $37.5 million and net loss attributable to common stockholders (after giving effect to the accretion of the preferred stock to its redemption value) of $45.4 million, or $1.20 loss per diluted share.
• Adjusted net income was $1 million, or $0.02 earnings per diluted share, compared to adjusted net loss of $0.9 million, or $0.02 loss per diluted share.
• Restaurant contribution margin increased 80 basis points to 15.0 percent.
• Adjusted EBITDA increased 9.1 percent to $33.4 million from $30.6 million.
• Opened one company-owned restaurant.

2019 outlook
For 2019, management expects the following:

• The opening of five to nine restaurants system-wide, including four to six company locations.
• Total revenue of $462.0 million to $470.0 million.
• Comparable restaurant sales of 2.0 percent to 4 percent.
• Restaurant contribution margin of 15.2 percent to 16.5 percent.
• Adjusted EBITDA of $36 million to $40 million.
• Adjusted diluted EPS of $0.06 to $0.15.
• Capital expenditures of $24 million to $30 million.