Noodles & Company (NDLS) had a tough 2023 as sales slowed. This Zacks Rank #5 (Strong Sell) is expected to see negative earnings in 2024 as it tries a menu reboot.Noodles & Company operates 470 restaurants across the United States serving noodle dishes from Wisconsin Mac & Cheese to better-for-you Zoodles.A Miss in the Fourth Quarter of 2023On Mar 7, Noodles & Company reported fourth quarter and fiscal year 2023 results and missed on earnings by $0.06. Earnings were a loss of $0.07 compared to the Zacks Con ...

Noodles & Company (NDLS) reported dismal fourth-quarter fiscal 2023 results, with earnings and revenues missing Zacks Consensus Estimate. The top and the bottom line declined on a year-over-year basis. Following the results, the company’s shares fell 6% during after-hours trading on Mar 7.Earnings & Revenue DiscussionDuring the fiscal fourth quarter, the company reported adjusted loss per share of 7 cents, wider than the Zacks Consensus Estimate of a loss of 1 cent. The company reported an adjusted earnings ...

Noodles & Company (NASDAQ:NDLS) Q4 2023 Earnings Conference Call March 7, 2024 4:30 PM ET Company Participants Mike Hynes - Chief Financial Officer Drew Madsen - Chief Executive Officer Conference Call Participants Todd Brooks - The Benchmark Company Jake Bartlett - Truist Securities Andrew Barish - Jefferies Operator Good day, and thank you for standing by. Welcome to the Noodles & Company Fourth Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speak ...

For the quarter ended December 2023, Noodles & Co. (NDLS) reported revenue of $124.32 million, down 8.9% over the same period last year. EPS came in at -$0.07, compared to $0.03 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $124.95 million, representing a surprise of -0.50%. The company delivered an EPS surprise of -600.00%, with the consensus EPS estimate being -$0.01.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings ...

Noodles & Company (NDLS) is scheduled to release fourth-quarter 2023 results on Mar 7. In the last reported quarter, the company reported earnings per share (EPS) of 4 cents, beating the Zacks Consensus Estimate of breakeven earnings.How Are Estimates Placed?The Zacks Consensus Estimate for fourth-quarter loss per share is pegged at 1 cent. In the prior-year quarter, NDLS reported EPS of 3 cents.For revenues, the consensus mark is pegged at $125 million. The metric suggests a decline of 8.4% from the year-a ...

Financial Performance - Total revenue for Q4 2023 decreased 8.9% to $124.3 million from $136.5 million, with an adjusted decrease of 2.4% when accounting for the 53rd week in Q4 2022[1] - Comparable restaurant sales decreased 4.2% system-wide in Q4 2023, with a 4.3% decrease for company-owned restaurants and a 3.6% decrease for franchise restaurants[1] - Net loss for Q4 2023 was $6.1 million, or $0.14 loss per diluted share, compared to net income of $1.0 million, or $0.02 per diluted share in Q4 2022[1] - For fiscal year 2023, total revenue decreased 1.2% to $503.4 million from $509.5 million, with an adjusted increase of 0.6% when accounting for the 53rd week in 2022[1] - Net loss for fiscal year 2023 was $9.9 million, or $0.21 loss per diluted share, compared to a net loss of $3.3 million, or $0.07 loss per diluted share in fiscal year 2022[1] - Total revenue for the fiscal quarter ended January 2, 2024, was $124.32 million, a decrease of 8.9% from $136.47 million for the same period last year[17] - Net loss for the fiscal quarter ended January 2, 2024, was $6.14 million, compared to a net income of $0.98 million for the same period last year[21] - Adjusted EBITDA for the fiscal quarter ended January 2, 2024, was $7.47 million, down from $9.10 million for the same period last year[21] - The fiscal year ended January 2, 2024, reported a net loss of $9,856 thousand, worsening from a net loss of $3,314 thousand in the previous fiscal year[23] Future Projections - The company plans to open 10-12 company-owned restaurants and up to 3 franchise-owned restaurants in fiscal year 2024[3] - Expected total revenue for fiscal year 2024 is projected to be between $510 million and $525 million, with flat to +3% comparable restaurant sales growth[3] - Restaurant level contribution margins are expected to be between 14% and 15% for fiscal year 2024[3] Operational Metrics - Company-owned average unit volumes decreased to $1,314, down 1.6% from $1,335 in the previous quarter[19] - Franchise average unit volumes decreased to $1,232, down 1.0% from $1,244 in the previous quarter[19] - Company-owned comparable restaurant sales decreased by 4.3% compared to the same quarter last year[19] - Restaurant contribution for the fiscal quarter was $17,947 thousand, down from $20,229 thousand in the same quarter last year, resulting in a contribution margin of 14.7% compared to 15.2%[26] - The company plans to continue focusing on restaurant-level productivity and efficiency as key metrics for evaluating performance[26] Financial Position - The company had available cash and cash equivalents of $3.0 million and outstanding debt of $82.2 million as of January 2, 2024[2] - Total current assets increased to $22.62 million from $21.64 million year-over-year[18] - Total long-term debt increased significantly to $80.22 million from $46.05 million year-over-year[18] - Total liabilities increased to $340.94 million from $305.48 million year-over-year[18] Restructuring and Costs - The company incurred severance and executive transition costs of $1,368 thousand in the fiscal quarter[23] - The company reported severance and executive transition costs of $191 million in Q3 2023, indicating ongoing restructuring efforts[29] Shareholder Metrics - Basic and diluted loss per share for the fiscal quarter was $(0.14), compared to earnings per share of $0.02 in the prior year quarter[23] - Weighted average common shares outstanding for the fiscal quarter were 44,955,913, down from 46,027,708 in the same quarter last year[23] - The weighted average diluted shares outstanding for Q3 2023 was 46,008,651, consistent with 46,363,208 in Q2 2023[29] - Adjusted earnings per share (basic) for Q3 2023 was $0.04, recovering from a loss of $0.02 in Q2 2023[29]

Wall Street analysts expect Noodles & Co. (NDLS) to post quarterly loss of $0.01 per share in its upcoming report, which indicates a year-over-year decline of 133.3%. Revenues are expected to be $124.95 million, down 8.4% from the year-ago quarter.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.Before a company announces its earnings, it is es ...

Financial Data and Key Metrics - Adjusted EBITDA for Q3 2023 was $11.7 million, nearly 20% above Q3 2022, driven by a 200 basis point improvement in restaurant-level margin to 16.4% [6] - Total revenue decreased 1.2% YoY to $127.9 million in Q3 2023, with system-wide comparable restaurant sales declining 3.7% [7] - Company average unit volumes in Q3 were $1.34 million, with comparable traffic declining 6.7% and pricing at 3.9% [15] - Full-year 2023 revenue guidance is $502 million to $506 million, with negative low-single digit comparable restaurant sales [19] - Full-year adjusted EBITDA guidance is $36 million to $40 million, with Q4 adjusted EBITDA expected between $8 million and $12 million [20] Business Line Performance - Catering grew 35% YoY in Q3, with significant potential for further expansion [14] - Digital menu boards have been installed in over 75% of company restaurants, with full rollout expected by year-end [10] - NoodlesREWARDS program reached 5 million members, contributing to a 45% increase in the likelihood of digital guests adding recommended items and a 1% lift in average check on digital platforms [11] Market Performance - Chicken Parmesan, introduced in Q3, has consistently been one of the top 3 selling dishes, with a 33% increase in rewards program sign-ups during its exclusive pre-launch period [12] - The dish appeals primarily to younger and lower-income cohorts, with a 30% higher index in trade areas with younger, lower-income demographics [28] Strategic Initiatives and Industry Competition - Five key initiatives to drive sales: price optimization, technology platform advancements, leveraging Chicken Parmesan, menu optimization with third-party consulting, and catering program expansion [8] - Price optimization efforts include testing pricing strategies and partnering with third-party research firms to understand pricing elasticity [9] - Menu optimization with The Culinary Edge focuses on menu architecture, offerings, and culinary operations, with tests expected to broaden and implement in early 2024 [33] Management Commentary on Operating Environment and Future Outlook - Management is encouraged by Q3 margin expansion and EBITDA growth, despite a challenging Q2 [7] - The company expects low-single digit food deflation for 2023, led by chicken, which is contracted for the full year [16] - Labor costs moderated in Q3, with hourly wage inflation at 5.5% YoY, down to 3.9% in September [17] - The company is focused on transforming the menu and pricing structure to optimize long-term performance [40] Other Important Information - The company retired 1.7 million shares at an average price of $2.86 per share in Q3, completing a $5 million share repurchase authorization [21] - Four new restaurants were opened in Q3, with a total of 20 expected for the full year, representing 5% gross unit growth in company-owned restaurants [21] Q&A Session Summary Question: Learnings from past pricing strategies and future optimization [25] - The company acknowledged being too aggressive with pricing in 2022 and early 2023 but sees opportunities for more surgical pricing strategies, including trade area tiering and menu item-specific pricing [26] Question: Trends among different income cohorts [27] - Chicken Parmesan has shown strong appeal among younger, lower-income demographics, with a 30% higher index in those trade areas [28] Question: Q4 guidance and comparisons to last year [30] - Q4 2022 had strong same-store sales growth above 10%, making comparisons challenging, but the company is seeing acceleration in 2-year same-store sales growth [31] Question: Menu optimization timing and balancing complexity [32] - Menu optimization with The Culinary Edge is ongoing, with tests expected to broaden and implement in early 2024, focusing on menu architecture, offerings, and culinary operations [33] Question: Chicken Parmesan sales mix [34] - Chicken Parmesan is the third highest-selling item, with top taste scores, though specific mix percentages are not disclosed [35] Question: Digital menu board rollout and impact [37] - Digital menu boards are at 85% rollout, with tests on pricing strategies already underway, and broader implementation expected in early 2024 [38] Question: Value perception and traffic recovery [39] - The company believes that transforming the menu and pricing structure will be key to improving traffic and value perception over time [40] Question: 2024 COGS and commodity inflation expectations [41] - The company is in the process of locking in 2024 prices, with initial conversations on chicken pricing showing positive progress [42][43] Question: 2024 development pipeline [44] - 2024 growth is expected to be similar to 2023, with franchise growth potentially playing a larger role, and signed leases already in place for the pipeline [45]

Restaurant Operations - In the first three quarters of 2023, Noodles & Company opened 13 new company-owned restaurants, bringing the total to 377 company-owned and 91 franchise restaurants across 31 states[63]. - The company permanently closed four company-owned restaurants in the first three quarters of 2023, with no significant closures anticipated in the near future[64]. - The company opened 4 new company-owned restaurants in Q3 2023, bringing the total to 377 at the end of the period[80]. Financial Performance - Revenue for the fiscal quarter ended October 3, 2023, was $20,554,000, compared to $18,217,000 for the same quarter in the previous year, reflecting an increase[77]. - Total revenue decreased by $1.5 million, or 1.2%, to $127.9 million in Q3 2023 compared to $129.4 million in Q3 2022[87]. - Total revenue increased by $6.1 million, or 1.6%, to $379.1 million in the first three quarters of 2023 compared to $373.0 million in the same period of 2022[100]. - Net income for Q3 2023 was $700,000, a decrease of $95,000 or 11.9% compared to Q3 2022[86]. Sales and Traffic - The company experienced a decline in restaurant-level traffic and total revenue during the first three quarters of 2023, attributed to consumer response to recent price increases[59]. - Comparable restaurant sales decreased by 3.7% in Q3 2023, with a 4.3% decrease at company-owned restaurants and a 1.2% decrease at franchise-owned restaurants[87]. - Comparable restaurant sales decreased 1.3% at company-owned restaurants and 1.1% system-wide in the first three quarters of 2023, primarily due to a decline in guest traffic[100]. Cost Management - Labor costs have risen due to high competition for restaurant workers, although there was a modest deceleration in wage inflation growth during the first three quarters of 2023[62]. - Restaurant operating costs as a percentage of restaurant revenue decreased to 25.1% in Q3 2023 from 28.1% in Q3 2022, primarily due to lower food and ingredient commodity pricing[88]. - Labor costs increased by $0.1 million, or 0.2%, in Q3 2023, with labor costs as a percentage of restaurant revenue rising to 31.3% from 30.8%[89][90]. - Occupancy costs increased by $0.4 million, or 3.3%, in Q3 2023, with occupancy costs as a percentage of revenue rising to 9.2% from 8.8%[91]. - General and administrative expenses increased by $0.3 million, or 2.3%, in Q3 2023, with these expenses as a percentage of revenue increasing to 9.3% from 9.0%[93]. - Cost of sales decreased by $8.8 million, or 8.6%, to 25.1% of restaurant revenue in the first three quarters of 2023 compared to 27.9% in the same period of 2022[101]. - Labor costs increased by $5.3 million, or 4.6%, to 32.0% of restaurant revenue in the first three quarters of 2023 compared to 31.1% in the same period of 2022[102]. - Occupancy costs increased by $1.0 million, or 3.0%, to 9.3% of revenue in the first three quarters of 2023 compared to 9.1% in the same period of 2022[103]. EBITDA and Margins - Adjusted EBITDA for the three quarters ended October 3, 2023, was $28,006,000, up from $23,163,000 in the same period last year[76]. - The restaurant contribution margin improved to 16.4% in the fiscal quarter ended October 3, 2023, compared to 14.4% in the same quarter of the previous year[77]. Cash Flow and Investments - Net cash provided by operating activities was $27.3 million in the first three quarters of 2023, compared to $7.8 million in the same period of 2022[113]. - Net cash used in investing activities increased to $36.6 million in the first three quarters of 2023 from $21.0 million in the same period of 2022, primarily due to new restaurant openings[114]. - Capital expenditures are estimated to be approximately $45.0 million to $50.0 million for fiscal year 2023, primarily for new restaurant openings and technology investments[117]. Debt and Interest - As of October 3, 2023, the company had $65.4 million of outstanding borrowings under its credit facility with an average interest rate of 8.00%, up from 4.09% in the same period of 2022[126]. - Interest expense, net increased by $0.5 million in Q3 2023 due to higher interest rates and debt balances[95]. - A 1.0% increase or decrease in the effective interest rate would result in a pre-tax interest expense fluctuation of approximately $0.7 million on an annualized basis[126]. Share Repurchase and Stock - The company repurchased 1,731,952 shares of its common stock for approximately $5.0 million at an average price of $2.86 per share during the third quarter ended October 3, 2023[136]. - The company’s share repurchase program announced on July 26, 2023, allows for up to $5.0 million in Class A common stock repurchases[136]. Market Conditions and Risks - The company continues to face risks related to inflation, economic uncertainties, and consumer behavior impacting restaurant traffic and revenue[58]. - Inflationary pressures on food, labor, energy, and construction materials are expected to continue affecting the company's results in the near future[128]. - The cost of food increased in 2022 due to commodity price volatility, but began to improve materially in late 2022 and into the first three quarters of 2023, particularly for chicken[127]. Internal Controls and Legal Matters - The company has not experienced any material changes in its internal control over financial reporting during the most recent fiscal quarter[131]. - There are currently no material legal proceedings involving the company, although it may become involved in ordinary course legal matters[133]. - The company’s disclosure controls and procedures are deemed effective as of October 3, 2023, ensuring timely and accurate reporting[130].

Noodles & Company (NASDAQ:NDLS) Q2 2023 Results Conference Call August 9, 2023 4:30 PM ET Company Participants Dave Boenninghausen - CEO Mike Hynes - CFO Conference Call Participants Joshua Long - Stephens Jake Bartlett - Truist Securities Andrew Barish - Jefferies Operator Good afternoon and welcome to today’s Noodles & Company's Second Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce Noodles & Company's Chief Financia ...