Core Insights - The company achieved system-wide comparable sales growth of nearly 7% in 2025 by enhancing food quality and launching the most comprehensive menu in its history [1] - Traffic and brand awareness were driven through high-impact limited-time offers, such as Steak Stroganoff, which exceeded prior launch results and strengthened guest engagement [1] - A value-based pricing strategy was implemented with 'Delicious Duos' to address consumer price sensitivity through variety and satisfaction rather than temporary discounting [1] Financial Performance - Restaurant-level margins expanded by 290 basis points to 14.1% due to improved labor productivity, disciplined food cost management, and sales leverage [1] - The Operational Excellence Review (OER) program was launched to establish a structured coaching model, resulting in overall guest satisfaction scores reaching 72% in January [1] Strategic Initiatives - The restaurant portfolio was optimized by closing underperforming locations, facilitating a material transfer of sales to nearby sites and increasing baseline average unit volumes [1] - Marketing transitioned to an 'always-on' performance-optimized engine that dynamically adjusts investment based on real-time return and audience response data [1]

Financial Data and Key Metrics Changes - Total revenue in Q4 2025 increased by 0.8% year-over-year to $122.8 million [19] - System-wide comparable restaurant sales in Q4 increased by 6.6%, with company-owned restaurants up 7.3% and franchise restaurants up 3.8% [19] - Average unit volumes for company restaurants increased by 9.9% to $1.44 million [19] - Restaurant contribution margin improved to 14.1% in Q4 2025, up from 11.2% in Q4 2024 [20] - Adjusted EBITDA in Q4 was $7.6 million, an increase of over 88% compared to $4 million in Q4 2024 [22] Business Line Data and Key Metrics Changes - The company closed 9 company-owned and 3 franchise restaurants in Q4 2025 as part of a portfolio optimization project [22] - The closures resulted in a transfer of sales to nearby locations, positively impacting average unit volumes and restaurant-level profits [24] Market Data and Key Metrics Changes - System-wide comparable sales growth accelerated to over 9% in Q1 2026, with traffic growth over 4% [4] - The company has seen consistent performance, significantly outperforming the industry average of 0%-1% same-store sales growth [35] Company Strategy and Development Direction - The company focused on four strategic goals: developing winning teams, igniting growth, driving guest satisfaction, and delivering strong financial results [9] - A renewed emphasis on operational excellence and a structured coaching model has been implemented to improve consistency and accountability across restaurants [12] - The company is exploring strategic alternatives to maximize shareholder value, including potential refinancing or other financial transactions [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the foundation built in 2025 and the strong sales acceleration into 2026, positioning the company for sustainable growth [27] - The company is addressing consumer value consciousness by offering appealing meal combinations without temporary discounts [14] Other Important Information - The company expects to close 30-35 restaurants in 2026 as part of ongoing optimization efforts [24] - Capital expenditures for 2026 are estimated at $9.5 million-$10.5 million, with expectations to be free cash flow positive [26] Q&A Session Summary Question: Insights on 2026 guidance and sales transfer impact - Management indicated that approximately half of the expected EBITDA improvement in 2026 is attributed to restaurant closures, with the remainder from core business improvements [33] Question: Impact of external factors on sales performance - Management noted no significant impact from early tax refunds or geopolitical tensions on current performance, maintaining consistency in sales growth [35] Question: Mix of Delicious Duos offerings - The Delicious Duos mix is around 5%, influenced by the presence of strong limited-time offers [38]

Financial Data and Key Metrics Changes - Total revenue in Q4 2025 increased by 0.8% year-over-year to $122.8 million [19] - System-wide comparable restaurant sales in Q4 increased by 6.6%, with company-owned restaurants up 7.3% and franchise restaurants up 3.8% [19] - Average unit volumes for company restaurants rose by 9.9% to $1.44 million [19] - Restaurant contribution margin improved to 14.1% in Q4 2025, up from 11.2% in Q4 2024, reflecting a 290 basis point increase [20] - Adjusted EBITDA for Q4 was $7.6 million, an increase of over 88% compared to $4 million in Q4 2024 [22] Business Line Data and Key Metrics Changes - The company closed nine company-owned restaurants and three franchise restaurants in Q4 2025, continuing a trend of closing underperforming locations [22] - The closures resulted in a transfer of sales to nearby locations, positively impacting average unit volumes and restaurant-level profits [24] Market Data and Key Metrics Changes - System-wide comparable sales growth accelerated to over 9% in Q1 2026, with traffic growth exceeding 4% [4] - The company has seen consistent performance, significantly outperforming the industry average of 0%-1% same-store sales growth [36] Company Strategy and Development Direction - The company focused on enhancing its menu with new offerings and limited-time promotions, such as the Chili-Garlic Shrimp Ramen and Steak Stroganoff, to attract new customer groups [5][11] - A renewed emphasis on operational excellence through the Operational Excellence Review program has improved consistency and accountability across restaurants [12] - The company aims to optimize its restaurant portfolio further, with plans to close an estimated 30-35 restaurants in 2026 [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum, citing strong execution of fundamentals and improved guest experience as key drivers of performance [27] - The company anticipates continued growth in adjusted EBITDA for 2026, projecting total revenue between $478-493 million and comp restaurant sales growth of 6%-9% [25] Other Important Information - The company is undergoing a review of strategic alternatives to maximize shareholder value, which may include refinancing existing debt [17] - The company has a debt balance of $110.2 million and expects to be free cash flow positive in 2026 [23] Q&A Session Summary Question: Insights on 2026 guidance and sales transfer impact - Management indicated that approximately half of the expected $10 million EBITDA improvement for 2026 is attributed to restaurant closures, with the remainder from core business improvements [33] Question: Impact of external factors on sales performance - Management noted no significant impact from early tax refunds or geopolitical tensions on current performance, maintaining consistent sales growth [36] Question: Mix of Delicious Duos offerings - The Delicious Duos mix is around 5%, influenced by the presence of strong limited-time offers [39]

Financial Data and Key Metrics Changes - Total revenue in Q4 2025 increased by 0.8% year-over-year to $122.8 million [19] - System-wide comparable restaurant sales in Q4 increased by 6.6%, with company-owned restaurants up 7.3% and franchise restaurants up 3.8% [19] - Restaurant contribution margin in Q4 improved to 14.1%, up from 11.2% in Q4 2024, reflecting a 290 basis point increase [20] - Adjusted EBITDA in Q4 was $7.6 million, an increase of over 88% compared to $4 million in Q4 2024 [22] - Net loss for Q4 was $6.8 million, or a loss of $1.16 per diluted share, compared to a net loss of $9.7 million or a loss of $1.70 per diluted share in the previous year [22] Business Line Data and Key Metrics Changes - Company average unit volumes in Q4 increased by 9.9% to $1.44 million [19] - Average check increased by 5.8% in Q4, which included a 2% effective pricing increase [19] - The company closed 9 company-owned restaurants and 3 franchise restaurants in Q4 [22] Market Data and Key Metrics Changes - System-wide comparable sales growth accelerated to over 9% in Q1 2026 year-to-date [4] - Company comp traffic in Q4 increased by 1.4% [19] - The closures of underperforming restaurants positively impacted comparable sales by approximately 100-150 basis points in Q4 [24] Company Strategy and Development Direction - The company focused on strengthening its core business and restoring consistency across the system in 2025 [10] - Strategic goals for 2026 include developing winning teams, igniting growth, driving guest satisfaction, and delivering strong financial results [9] - The company is exploring strategic alternatives to maximize shareholder value, including refinancing existing debt [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the consistency of performance across the business, citing improved food quality and execution [17] - The company anticipates continued sales momentum and margin improvement in 2026, projecting total revenue of $478 million to $493 million [25] - Management noted that the current macroeconomic environment has made consumers more value-conscious, which the company is addressing through its menu offerings [14] Other Important Information - The company expects to close 30-35 restaurants in 2026 as part of its portfolio optimization project [24] - Capital expenditures for 2026 are estimated to be between $9.5 million and $10.5 million [26] - The company aims to be free cash flow positive and reduce its debt balance by $5 million to $10 million in 2026 [26] Q&A Session Summary Question: What is the contribution of sales transfer to the 2026 guidance? - Management indicated that approximately half of the expected EBITDA improvement in 2026 will be due to closures, with the rest attributed to core business improvements [34] Question: Are there any stimulative benefits from early tax refunds or pressures from external factors? - Management noted no significant impact from tax refunds or external pressures on performance, maintaining consistency in sales growth [36] Question: How does the Delicious Duos mix perform? - The Delicious Duos mix is expected to be around 5%, influenced by strong limited-time offers [38]

Core Insights - Noodles & Company is reintroducing its popular Steak Stroganoff dish for a limited time due to high demand from fans [1][2] - The return of Steak Stroganoff is celebrated through AI-powered mini-dramas that highlight fan engagement and emotional connections to the dish [2][3] Product Details - The Steak Stroganoff features wavy egg noodles in a mushroom-sherry cream sauce, marinated steak, Parmesan cheese, and fresh Italian parsley, creating a comforting flavor profile [1] - The dish is positioned as a nostalgic favorite, particularly appealing during colder weather [3] Marketing Strategy - The company is leveraging social media by transforming fan posts into dramatic reenactments, showcasing the emotional significance of the dish to its customers [2][3] - A casting call for the first-ever Chief StroganOff-icer will take place from February 10 to February 25, inviting fans to demonstrate their passion for the dish [4] Engagement Initiatives - Fans can participate by posting dramatic monologues about Steak Stroganoff on Instagram, with the winning entry being featured in an AI mini-drama [5][6] - The winner will receive a gift card for a free bowl of Steak Stroganoff every week in 2026, along with exclusive merchandise [6] Loyalty Program - New members of the Noodles Rewards program receive a free regular entrée after their first purchase of $10 or more, enhancing customer engagement and loyalty [7] - Members earn points on orders, gaining access to new menu items and exclusive offers [7] Company Background - Noodles & Company has been serving globally inspired noodle dishes since 1995, with over 445 locations and a focus on flavor and customer experience [8][9]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 decreased by 2% year-over-year to $121.8 million [30] - System-wide comparable restaurant sales increased by 0.8%, with a 0.5% increase at company-owned restaurants and a 1.9% increase at franchise restaurants [30] - Net loss for Q4 was $9.7 million, or a loss of $0.21 per diluted share, compared to a net loss of $6.1 million, or a loss of $0.14 per diluted share in the previous year [33] Business Line Data and Key Metrics Changes - Company comparable traffic decreased by 0.1%, while average check increased by 0.6% with effective pricing of 1.3% during the quarter [30] - Restaurant-level contribution margin was 11.2%, down from 14.7% in Q4 2023 [33] - G&A expenses for Q4 were $11.3 million, down from $13.9 million in 2023, primarily due to lower severance and executive transition costs [33] Market Data and Key Metrics Changes - The company experienced a significant improvement in guest satisfaction, achieving the largest single-month increase in January, reducing the gap to the fast-casual industry average by nearly 80% over the past twelve months [11] - The company reported double-digit traffic growth in the third-party delivery channel, driven by a revised pricing and promotion strategy [13] Company Strategy and Development Direction - The company is focusing on operational excellence, menu transformation, and enhancing guest experience as part of its five strategic priorities [9][10] - A significant menu transformation is planned, with nearly two-thirds of the menu being new or reimagined, representing the largest culinary change in the company's history [16] - The new brand strategy, "We Know Noodles," aims to enhance brand relevance and customer engagement through a comprehensive marketing plan [24][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sales trends, noting that the improvements seen in Q4 2024 have accelerated into Q1 2025, with comp sales growth over 3% [9][36] - The company anticipates total revenue for 2025 to be between $503 million and $512 million, with mid-single-digit comp restaurant sales growth expected [37] Other Important Information - The company closed six company-owned restaurants in Q4 and plans to close 12 to 15 company-owned and four franchise restaurants in 2025 [34][38] - Joe Cristina was announced as the new President and Chief Operating Officer, succeeding Brad West [28] Q&A Session Summary Question: Areas of improvement in guest satisfaction scores - Management noted significant improvements in overall satisfaction, taste of food, and accuracy, which are directly related to driving traffic growth [45][46] Question: Same-store sales expectations for the current quarter - Management indicated that the first quarter is tracking over 3%, with expectations for mid-single-digit growth primarily in Q3 and Q4 due to tougher comps in Q2 [47][49] Question: Impact of weather on sales trends - Management clarified that the 3% growth is sustainable and not solely impacted by weather, with non-weather weeks reflecting similar performance [55] Question: Margin impact from menu rollout - Management confirmed a 100 basis point investment in food costs related to the menu rollout, with expectations of achieving flat to growing margins year-over-year despite this investment [61][63]