Noodles & pany(US:NDLS)2020-05-07 03:19Financial Data and Key Metrics Changes - Comparable sales growth system-wide was 5.5% during the first 10 weeks of Q1, but fell 46.3% in the last three weeks of Q1, resulting in a decline of 7.2% for the quarter [7][8] - At its lowest point, comparable sales declined 55% at company-owned restaurants during the last week of March [8] - Recent improvements showed a decline of 36.1% in comparable sales over the past three weeks and 33.6% in the most recent week ending May 5 [9] Business Line Data and Key Metrics Changes - Off-premise business accounted for over 60% of sales during the first 10 weeks of Q1, which has been a strength during the pandemic [9] - The introduction of family meals at $40, serving four people, has been successful and showcases the variety in the menu [15][16] Market Data and Key Metrics Changes - The company has seen consistent performance across geographies and day parts, with some markets performing better due to fewer restrictions [33] - Weekend dining business has declined more than weekday business, but recent momentum has been observed during traditional dine-in times [33] Company Strategy and Development Direction - The company has shifted to an off-premise only model and implemented enhanced safety measures, including increased cleaning procedures and providing face coverings for team members [11][12] - Strategic priorities include ensuring health and safety, increasing accessibility and convenience, and providing value through menu variety [11][13][14] - The company plans to continue enhancing the guest experience through its rewards program and digital channels [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term strength of the business despite the current challenges posed by the COVID-19 pandemic [24] - The company believes it can remain cash neutral even with a 20% decline in comparable sales for an extended period [21][22] Other Important Information - The company has withdrawn its previously issued guidance for fiscal 2020 due to the uncertainty surrounding the pandemic [22] - The company has taken significant steps to improve financial health, including reducing nonessential spending and optimizing labor deployment [20] Q&A Session Summary Question: Any changes in sales mix during the crisis? - Management noted a slight initial shift towards comfort food, but a recent trend back towards healthier options like Zoodles and Caulifloodles [27][28] Question: Will curbside service continue post-crisis? - Management confirmed that curbside service will continue as it was already on the initiative list before the crisis [29][30] Question: Any geographical differences in performance? - Management indicated consistent performance across geographies, with some markets performing better due to fewer restrictions [32][33] Question: How are franchisees doing during this period? - Management stated that franchisees are well-capitalized and have been allowed to defer fees to support liquidity [34][35] Question: What is the cash burn rate? - Management estimated a cash burn of approximately $3 million per month, with G&A running around $2.5 million and CapEx at approximately $800,000 [41][42] Question: What actions will be taken to maintain improvement? - Management plans to continue focusing on digital capabilities, curbside service, and introducing healthier family meal options [44][46] Question: What is the strategy for reopening stores? - Management is prepared to open dining rooms safely but is not rushing due to the strength of the off-premise business [48]