Noodles & pany(US:NDLS)2020-02-27 01:25Financial Data and Key Metrics Changes - In 2019, total revenue increased by 1% to $462.4 million from $457.8 million in 2018, driven by system-wide comparable sales growth of 2.8% [20] - Adjusted EBITDA increased by 15.2% to $38.4 million, with a significant increase of over 30% in the fourth quarter [20][8] - Net income for 2019 was $1.6 million or $0.04 per diluted share, compared to a net loss of $8.4 million or $0.20 per diluted share in 2018 [21] - Adjusted net income for 2019 was $8.1 million or $0.18 per diluted share, compared to $1 million or $0.02 per diluted share in 2018 [21] Business Line Data and Key Metrics Changes - Comparable sales growth for company-owned restaurants was 2.9%, while franchise locations saw a 2.5% increase [21] - Digital sales increased by 34% year-over-year, accounting for 25% of total sales in Q4 2019 [9] - Off-premise sales increased to 58% of total sales, with digital sales representing 28% year-to-date in 2020 [9] Market Data and Key Metrics Changes - Year-to-date comparable sales growth in 2020 reached 5.8%, significantly outperforming the industry [8] - The company anticipates 10 to 15 new restaurant openings in 2020, with a target of 5% unit growth system-wide beginning in 2021 [15] Company Strategy and Development Direction - The company is focusing on enhancing guest engagement through digital ordering and a new rewards program, which has shown positive sales results [7][10] - Culinary innovation remains a priority, with plans for approximately three menu launches annually, including plant-based alternatives [12] - The company aims to strengthen its operational foundation to support unit growth, targeting a disciplined approach to expansion [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth potential, citing seven consecutive quarters of positive comparable sales growth and strong margin expansion [7] - The company is optimistic about the economic model's improvement and expects continued growth in adjusted EBITDA and net income [20][26] - Management highlighted the importance of operational excellence and people development as critical to success in the restaurant industry [14] Other Important Information - The company amended its credit facility, increasing borrowing capacity to $100 million to support new restaurant development [25] - The company expects capital expenditures to range between $20 million and $30 million for 2020 [27] Q&A Session Summary Question: What happened with same-store sales in Q4? - Management noted that sales momentum was strong but fell slightly short of expectations due to a delayed marketing push related to the rewards program [31] Question: How will unit openings be paced in 2020? - The company indicated that openings will be backend loaded, with most new restaurants expected in the fourth quarter [40] Question: What are the expectations for restaurant margin guidance? - Management discussed various drivers for margin expansion, including negotiating delivery fees and implementing premium pricing [34][37] Question: What is the outlook for commodity inflation in 2020? - The company expects commodity inflation to remain around 1% for 2020, benefiting from contracted pricing for 75% of its spend [59] Question: How will the pick-up experience evolve in 2020? - The company plans to enhance the pick-up experience by removing friction points and personalizing the process for guests [62]