Noodles & pany(US:NDLS)2025-05-07 21:32Financial Data and Key Metrics Changes - Total revenue for Q1 2025 increased by 2% year-over-year to $123.8 million [17] - System-wide comparable restaurant sales increased by 4.4%, with company-owned restaurants up 4.7% and franchise restaurants up 2.9% [17] - Company average unit volumes were $1.31 million in Q1 [17] - Net loss for Q1 was $9.1 million, or a loss of $0.20 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 [19] - Adjusted EBITDA for Q1 was $2.4 million, down from $5.5 million in Q1 2024 [20] Business Line Data and Key Metrics Changes - Same-store sales increased by 4.7% in company-owned restaurants and 4.4% system-wide, driven by new menu items and marketing efforts [5][17] - Traffic increased by 1.8% and average check increased by 2.9%, including a 1.3% effective pricing increase [17] - Restaurant-level contribution margin decreased to 10.3% from 13.1% in Q1 2024 [19] Market Data and Key Metrics Changes - The Easter holiday shift positively impacted Q1 comparable sales by approximately 50 basis points [17] - The company experienced a significant increase in brand awareness and digital engagement following the new menu launch [14] Company Strategy and Development Direction - The company is focused on operational excellence and has implemented a comprehensive training program for staff to support the new menu rollout [6][7] - A major menu transformation was executed, with nearly two-thirds of the menu being new or improved, aimed at increasing brand relevance and customer engagement [10][12] - The marketing strategy has shifted to include broader reach awareness channels, such as connected TV and digital audio, to attract a wider audience [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sales momentum and the effectiveness of the new menu and marketing strategies, despite a challenging macroeconomic environment [5][16] - The company anticipates continued sales growth and improvements in cost management throughout the year [22] Other Important Information - The company plans to open two new company-owned restaurants in 2025 and close 13 to 17 company-owned and four franchise restaurants [24] - Capital expenditures for 2025 are estimated to be between $11 million and $13 million, significantly lower than previous years [24] Q&A Session Summary Question: Marketing commitment and loyalty customer response to the new menu - Management indicated that marketing investment has been doubled for the new menu and is expected to continue at a high level [28] - Loyalty members have shown a strong response, with double-digit transaction growth noted [32] Question: Traffic trends since the menu launch and future plans - Traffic has remained strong, with over 5% growth since the menu launch, and management plans to maintain this momentum through continued execution [36][37] Question: Understanding margin pressures and one-time costs - Management acknowledged one-time costs related to the menu launch, including marketing and training expenses, but expects margins to improve as sales grow [41][43] Question: Free cash flow expectations - The company was slightly free cash flow positive in Q1 and anticipates being free cash flow positive in Q3 and Q4 [50][51]