Noodles & pany(US:NDLS)2022-04-28 02:19Financial Data and Key Metrics Changes - Total revenue for Q1 2022 increased by 2.7% to $112.6 million compared to the previous year [17] - Comparable restaurant sales increased by 6.4% system-wide, with a 5.3% increase at company-owned restaurants and an 11.9% increase at franchise restaurants [18] - Average unit volumes (AUV) for the quarter were $1.25 million, a 6.8% increase from last year and a 13.3% increase versus pre-COVID levels in 2019 [19] - GAAP net loss for Q1 was $6.4 million or $0.14 per diluted share, compared to a net loss of $2 million or $0.04 per diluted share last year [26] Business Line Data and Key Metrics Changes - The company opened seven new restaurants in Q1, the largest number of new openings in a quarter since 2016 [7] - New restaurants are exceeding internal projections and performing well above company averages [8] - The company anticipates achieving a 30% plus cash-on-cash return on new locations [8] Market Data and Key Metrics Changes - The company expects nearly 40% of its restaurants to meet the long-term target of $1.5 million AUV during Q2 [9] - Digital sales accounted for 58% of total sales during Q1 [13] Company Strategy and Development Direction - The company aims to accelerate growth with a target of at least 1,500 units nationwide [9] - Focus on increasing the franchise mix, with a recent agreement for 40 new yield locations in California [10] - Introduction of new menu items like Leanguini, which is expected to significantly expand reach and encourage repeat visits [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities ahead, despite inflationary pressures [10] - The company has seen improvements in staffing and operational efficiencies, resulting in reduced cook times and increased sales per labor hour [15] - Management expects continued strength in average unit volume growth throughout Q2 [27] Other Important Information - The company implemented a temporary $1 surcharge on chicken menu prices due to rising costs [22] - Total inflation in Q1 was around 20%, with chicken prices being a significant contributor [42] Q&A Session Summary Question: Can you clarify the cadence of same-store sales? - Management believes there is sequential improvement, with same-store sales accelerating from 11%-12% in early Q1 to 15% in March and 18% in April [32] Question: What impact do you expect from the new Leanguini product? - Management anticipates Leanguini will have a meaningful impact, similar to previous successful launches, with strong guest response metrics [36][37] Question: What drove the lower end of the COGS guidance range? - Stabilization in non-protein COGS and the ability to secure shorter-term pricing contracts contributed to the lower end of the guidance [39] Question: How is the company addressing inflationary pressures? - The company is implementing a $1 surcharge on chicken and anticipates a 10% price increase in Q2, including the surcharge [73] Question: What is the margin profile for restaurants achieving high AUVs? - The majority of these restaurants are expected to have margins above 20%, with improvements as chicken prices normalize [46]