Noodles & pany(US:NDLS)2023-03-09 01:31Financial Data and Key Metrics Changes - Adjusted EBITDA increased over 100% year-over-year in Q4 2022 [6] - Revenue for Q4 2022 rose 18.9% to $136.5 million compared to the previous year [17] - GAAP net income for Q4 was $975,000, or $0.02 per diluted share, compared to a net loss of $4.7 million, or negative $0.10 per diluted share last year [22] Business Line Data and Key Metrics Changes - Company-owned restaurant sales increased by 10.2%, while franchise locations saw a 1.3% increase in comparable sales [16] - Average unit volumes grew to $1.38 million for Q4 2022 [18] - Restaurant level contribution margin was 15.2%, a 280-basis point increase compared to last year [18] Market Data and Key Metrics Changes - Digital sales grew 11% year-over-year, accounting for over 54% of total sales in Q4 2022 [7] - The rewards program accounted for nearly 25% of sales, with membership increasing by 12.5% to 4.5 million [8] - Comparable restaurant sales for Q1 2023 are anticipated to be in the high single digits [16] Company Strategy and Development Direction - The company plans to leverage digital assets and enhance the rewards program to drive growth [9] - Focus on menu innovation and digital marketing to meet diverse consumer needs [9] - A strong unit pipeline is expected to support significant growth in 2023, with a target of 7.5% system-wide gross openings [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth driven by top-line expansion and improved cost structures [6][15] - The company anticipates a normalized cost of goods sold environment, with fixed pricing contracts expected to yield significant cost improvements [10][19] - Management noted that consumer health remains strong, with stable guest frequency and no significant trade-down observed [31] Other Important Information - The company expects capital expenditures of $53 million to $58 million for the full year, primarily for new unit growth and digital initiatives [24] - The company maintains a total debt balance of approximately $47.7 million and has $75 million of incremental liquidity available [24] Q&A Session Summary Question: Can you quantify the strong January trends? - Management noted that January sales were consistently strong, with momentum continuing into February, despite the Omicron impact [29][31] Question: What are the components of the comparable sales growth? - Pricing in Q4 was approximately 9%, with an additional 5% price increase implemented in February [33] Question: How confident is the company in achieving the 7.5% unit growth target? - Management expressed confidence in the pipeline, which is three times higher than the previous year, despite potential challenges in permitting and landlord delivery [45] Question: What are the expectations for labor costs and efficiencies? - Labor costs are expected to remain consistent or slightly higher than 2022 levels, with ongoing inflation anticipated [20][41] Question: What are the early learnings from the digital menu boards? - Digital menu boards have shown significant increases in sales for promoted items, indicating a strong return on investment [62]