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Noodles & Company still ‘under pressure,’ but gaining momentum

Noodles & Company still ‘under pressure,’ but gaining momentum

Same-store sales fell in the fourth quarter, but have risen in the quarter to date

Noodles & Company fourth-quarter same-store sales declined 1.1 percent systemwide, but executives said the fast-casual chain is gaining momentum in fiscal 2016.

For the Dec. 29-ended quarter, Broomfield, Colo.-based Noodles & Company said same-store sales declined 0.9 percent for company-owned restaurants and 2.1 percent for franchised locations.

Revenue increased 7.9 percent, to $117.1 million, despite the closure of 16 company-owned locations during the quarter. The company swung to a net loss of $4.3 million, or a loss of 15 cents per share, for the quarter, compared with net income of $3.5 million, or 11 cents per share, a year ago.

“While earnings remained under pressure during the fourth quarter, I am pleased with the progress we made on implementing several initiatives,” said Kevin Reddy, Noodles & Company chairman and CEO.

During the quarter, the company introduced a “Made. Different.” brand positioning, which was activated through the launch of a Kids Meal nationwide and an integrated media campaign in select markets, he said.

“This new positioning highlights our differentiated, made-to-order fast-casual dining experience, as well as our continued commitment to food quality and transparency,” Reddy said.

The fundamental business is strengthening, he said. For fiscal 2016, same-store sales are expected to increase in the low single digits.

So far, same-store sales have risen 0.4 percent in the quarter to date through Feb. 24 at company-owned restaurants, and have increased 0.8 percent at franchised units, Reddy said.

For the year, same-store sales fell 0.3 percent systemwide, including a decline of 0.2 percent at company units and 0.9 percent at franchised locations.

Revenue grew 12.8 percent, to $455.5 million, for the year. But the chain ended the year with a net loss of $13.8 million, or a loss of 48 cents per share, compared with net income of $11.4 million, or 37 cents per share, the prior year.

In guidance for 2016, Noodles & Company said about 50 new locations are planned, including 40 to 45 company-owned restaurants.

The chain ended the year with 492 restaurants in 35 states, the District of Columbia and Canada.

Contact Lisa Jennings at [email protected].
Follow her on Twitter @livetodineout

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