noodles and co

Noodles & Company offers update on restaurant closures

Operator continues to close underperforming locations, but also plans new openings

Noodles & Company continues to close underperforming restaurants this year, after a disappointing 2016, but it has also opened new locations in more established markets.

The Broomfield, Colo., based fast-casual operator said Wednesday that this year it has closed 39 underperforming restaurants, as of March 1, out of a total of around 55 locations it plans to close.

However, interim CEO and chief financial officer Dave Boennighausen said in an earnings call Thursday that eight new company-owned restaurants and one new franchised unit have opened so far this year, out of an anticipated 14 to 17 openings.

“Our new openings in 2017, as well as those that we would anticipate in 2018, will be centered in lower risk, healthy, established markets,” he said.

Noodles & Company reported an overall same-store sales decrease of 0.8 percent — down 0.9 percent at company-owned restaurants and falling 0.1 percent at franchised locations. 

Same-store sales trends deepened in the fourth quarter ended Jan. 3 with a 1.3-percent loss at corporate locations and a 2-percent gain at franchised restaurants.

Over the course of last year, 38 new company-owned units and six franchised restaurants opened, giving the chain a total of 457 company-owned locations and 75 franchised restaurants as of Jan. 3.

Boennighausen said Noodles & Company was also in the process of franchising some company-owned restaurants.

“Specifically, these are markets in which we have begun building infrastructure and attained modest success in building brand awareness, but we feel they will be able to flourish and grow under franchise ownership that is able to provide greater focus on their success,” he said. 

For the year, Noodles & Company reported a net loss of $71.7 million, or $2.58 per share, that included a $10.6 million charge for claims and anticipated claims related to a data breach.

Much of the loss was in the fourth quarter, when the company reported a net loss of $45.4 million, or $1.63 per share, compared with a loss of 4.25 million, or 15 cents per share, a year earlier. 

Total revenue rose $32 million for the year. Revenue increased $129.4 million, a 10.5-percent increase over the previous year. 

 

Contact Bret Thorn at [email protected]

Follow him on Twitter: @foodwriterdiary

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