Though Noodles & Company is prepared logistically to reopen dining rooms, the brand said it won’t rush anything until consumers are ready to dine out again.
The decision is buoyed by encouraging second quarter sales compared to steep same-store sales declines in late March, the fast-casual chain said Wednesday during its first quarter earnings call.
“We are seeing a steady rebound in company-owned comparable sales growth, which declined 54.7% during the last week of March but has since improved to a decline of just 33.6% for the fiscal week ended May 5, 2020 as our digital and off-premise innovation is helping offset the continued closure of our restaurant dining rooms,” CEO Dave Boennighausen said in a statement.
As jurisdictions ease dine-in restrictions, Noodles restaurants are prepared to modify layouts to adhere to local requirements for social distancing. That includes adding plexiglass barriers at order counters, and checking employee temperatures before shifts.
Still, Boennighausen said the brand is not in a hurry.
“We're not in a rush necessarily to open the dining rooms,” he said. “We're going to take our cues from not just the regulatory agencies, but also the guests.”
For the first quarter ending March 31, same-store sales decreased 7.2% systemwide, dragged down by mandated dining room closures that started in mid-March. Prior to that, same-store sales had increased 5.5% during the first 10 weeks of the year ending March 10. Transactions were also positive during that time.
In recent weeks, the company has seen consumers gravitate to culinary and digital innovations developed during the crisis including family meals and curbside pickup. Interest in healthier meals like the brand's vegetable noodle dishes are also increasing. The company was developing a curbside strategy prior to the crisis, but accelerated the contacless pickup channel during the pandemic.
Curbside, which offers guest contactless ordering and pickup, is available in 375 locations. That represents a majority of the brand’s 458 locations.
Throughout the pandemic, curbside pickup, typically found in casual dining, has seen a dramatic increase among limited-service chains. The Habit Burger Grill, Pizza Hut, Shake Shack, Taziki's Mediterranean Café, and Domino's have all implemented new curbside procedures during the outbreak. Some chains are also adding makeshift drive-thru lanes to accommodate diners looking for contactless order/pickup.
Total revenue for the quarter decreased 8.8% to $100.3 million. A net loss of $5.8 million, or 13 cents per share, compared to a net loss of $1.9 million, or 4 cents per share, for the same period last year.
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