Noodles & Company Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Revenue: $123.8 million, flat year-over-year.

System-wide Comp Sales Growth: 9.1%, with 9.4% growth at company-owned restaurants and 8% at franchise locations.

Average Unit Volumes: Increased by 13.5% to $1.49 million.

Restaurant Contribution Margin: Rose 460 basis points to 14.9%.

Adjusted EBITDA: More than tripled to $7.7 million from $2.4 million in Q1 2025.

Net Loss: $3.4 million ($0.68 per diluted share), improved from a loss of $9.1 million ($1.58 per diluted share) in the previous year.

Cash and Debt: $1.4 million in cash and $106.8 million in debt, down $3.4 million from the end of 2025.

2Strategic Updates and Business Highlights

Operational Improvements: Enhanced restaurant operations led to a 10% increase in guest satisfaction scores and consistent traffic growth.

Marketing Strategy: Focused on ongoing engagement with customers, resulting in a 36% increase in new guest purchases and a 33% rise in loyalty sign-ups.

Menu Innovations: Successful limited-time offers (LTOs) like Steak Stroganoff and the introduction of new dishes such as Chicken Artichoke and Asparagus Rigatoni, supported by strategic partnerships (e.g., with CRAVINGS by Chrissy Teigen).

Portfolio Optimization: Closed 20 underperforming company-owned restaurants, which helped improve sales at nearby locations and overall profitability.

3Forward Guidance and Outlook

2026 Revenue Guidance: Expected to be between $483 million and $498 million, with comp sales growth of 7% to 10%.

Adjusted EBITDA: Projected between $32.5 million and $37.5 million.

Capital Expenditures: Estimated at $9.5 million to $10.5 million for the year.

Debt Reduction: Anticipated to decrease by approximately $10 million in 2026.

4Bad News, Challenges, or Points of Concern

Net Loss: Despite improvements, the company reported a net loss, indicating ongoing financial challenges.

Restaurant Closures: The decision to close underperforming locations, while beneficial in the long run, reflects challenges in certain markets.

Dependence on New Initiatives: Continued reliance on new menu items and marketing strategies to drive growth may pose risks if these initiatives do not resonate with customers.

5Notable Q&A Insights

Sales Contribution from Closures: Approximately 250 basis points of the comp sales increase were attributed to the closure of underperforming locations, indicating that core business improvements were the primary driver of growth.

Weather Impact: Minimal impact from winter weather was noted, suggesting that results were largely unaffected by seasonal factors.

Boost Week Strategy: The new promotional strategy is aimed at both existing and new guests, with plans to continue this initiative based on positive results.

Price and Mix Breakdown: Average check increase of 4.4% was driven by 2% price increases and a favorable mix from new menu items. Overall, Noodles & Company demonstrated strong operational improvements and strategic initiatives in Q1 2026, leading to significant growth in key financial metrics, although challenges remain in terms of net losses and market performance.