Noodles & Company (NDLS) Q4 2025 Earnings Call Summary

1Key Financial Results and Metrics:

Total Revenue:: $122.8 million, up 0.8% year-over-year.

Comparable Restaurant Sales:: Increased by 6.6% overall, with company-owned restaurants up 7.3% and franchise restaurants up 3.8%.

Average Check:: Increased by 5.8%, driven by a 2% effective pricing increase.

Average Unit Volumes:: Rose by 9.9% to $1.44 million.

Restaurant Contribution Margin:: Improved to 14.1% from 11.2% in the previous year.

Net Loss:: $6.8 million, or $1.16 per diluted share, compared to a loss of $9.7 million, or $1.70 per diluted share, in Q4 2024.

Adjusted EBITDA:: Increased to $7.6 million from $4 million in Q4 2024.

Cash Position:: $1.3 million available cash; total debt at $110.2 million.

2Strategic Updates and Business Highlights:

Menu Enhancements:: Launched a comprehensive menu overhaul, introducing successful limited-time offers (LTOs) like Chili Garlic Ramen and Steak Stroganoff, which attracted new customers.

Operational Excellence:: Implemented the Operational Excellence Review program to improve consistency and accountability across restaurants.

Portfolio Optimization:: Closed 33 underperforming restaurants in 2025, with a continued focus on optimizing restaurant locations expected to enhance sales at remaining locations.

Value Proposition:: Introduced "Delicious Duos," creating appealing meal combinations to enhance customer satisfaction without resorting to discounts.

3Forward Guidance and Outlook:

2026 Projections::

Total Revenue:: Expected between $478 million and $493 million.

Comp Sales Growth:: Projected at approximately 9%.

Adjusted EBITDA:: Forecasted between $30 million and $35 million, more than doubling from the previous year.

Restaurant Contribution Margin:: Expected to range from 14.7% to 16%.

Capital Expenditures:: Estimated at $9.5 million to $10.5 million.

Debt Reduction:: Anticipated reduction of $5 million to $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.

Impairment Charge:: Included a non-cash impairment charge of $5.6 million related to restaurant closures.

Market Conditions:: The company faces a competitive environment with industry same-store sales growth hovering around 0-1%, which may pressure future performance.

Consumer Sensitivity:: The potential impact of macroeconomic factors, such as gas price increases and consumer spending trends, remains a concern.

5Notable Q&A Insights:

Sales Transfer Impact:: Approximately half of the expected EBITDA improvement in 2026 is attributed to sales transfers from closed restaurants, with the other half stemming from core business improvements.

Consumer Behavior:: Management noted no significant impact from early tax refunds or gas price fluctuations on current sales performance, suggesting strong underlying demand.

Delicious Duos Performance:: This offering has maintained a mix of around 5% of sales since its launch, indicating steady consumer interest. Overall, Noodles & Company demonstrated solid operational improvements and strategic initiatives in 2025, setting a positive tone for 2026 despite ongoing challenges in the competitive landscape and financial performance.