Noodles to close 16 stores in 4Q; shares dive 14 percent

BROOMFIELD — Noodles and Co. CEO Kevin Reddy on Thursday said in the restaurant chain’s third-quarter earnings report that the company plans to close 16 restaurants in the fourth quarter as it looks to bolster its financial performance and win back investors.

Noodles’ share price, which had recovered some since sinking to nearly $11 in August, plunged 14 percent in pre-market trading, from a close of $13.50 Wednesday to $11.60, as earnings fell short of analysts’ expectations.

Broomfield-based Noodles (Nasdaq: NDLS) reported a net loss of $9.8 million, or 35 cents per share. That’s compared to a profit of $2.9 million, or 10 cents per share, for the same period a year ago.

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Revenue was up 10.5 percent from a year ago to $117.3 million. But comparable restaurant sales — which represent year-over-year sales comparisons for restaurants open for at least 18 full periods — dipped 0.9 percent during the quarter.

Even as it plans to close stores, the company opened 16 new ones during the third quarter, including 13 company-owned locations and three franchise locations. As of the end of the third quarter, the company had 488 locations spread across 35 states, Washington and Canada.

Reddy said Noodles took action during the third quarter to improve sales growth, including a new advertising campaign as well as the announcements that the company aims to remove artificial colors, flavors, preservatives and sweeteners from core menu items and provide only antibiotic– and hormone-free meat and poultry by 2017.

Noodles stock has steadily dropped since the company went public in 2013.  Shares closed as high as $27.74 just nine months ago, but have fallen sharply since.