Noodles posts loss as YoY revenues slip

BROOMFIELD — Noodles & Co. (Nasdaq: NDLS) posted a net loss in the second quarter of fiscal year 2020 as the fast-casual pasta chain attempts to adjust to the COVID-19 restaurant environment.

The firm’s Q2 net loss totaled $13.5 million, or 30 cents per diluted share, compared with net income of $400,000, or 1 cent per diluted share during the same period in 2019.

Revenues fell to $80.2 million in the most-recent period from $120.2 million in Q2 last year. 

“I am extremely proud of all of our team members and partners for the progress we have made since the onset of the COVID-19 pandemic,” Noodles CEO Dave Boennighausen said in a prepared statement.

While most of the chain’s locations were closed for in-person dining in the early part of the quarter, sales bounced back toward the end of Q2.

During the last two weeks of the quarter, comparable sales declined only 3.8% at company-owned restaurants.

“Our second quarter saw a consistent sales recovery led by the strength and evolution of our digital and off-premise business, and I’m pleased to report that the recovery has continued into the third quarter,” Boennighausen said. “In addition, average unit volumes, normalized for the impact of temporary closures, were nearly flat year-over-year during the recently completed July fiscal period.  This continued improvement, coupled with the potential to utilize a smaller, off-premise focused footprint to take advantage of a more favorable real estate environment, gives me great confidence in the Company’s ability to continue to gain momentum through the balance of 2020 and accelerate new unit growth in the years to come.”

Noodles did not offer any specific guidance for Q3, but the company said, “Assuming we continue to see comparable sales improvement, we have increased confidence on our ability to generate positive cash flow for the rest of 2020 and support strategic investments.”

Noodles stock closed at $7.45 Aug. 6, up 46 cents, or 6.58%.

Editor’s note: This story was updated to clarify that it in-person dining was closed in the early part of the quarter. 

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