Noodles halts hot streak with fourth quarter loss

BROOMFIELD — After an impressive post-2020 comeback in recent periods, Noodles & Co.’s (Nasdaq: NDLS) appears to have overcooked the earnings pasta a bit in the fourth quarter of 2021. 

The Broomfield-based pasta fast-casual chain posted quarterly losses of $4.7 million, or 10 cents loss per diluted share, a move in the wrong direction compared to a net loss of $3.8 million, or 9 cents loss per diluted share, in the fourth quarter of 2020.

“While underlying business fundamentals remained strong, fourth quarter results were impacted by staffing challenges, as well as the surge of the Delta COVID-19 variant in the upper midwest and rocky mountain regions, which contain a majority of our operations, particularly during November and into early December,” Noodles CEO Dave Boennighausen said in a prepared statement. “We estimate that the temporary closures and reduced operating hours associated with the Delta variant impacted our revenue by approximately $8.0 million during the fourth quarter. Importantly, as staffing improved and the Delta variant declined, system-wide comparable restaurant sales increased throughout the quarter, from 6.8% in October to 11.9% in November and 14.7% in December.”

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Wall Street expected a much different result with Zachs Consensus Estimate speculating earnings would be positive at 8 cents per share.

Still, sales were up 7.1% in the recent to $114.8 million from $107.2 million, and 2021 full fiscal year earnings results were rosier.

For the full year, Noodles posted $475.2 million in revenue, nearly 21% higher than in 2021.

Net income was $3.7 million, or 8 cents per share, for the full year. 

“Looking forward to 2022 and beyond, we are as convinced as ever in the company’s ability to be a premier growth story in the restaurant industry,” Boennighausen said. “We do expect near term pressures in the first quarter due to the Omicron variant, as well as during the first half of the year due to commodity inflation, but we are confident we will successfully navigate this environment and rapidly return to the average unit volume and margin expansion we saw during the majority of 2021. This belief is bolstered by the strength of our strategic initiatives and our pricing power, with the majority of our dishes having entry points of approximately $7.”