Nasdaq threatens Noodles & Co. with delisting over low stock price

BROOMFIELD — Noodles & Co. (Nasdaq: NDLS) received an unwelcome, yet likely not unexpected, Christmas gift from the listing qualifications department at Nasdaq, which warned the Broomfield-based fast casual chain on Dec. 24 that it could be delisted from the stock exchange if it doesn’t figure out a way to boost its stock price.

Nasdaq regulations require that companies listed on the exchange maintain a stock price of at least $1. Noodles’ stock price ended last week trading at 71 cents, having failed to crack the $1 threshold since early November, when the company posted disappointing third quarter earnings.

In a filing with the U.S. Securities and Exchange Commission late last month, Noodles executives said that the “company intends to monitor closely the closing bid price of its common stock and to consider all of the options for regaining compliance with Nasdaq’s Listing Rule 5450(a)(1), including by proposing a reverse stock split for stockholder approval, if necessary.”

Noodles has until June 23 to meet the listing requirement. 

To reverse the tide of sales slippage that has led to the drop in stock price, the company brought in Drew Madsen, former Panera Bread president, as its new CEO last March and introduced a revamped menu a few months later.

Noodles hired consultants with The Culinary Edge to help shape its “contemporary comfort kitchen” identity. The new offerings, which were tested this year in three trial markets, are lemon garlic shrimp scampi, chipotle chicken cavatappi and crispy chicken bacon alfredo.

The restaurant chain also hired Stephen Kennedy as Noodles’ new executive vice president of marketing late last year. The company said he will “lead the company’s brand strategy and customer growth initiatives.” Kennedy’s previous experience in the food space includes jobs at Nestle USA Inc. and Domino’s Pizza Inc. (NYSE: DPZ).

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