Noodles shares slide as CEO Kevin Reddy announces resignation

BROOMFIELD — Officials for restaurant chain Noodles & Co. (Nasdaq: NDLS) announced on Monday that Kevin Reddy is stepping down as chairman and chief executive, effective immediately.

The announcement accompanied preliminary estimates of second-quarter financial results that included a 1 percent decrease in comparable restaurant sales. Combined, the news led to Broomfield-based Noodles’ share price diving 9 percent in after-hours trading after a 5 percent gain during the day Monday.

Reddy is also resigning his post on Noodles’ board of directors.

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The board of directors has appointed Robert Hartnett as chairman of the board. Noodles chief financial officer Dave Boennighausen, meanwhile, has been named interim CEO while a search is conducted for a permanent replacement.

No specific reason was given for Reddy’s departure.

“After many years with this great company, I have decided that it is the right time in my career to pursue new personal and financial opportunities,” Reddy said in a prepared statement.

After serving as chief operations officer for Denver-based Chipotle, Reddy joined Noodles in 2005, becoming CEO a year later and chairman in 2008. He oversaw the company’s $96 million initial public offering in 2013. But the company has struggled to impress investors since the early excitement around the IPO waned.

Noodles has more than 500 restaurants nationwide, including 62 in Colorado.

“Kevin has dedicated himself to growing the Noodles & Company brand from approximately 100 restaurants to more than 500 restaurants nationwide over the past 10 years,” Scott Dahnke, Noodles’ lead independent director, said in a release. “We appreciate Kevin’s many years of leadership, his unwavering commitment to providing a quality guest experience and his contributions to the company’s success.”

Hartnett’s 40 years in the restaurant industry include a 14-year run as CEO of Houlihan’s Restuarants Inc., as well as for Einstein/Noah Bagel Inc., before that. Boennighausen, meanwhile, has been CFO of Noodles since 2012 and joined the board of directors in August of last year.