Restaurant chain Noodles & Co Q2 revenue misses estimates

Overview

• Noodles & Co Q2 revenue fell 0.7% to $126.4 mln, missing estimates, per LSEG data

• Adjusted EBITDA missed analyst expectations, per LSEG data

• Comparable restaurant sales rose 1.5% despite challenging consumer environment

Outlook

• Company expects 2025 revenue of $487 mln to $495 mln

• Noodles & Co sees 2025 comparable sales growth of 2.5% to 4.0%

• Company anticipates 2025 restaurant contribution margins of 11.8% to 12.6%

• Noodles & Co plans 2 new company-owned restaurant openings in 2025

Result Drivers

• COMPARABLE SALES - Comparable restaurant sales increased 1.5% system-wide, driven by new menu rollout and value-focused initiatives, per CEO Drew Madsen

• VALUE PERCEPTION - Efforts to improve guest value perception through the Delicious Duos platform showed positive early results, with recent sales averaging a 5% increase

• CHALLENGING ENVIRONMENT - Company faced a challenging consumer environment with heightened discounting and promotional activity impacting sales and traffic

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the restaurants & bars peer group is "buy."

• Wall Street's median 12-month price target for Noodles & Co is $2.75, about 60% above its August 12 closing price of $1.10

Press Release: ID:nGNX54X4Hr