Noodles & Company (NDLS) Q3 2024 earnings summary

Executive summary

• Q3 2024 total revenue decreased 4.0% year-over-year to $122.8 million, with system-wide comparable restaurant sales down 3.3% and company-owned down 3.4%, driven by industry-wide discounting, a challenging consumer environment, and a drop in third-party delivery sales.

• Net loss for Q3 2024 was $6.8 million (loss of $0.15 per diluted share), compared to net income of $0.7 million in Q3 2023; adjusted EBITDA fell to $4.9 million from $10.9 million.

• Restaurant-level contribution margin declined to 12.8% from 16.4% last year, reflecting sales deleverage and higher operating costs.

• Strategic focus shifted to guest experience, menu innovation, and targeted loyalty outreach, resulting in improved sales trends in Q4 following new menu launches and promotional adjustments.

• Senior management team strengthened with new EVP of Marketing and Chief Concept Officer appointments.

Financial highlights

• Q3 2024 total revenue was $122.8 million, with restaurant revenue at $120.2 million, both down 4.0% year-over-year.

• System-wide comp restaurant sales declined 3.3%; company-owned down 3.4%, franchise down 2.9%.

• Restaurant contribution margin dropped to 12.8% from 16.4% in Q3 2023.

• Adjusted EBITDA was $4.9 million, down from $10.9 million in Q3 2023.

• Cash and cash equivalents were $3.3 million as of October 1, 2024, with $32.1 million available under the credit facility and $89.9 million in outstanding debt.

Outlook and guidance

• Full-year 2024 revenue guidance: $487–495 million, with comparable sales of -3% to -1.5%.

• Restaurant contribution margin expected between 12.7% and 13.3%.

• G&A expenses projected at $51–53 million; depreciation and amortization at $28–30 million; interest expense at $8–9 million.

• 2024 capital expenditures expected at $29–31 million; 2025 CapEx to be less than $15 million.

• Expectation to be free cash flow positive for the full year 2025.