Noodles & Company

First-quarter revenue was $123.8 million, roughly flat year over year. System-wide comparable restaurant sales increased 9.1% (company-owned +9.4%, franchise +8%), company comp traffic increased 4.8%, and average check increased 4.4%, including about 2% effective pricing. Company average unit volumes increased 13.5% to $1.49 million. Restaurant contribution margin improved 460 basis points to 14.9% from 10.3%, while COGS declined to 25.4% of sales and labor declined to 30.0% of sales. Net loss narrowed to $3.4 million, or $0.68 per diluted share, from a $9.1 million loss, or $1.58 per share, and adjusted EBITDA more than tripled to $7.7 million from $2.4 million. For 2026, the company raised guidance to revenue of $483 million to $498 million, comp sales growth of 7% to 10%, restaurant contribution margin of 15.5% to 17%, G&A of $50 million to $53 million, adjusted EBITDA of $32.5 million to $37.5 million, 1 to 2 new franchise openings, 30 to 35 company-owned closures, and 5 franchise closures, with capital expenditures of $9.5 million to $10.5 million. Management said it expects to be free cash flow positive and to reduce debt by about $10 million in 2026, including a $3.4 million reduction in Q1.

Joseph Christina framed the quarter as evidence that Noodles is delivering “consistent and sustainable” improvement driven by better restaurant execution, more disciplined marketing, and a menu strategy built around craveable global flavors. He emphasized 16 consecutive months of positive same-store sales, a 10% rise in guest satisfaction scores over the last six months, 36% growth in new guest active purchases, and 33% growth in loyalty sign-ups. His tone was confident and upbeat, and he repeatedly said the progress is broad-based rather than tied to one-off promotions.

Michael Hynes focused on the financial leverage from stronger sales and tighter costs. He said contribution margin rose to 14.9% from 10.3% as COGS fell to 25.4% of sales and labor fell to 30.0%, helped by sales leverage, lower waste, and fewer occupied restaurants; occupancy dollars also declined to $10.4 million from $11.5 million. He noted the quarter included a $2.7 million noncash impairment charge tied to restaurant closures, capex was $2.1 million, cash was $1.4 million, and debt was $106.8 million, down $3.4 million from year-end. He also reiterated that about 250 bps of comp growth came from closed-location sales transfer, with most of the lift coming from underlying business improvement.

Analyst Todd Brooks asked how much of Q1 comp growth came from transferred sales versus core improvement; management said about 250 bps was attributable to closed locations, which was within the earlier 200 to 300 bps estimate, and the majority came from core business improvement. He also asked about weather impact, and management said it largely washed out. On the boost-week promotion, management said it is aimed at rewards members and new sign-ups, will continue through the year, and will be run in specific weeks outside the regular LTO calendar. Brooks also asked about check growth, and management said roughly 2% came from price, with the rest from mix and delivery-channel strength.