NDLS - Noodles & Co. lowers EPS forecast amid pricing strategy gone wrong
2023-08-09 17:52:07 ET
Noodles & Company ( NASDAQ: NDLS ) rose 1% after the close on Wednesday with management trying to reassure investors that improvements are coming.
For the full year, management expects revenue of $500M to $51M, negative low single-digit comparable restaurant sales and adjusted EPS of ($0.11) to $0.00. In May, the noodle-maker had forecast adjusted EPS of $0.10 to $0.20.
For the second quarter, revenue decreased 4.5% to $125.2M from the year earlier period and missed the average analyst estimate by $11.2M. Comparable restaurant sales dropped 5.5% system-wide and the company reported a net loss of $1.3 million, or -$0.03 loss per diluted share.
“During the beginning of the second quarter 2023, we saw meaningful softness in our guest trends,” Chief Executive Officer Dave Boennighausen said in a statement. “We attribute this in large part to being too aggressive on our pricing strategy, which included an incremental 5% increase in February of this year.”
“We have gained traction from our performance early in the second quarter as we pivoted to value messaging… We are aggressively executing strategies to further drive comparable restaurant sales growth."
The company is now focused on price optimization and expanding its catering business.
"We are assessing and reigniting our culinary offerings, including the launch of a broadly appealing Chicken Parmesan in September, as well as engagement of a leading industry culinary consultant to assist us in comprehensively evaluating and improving our menu,” the CEO said.
The company expects positive free cash flow and “meaningful adjusted Ebitda growth this year.
Share closed down 0.45% .
NDLS is down 34% in the past 12 months.
More on Noodles:
- Noodles & Company Non-GAAP EPS of -$0.02 misses by $0.08, revenue of $125.2M misses by $11.2M
- Noodles & Co. gains amid activist speculation
- Noodles & Company appoints Michael Hynes as CFO
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Noodles & Co. lowers EPS forecast amid pricing strategy gone wrong