The following is a summary of the Noodles & Company (NDLS) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Total revenue increased by 1.8% year-over-year to $127.4 million in Q2 2024.

• System-wide comp restaurant sales increased by 2.0% with a 1.3% increase at company-owned restaurants and a 4.7% increase at franchised locations.

• Net loss for Q2 was $13.6 million, a significant increase from a net loss of $1.3 million the previous year, primarily due to a $10.9 million non-cash impairment charge related to underperforming restaurants.

• Adjusted EBITDA for Q2 2024 was $9.2 million, up from $8.5 million in Q2 2023.

Business Progress:

• Implemented a strong focus on operational excellence and guest experience, particularly improving the dimensions most related to traffic growth such as overall satisfaction, food taste, and accuracy.

• Initiated Phase 3 of a comprehensive menu transformation, aiming to impact about two-thirds of the menu with new or improved offerings within a year.

• Leveraged a digital ecosystem to increase customer engagement and loyalty, successfully boosting active loyalty member traffic and reducing loyalty discount spending.

Opportunities:

• Continues to leverage a strong digital presence where 55% of total sales are from digital channels.

• Plans to stimulate guest interest and drive traffic with new menu items transitioning into national introduction.

• Aims to capitalize on catering opportunities projecting it to eventually contribute to 4-5% of total sales, while exploring new catering sales tactics and reducing operational friction through technological integrations.

Risks:

• Faced challenges from underperforming restaurants resulting in plans to close about 20 units.

• Experiences mild consumer resistance suggested by modest signs of check management and the economic need to adjust marketing strategies.

• Revised full-year revenue and performance projections downward, reflecting a challenging consumer environment and cautious outlook.

More details: Noodles & Co IR

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