Noodles & Company raises guidance on strong second quarter

Noodles & Company raised its guidance for the year after reporting one of its strongest quarters since becoming a public company in 2013.

The Broomfield, Colorado-based chain said same-store sales grew 10.3% during the second quarter — the seventh consecutive quarter of comparable sales growth — including an 11.4% increase at company restaurants and a 5.5% increase at franchised units.

Traffic at company units was up 7.6%, and the average check increased 3.8%, including a 2.1% increase in menu prices during the quarter. Average unit volumes at company-owned units increased nearly 16% to $1.57 million, the company said. Noodles ended the quarter with 318 company and 78 franchised locations.

Restaurant margins grew by 440 basis points to 17.2%, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased nearly 80%. The improved financial results allowed the chain to pay down debt.

Revenues increased 0.5% to $127 million. The fast-casual chain, however, ended the quarter with a net loss of $3.9 million, down from a loss of $17.5 million the prior year, in part because of impairment charges from the closure of four restaurants during the quarter, including two company-owned and two franchised units.

Noodles & Company expects to close between 30 to 35 company owned restaurants and five franchised units in 2026 as part of an ongoing portfolio review. The chain has shuttered around 60 units since the beginning of 2025, and the removal of underperforming locations has boosted average unit volumes at nearby units.

CEO Joe Christina, however, credits the brand’s ongoing turnaround efforts with the vastly improved results.

“The operating model we have built is working well,” said Christina in a call with analysts on Friday. “These results showcase that progress is happening faster than even we anticipated, and they reinforce our confidence in the long-term sustainability of the improvements we are making in the business.”

Christina said Noodles’ Asian menu offerings during the second quarter performed well, including the Indonesian Peanut Saute and the Chili Garlic Ramen. The limited-time offers grew in the category mix by 42% during the promotional period, but core entrees also remained strong.

About 65% of guests who came for the promotion were new, Christina said. More ramen dishes are coming in the fourth quarter.

For the year, Noodles now expects total revenue between $485 million to $500 million, with same-store sales growth between 8% to 11%. That’s up from the projection after the first quarter of revenue growth between $483 million and $498 million, and comparable sales of 7% to 10%.

Margins are now expected to range between 16% to 17% for the year.

The company is continuing to consider a review of strategic alternatives, launched last year, including a possible sale, refranchising, or refinancing of debt that is scheduled to mature in July 2027.

The positive results injected momentum into Noodles’ stock price, which was up nearly 29% in midday trading at $15.90 per share, close to its 52-week high of $16.65. It’s a vast improvement, after Noodles has faced multiple warnings for possible delisting after the stock price dipped below $1 over the past year.