Noodles & Company’s turnaround remains a work in progress

Noodles continues to make progress. Photo courtesy of Noodles & Company

Noodles & Company’s third quarter financial results were a mixed bag, as the company continues its recovery trajectory.

While the fast-casual brand reported 9.5% same-store sales growth and a 7.8% increase in traffic for company-owned stores, the company continued to be weighed down by profit losses and debt.

The revenue and income declines were mainly caused by store closures, Noodles & Company’s executive leadership said during Friday’s call. These closures — 14 in the last quarter alone — will result in short-term pain for long-term gain and are a major part of the company’s overall recovery plan.

“We continue to see a meaningful improvement in our restaurant-level economics related to our portfolio optimization project,” Noodles & Company CFO Michael Hynes said. “In the third quarter, we continued to see a transfer of sales from recently closed restaurants to nearby Noodles locations. … This creates an ongoing increase to the AUVs of the restaurants that were in proximity to the closed restaurants and contributes to restaurant contribution margin growth.”

Hynes said that by the end of 2026, the company will have closed 41 to 44 company-owned and franchised restaurants in total, though he did not say whether closures would continue into 2027.

Besides portfolio optimization, Noodles & Company has focused on menu and marketing innovation to drive sales at the remaining restaurants, especially the launch and expansion of its ramen platform. Ramen was first introduced in October 2025 as an LTO and is now back as a permanent menu category due to popular demand.

This strategy is clearly working on a store-level basis: This past earnings period was the company’s eighth consecutive quarter of positive same-store sales. AUVs increased by 15.2%, while restaurant-level margins rose 3.5 points, to 16.7%.

But despite these improvements, the company reported $101 million in debt and $1.5 million in available cash, with operating margins at just 0.1%, though the company expects this to improve in 2027.

“The next phase of our journey is about building on that foundation and continuing to elevate our performance,” Noodles & Company CEO Joe Christina said. “We are focused on ensuring that our continued growth is supported by the right organizational capabilities, operational processes, and financial discipline.”

For the third quarter ended Sept. 29, Noodles & Company’s revenues decreased by 1.0% to $120.9 million, compared to $122.1 million for the third quarter of 2025. The company reported a loss of $2.1 million, or $0.36 loss per diluted share, compared to net loss of $9.2 million, or $1.58 loss per diluted share, in the third quarter of 2025. Noodles & Company ended the quarter with 383 restaurants across its global portfolio.

Noodles stock was down 12% mid-Friday after the results were published.

Contact Joanna at [email protected]