What Noodles & Company (NDLS) Said on Its Q3 Earnings Call

Key Points

• Q3 results improved: Comparable sales rose 9.5%, restaurant contribution margin increased to 16.7% from 13.2%, and the net loss narrowed to $2.1 million from $9.2 million. Revenue slipped to $120.9 million as restaurant closures offset growth at open locations.
• Closures boosted nearby-store sales: Noodles closed 12 company-owned restaurants during the quarter, and sales transferred to nearby locations added an estimated 3 percentage points to company comparable sales. Management expects 10 to 15 closures in 2027 as its portfolio optimization winds down.
• 2026 outlook and financing: The company expects revenue of $485 million to $495 million and adjusted EBITDA of $35 million to $37 million for 2026. It ended Q3 with $101 million in debt and extended its credit facility maturity to November 2027.

Noodles & Company NASDAQ: NDLS reported higher comparable sales and a narrower loss in the third quarter of 2026, as increased customer traffic and sales transferred from closed restaurants helped improve margins.

Revenue fell $1.2 million from a year earlier to $120.9 million as restaurant closures offset sales growth at locations that remained open. The company reported a net loss of $2.1 million, or $0.36 per diluted share, compared with a loss of $9.2 million, or $1.58 per diluted share, a year earlier.

Systemwide comparable restaurant sales rose 9.5%, including a 10.7% increase at company-owned restaurants and a 4.9% gain at franchised locations. Company-owned comparable traffic grew 7.8%, while average check increased 2.6%, including 1.9% effective pricing.

CEO Joe Christina said the results marked the company’s eighth consecutive quarter of positive same-store sales growth. Average unit volume at company restaurants rose 15.2% to $1.54 million.

Closures and margins

Restaurant contribution margin improved to 16.7% from 13.2% a year earlier, while adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, rose 34% to $8.7 million.

Chief Financial Officer Mike Hynes said sales leverage helped reduce labor costs as a percentage of sales, while menu pricing, favorable mix and lower food waste contributed to a decline in cost of sales as a percentage of revenue. The quarter’s loss included a $1.2 million noncash impairment charge, primarily related to decisions to close certain restaurants.

Noodles closed 12 company-owned restaurants during the quarter. It also opened one franchise restaurant and closed two franchised locations. Hynes estimated that sales transferred from recently closed restaurants to nearby locations benefited third-quarter company comparable sales by approximately 3 percentage points.

In response to a question from StoneX analyst Todd Brooks, Hynes said the company had pulled forward some closures, reducing expected revenue without hurting profitability. Brooks noted that the company had lowered the upper end of its previous revenue guidance by about $5 million.

Hynes said the portfolio optimization process was winding down and that management’s current estimate was for 10 to 15 closures in 2027, although there was no firm number. Some would result from natural lease expirations rather than early closures under the optimization program, he said.

Ramen launch and October sales

Comparable sales rose 5.5% in October, following 8% growth in the same month of 2025, when the company launched its Chili Garlic Ramen limited-time offering. Noodles introduced ramen as a permanent menu category in October 2026, and Christina said the new lineup accounted for a double-digit percentage of product mix during the month.

Christina said the company trained restaurant teams in September and emphasized marketing during the first weeks of the launch to build awareness and encourage trial. Noodles plans to rotate additional ramen dishes into the menu during 2027.

Hynes said the current ramen offerings were not hurting average check. Two of the dishes come with protein, while a third without a set protein offers a lower entry point, he said.

Christina also highlighted the August launch of Baked Cheese Tortelloni. Among new guests who tried it, the dish had the highest return rate of products launched this year, he said. For 2027, the company is testing products across its Asian, Italian and macaroni-and-cheese categories, as well as ramen.

Full-year outlook and debt

Noodles tightened its full-year 2026 guidance, projecting revenue of $485 million to $495 million and comparable restaurant sales growth of 9% to 10%. It expects restaurant contribution margin of 16% to 16.7% and adjusted EBITDA of $35 million to $37 million.

The company forecast 34 to 36 company-owned restaurant closures and seven to eight franchise closures for the year, along with one new franchise opening. It expects capital expenditures of $8.5 million to $9.5 million and remains on track to generate positive free cash flow, according to Hynes.

At the end of the third quarter, Noodles had $1.5 million in available cash and $101 million in debt, down $9.2 million from the end of 2025. Hynes said the company sees an opportunity to reduce debt to approximately $100 million by year-end.

The company also announced an amendment extending its credit facility’s maturity date to Nov. 30, 2027. Hynes said the extension and improved business results provide additional flexibility as Noodles continues its review of strategic alternatives.

About Noodles & Company (NASDAQ:NDLS)

Noodles & Company is a fast-casual restaurant company headquartered in Broomfield, Colorado. Founded in 1995, the company operates restaurants serving dishes inspired by noodle and pasta traditions from around the world, with a menu designed to offer customizable meals in a casual setting. Its menu includes noodle-based entrées such as Wisconsin Mac & Cheese, Japanese Pan Noodles, Pad Thai and spaghetti, along with salads, soups, desserts and beverages. The company also offers options intended to accommodate various dietary preferences, including vegetarian and gluten-sensitive choices, where available.

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