Zacks Investment Research | May 11, 2018 06:17AM ET
Noodles & Company (NASDAQ:NDLS) reported mixed results in the first quarter of 2018, wherein earnings missed the Zacks Consensus Estimate while revenues surpassed the same. In the quarter, the company reported adjusted loss of 4 cents, wider than the consensus estimate of 2 cents but narrower than the prior-year quarter’s loss of 8 cents.
Meanwhile, revenues of $110.5 million surpassed the consensus mark of $109.1 million by 1.3% but fell 5.3% year over year. The decline in revenues was primarily due to the closure of 55 restaurants during the year-ago quarter, partially offset by restaurant opening since the beginning of 2017.
Comps in the quarter were also affected by a shift in the timing of the Easter holiday. System-wide first-quarter comps declined 0.2% and that of company-owned restaurants fell 0.3%. Comps at Noodles & Company’s franchise restaurants however increased 0.9%.
Notably, Noodles & Company has been bearing the brunt of soft consumer demand and declining comps over the past few quarters. Despite its major sales building initiatives like streamlining of menu and innovation, the introduction of new cooking procedures, effective marketing strategy, increased focus on the off-premise business and investments in technology-driven initiatives like digital ordering, it has recorded negative comps in each of the trailing four quarters in 2017 and also in the first quarter of 2018.
Meanwhile, high costs from restaurant operation and increased labor expenses might have been a potential threat to Noodles & Company’s earnings. Conversely, the company has been undertaking the task of closing underperforming restaurants, which has positively impacted its margins.
Noodles & Company Price, Consensus and EPS Surprise
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