Noodles shares surge 12.96% after-hours as activist investor Galloway proposes selling 200 stores to reduce debt and eliminate bankruptcy risk.

Noodles & Company surged 12.96% in after-hours trading following activist investor Galloway Capital’s proposal to sell 200 of its 349 company-owned restaurants. The move aims to generate $60 million to pay down high-cost debt (9-10% interest rates), reduce bankruptcy risk, and improve cash flow. Galloway, which owns 6.01% of shares, highlighted the strategy’s potential to enhance shareholder value, citing a similar success at Regis Corporation. The proposal aligns with Noodles’ recent hiring of Piper Sandler to explore value-creation options and follows the stock’s prolonged Nasdaq compliance issues. Other news, including a limited-time holiday menu or unrelated market movers, lacked material impact on the stock’s sharp after-hours rally.