Noodles 2025 Q2 Earnings Widening Losses Amid Declining Revenue

Noodles (NDLS) reported its fiscal 2025 Q2 earnings on August 14th, 2025, with disappointing financial results that reflected continued operational challenges. The company missed key expectations, with revenue slightly declining and losses expanding. The report highlighted deteriorating profitability and negative investor sentiment, as reflected in the stock’s sharp decline in the post-earnings period.

Revenue

Noodles reported total revenue of $126.43 million for the quarter, a 0.7% decrease compared to $127.35 million in the same period last year. Restaurant operations, which form the core of the business, generated $123.78 million, while franchising royalties, fees, and other income contributed $2.65 million. The slight drop in overall revenue underscores the ongoing pressure from a competitive market and high discounting strategies.

Earnings/Net Income

The company’s financial performance deteriorated significantly, with a loss of $0.38 per share in Q2 2025, a 26.7% increase in per-share loss compared to the previous year. Net loss widened to $17.55 million, up from $13.63 million in the prior-year period, marking a 28.8% increase in losses. This indicates a worsening operational margin and growing challenges in maintaining profitability.

Price Action

Noodles’ stock has experienced a sharp sell-off in the wake of the earnings report, with the share price falling 9.74% on the most recent trading day. Over the past full week, the stock plummeted 17.03%, and the decline accelerated month-to-date with a 15.01% drop. These declines reflect investor concern over the company’s financial trajectory and the negative outlook.

Post-Earnings Price Action Review

The stock’s performance following the earnings report has been sharply negative, with a trading strategy of buying the stock after the report and holding for 30 days delivering an 84.18% loss over the past three years. This underperformed the benchmark by 130.65% and delivered a CAGR of -47.04%. The strategy’s maximum drawdown of 0.00% and a Sharpe ratio of -0.66 suggest a highly risky investment profile with no meaningful returns.

CEO Commentary

Drew Madsen, Noodles’ CEO, noted a 1.5% increase in comparable restaurant sales despite a difficult consumer environment characterized by aggressive discounting. He attributed slower adoption of menu upgrades and strong value-consciousness among customers as key factors behind the moderated performance. However, he highlighted a positive 5% rise in comparable sales during the two weeks following the launch of the Delicious Duos value platform. Madsen expressed optimism for the future and confidence in incoming CEO Joe Christina, whose experience and leadership he believes will drive growth and strengthen the brand’s position in the comfort food space.

Guidance

Noodles expects 2025 total revenue to range between $487 million and $495 million, with comparable restaurant sales growth of 2.5% to 4.0%. Restaurant contribution margins are projected at 11.8% to 12.6%, with general and administrative expenses estimated at $48 million to $50 million (including $3.0 million in stock-based compensation). The company also forecasts $27 million to $29 million in depreciation and amortization, $10.5 million to $11.5 million in net interest expense, two new company-owned restaurant openings, and 28 to 32 closures. Capital expenditures are expected to fall between $12 million and $13 million.

Additional News

Nigeria-based media outlet Punch Newspapers reported on several significant events in the week following Noodles’ earnings release. In a major development, two Nigerians were arrested in Beirut, Lebanon, for allegedly smuggling three kilograms of cocaine, valued at approximately $500,000. Meanwhile, the Kaduna State government dismissed allegations from the African Democratic Congress and the Social Democratic Party of election sabotage in the ongoing by-elections. In the corporate sector, the Chocolate City Group appointed Ifeyinwa Anyadiegwu as its new vice president, bringing legal expertise to the entertainment firm. Additionally, Nigerian citizens were noted to be favoring Abu Dhabi and Dubai for capital protection, according to a recent report. These events highlight continued global and domestic challenges in law enforcement, politics, and finance.