After mid-single-digit growth through the beginning of the first quarter, Noodles & Company saw same-store sales cut nearly in half in mid-to-late March due to the COVID-19 pandemic.
After witnessing a 7.5 percent increase in the four weeks ending February 25 and a 4.6 uptick in the two weeks ending March 10, sales dropped 46.3 percent from March 11 to March 31 (45.5 percent at company-owned stores and 51.3 percent at franchises). Noodles & Company ended Q1 with a 7.2 percent decline systemwide, an 8.9 percent dip at franchises and a 7 percent slide at corporate units.
The company furloughed 10 percent of its Central Support Office, with another 20 percent reduced to part-time. Each of those employees will receive medical benefits during the furlough. In addition, salaries have been reduced for executives and non-furloughed, full-time Central Support Office employees. The compensation for the board of directors was reduced, as well.
About 97 percent of corporate locations and 94 percent of franchises are open. Each are operating via takeout, curbside (available at 350 units), carryout, and delivery. Prior to the pandemic, off-premises represented 60 percent of sales. The company expanded delivery options through its digital channels and added Uber Eats as a third-party partner.
“I am proud of the team’s ability to quickly evolve and address the needs of the consumer during this time of uncertainty,” CEO David Boennighausen said in a statement. “We have seen these efforts result in a stabilization of downward sales trends and with our recent introduction of curbside and family meals, our sales have begun to improve. While the environment remains challenging, daily sales during the seven days prior to Easter Sunday were 7 percent higher than our daily sales during the last two weeks of March.”
To assist franchisees, the company has granted deferral of certain royalties, IT support, and marketing fees. Capital expenditures for 2020 were reduced from $20 million to $30 million to $7 million to $10 million, with substantive suspensions of new unit development and initiatives like the “kitchen of the future.” As of April 10, Noodles & Company has $58 million in cash and a long-term debt balance of $95.9 million.
“I would like to thank our incredible guests who have continued to support us during this challenging time,” Boennighausen said. “At Noodles & Company, our mission is ‘To Always Nourish and Inspire Every Team Member, Guest and Community We Serve.’ Never has this mission been more relevant than today.”
