Noodles & Company NDLS reported dismal fourth-quarter fiscal 2023 results, with earnings and revenues missing Zacks Consensus Estimate. The top and the bottom line declined on a year-over-year basis. Following the results, the company’s shares fell 6% during after-hours trading on Mar 7.
Earnings & Revenue Discussion
During the fiscal fourth quarter, the company reported adjusted loss per share of 7 cents, wider than the Zacks Consensus Estimate of a loss of 1 cent. The company reported an adjusted earnings per share (EPS) of 3 cents in the prior-year quarter.
Quarterly revenues of $124.3 million missed the consensus mark of $125 million. The top line declined 8.9% on a year-over-year basis.
Noodles & Company Price, Consensus and EPS Surprise
Noodles & Company Price, Consensus and EPS Surprise
Noodles & Company price-consensus-eps-surprise-chart | Noodles & Company Quote
During the quarter, restaurant revenues came in at $121.8 million compared with $133.5 million reported in the prior-year quarter. Franchise royalties and fees and other during the quarter came in at $2.5 million compared with $3 million reported in the prior-year quarter.
Comps
In the fiscal fourth quarter, system-wide comparable restaurant sales declined 4.2% year over year against growth of 8.7% reported in the prior-year quarter. The downside was primarily caused by a fall in traffic.
Company-owned comparable restaurant sales during the quarter fell 4.3% year over year against 10.2% growth reported in the prior-year quarter.
Franchise comparable restaurant sales in the fiscal fourth quarter fell 3.6% year over year against 1.3% growth reported in the prior-year quarter.
Operating Highlights
During the fiscal fourth quarter, general and administrative expenses came in at $13.9 million compared with $13.7 million reported in the prior-year quarter.
During the quarter, restaurant contribution margin declined 50 basis points year over year to 14.7%. In the fiscal fourth quarter, operating margin came in at (3.7%) against 1.3% reported in the year-ago quarter.
Adjusted net loss during the quarter came in at $3 million against income of $1 million reported in the prior-year quarter.
Adjusted EBITDA in the fiscal fourth quarter came in at $7.5 million compared with $9.1 million reported in the prior-year quarter. Balance Sheet
As of Jan 2, 2024, cash and cash equivalents totaled $3 million compared with $2.5 million as of Oct 3, 2023. At the end of the fiscal fourth quarter, outstanding debt amounted to $82.2 million compared with $65.4 million at the end of the third quarter of fiscal 2023.
2023 Highlights
Total revenues in fiscal 2023 amounted to $503.4 million compared with $509.5 million in fiscal 2022.
Adjusted EBITDA in fiscal 2023 came in at $33 million compared with $29.7 million in fiscal 2022.
In the fiscal 2023, adjusted loss per share came in at 11 cents compared with a loss of 2 cents reported in the previous year.
Fiscal 2024 Outlook
For fiscal 2024, the company anticipates total revenues to be between $510 million and $525 million, with comparable restaurant sales growth remaining steady or potentially increasing by up to 3%.
Restaurant-level contribution margins are projected in the range of 14-15%. General and administrative expenses are estimated to amount between $52 million and $55 million. Depreciation and amortization costs are expected to range from $32-$34 million, while net interest expenses are forecast to be between $8 million and $9 million.
The company plans to open 10-12 new company-owned restaurants and up to three franchise-owned establishments during the fiscal 2024.
Zacks Rank
Noodles & Company currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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