Back to top

Image: Bigstock

Noodles & Company (NDLS) Q3 Earnings Beat Estimates, Up Y/Y

Read MoreHide Full Article

Noodles & Company (NDLS - Free Report) reported mixed third-quarter 2019 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. The top line lagged the consensus mark, after beating the same in the preceding two quarters.

Its adjusted earnings of 9 cents per share surpassed the Zacks Consensus Estimate of 7 cents by 28.6%. The bottom line also increased 125% from the year-ago figure.

Revenues totaled $118.3 million, which lagged the Zacks Consensus Estimate of $120 million. However, the top line increased 1.4% on a year-over-year basis. The upside was primarily driven by an increase in comparable restaurant sales and restaurant openings.

During the third quarter, it opened three new company-owned restaurants and closed two. Markedly, its portfolio at the end of the reported quarter had 458 restaurants that comprised 391 company-owned restaurants and 67 franchise restaurants. Notably, it has already opened one company-owned restaurant in the fourth quarter and is on track to reach the total count of five restaurant openings in 2019.

Comps Discussion

In the third quarter, Noodles & Company’s system-wide comps increased 2.1% compared with a gain of 5.5% in third-quarter 2018. Company-owned and franchise restaurant comps also increased 2.2% and 1.6% compared with gain of 5.2% and 7.6% in third-quarter 2018, respectively. Notably, this marked the company’s sixth consecutive quarter of comparable sales growth.

Comps in the quarter were favored by the successful implementation of various culinary, operational and digital initiatives, which also drove average unit volume (AUV) and margin expansion.

Costs & Margins

Total costs and expenses in the third quarter slipped 1.2% due to sharp decline in restaurant impairments, closure costs and asset disposals. However, labor costs and general and administrative expenses increased in the quarter.

Restaurant contribution margin increased 70 basis points to 17.1% in the third quarter from 16.4% in the year-ago quarter. This uptick is attributable to leverage on higher AUV and lower utilities costs, partially offset by rise in third-party delivery fees.

Noodles & Company Price, Consensus and EPS Surprise

 

Noodles & Company Price, Consensus and EPS Surprise

Noodles & Company price-consensus-eps-surprise-chart | Noodles & Company Quote

Balance Sheet

Total current assets as of Oct 1, 2019 amounted to roughly $19.7 million, down from $23.4 million on Jan 1, 2019. However, long-term debt in the quarter amounted to $42 million, down from $44.2 million on Jan 1, 2019.

Total stockholders’ equity as of Oct 1, 2019 totaled $51 million, down from $52.7 million on Jan 1, 2019.

Other Details

During the first three quarters of the year, total revenues inched up 1.1% year over year to $348.5 million. This was backed by a rise in comparable restaurant sales, which offset the impact of company-owned restaurant closures since 2018.

System-wide comps in the first three quarters increased 3.3%, including 3.4% and 2.7% growth of company-owned and franchise restaurants, respectively.

2019 View

The company expects adjusted earnings per share in the range of 14-18 cents, up from the prior expectation of 8-16 cents. Restaurant contribution margin is expected to be 16% compared with the prior guided range of 15.5-16.5%. Total revenues are expected in the range of $466-$470 million. Comps in 2019 are expected within 3-4% versus the earlier guidance range of 3-5%. Capital expenditure is expected in the range of $17-$19 million compared with prior projection of $14.5-$19 million.

Zacks Rank & Peer Releases

Noodles & Company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dunkin' Brands Group, Inc. (DNKN - Free Report) reported mixed results in third-quarter 2019, wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same. Its adjusted earnings of 90 cents per share surpassed the consensus estimate of 81 cents by 11.1%. Revenues were up 1.7% year over year to $355.9 million but missed the consensus mark of $359 million.

Brinker International, Inc. (EAT - Free Report) reported mixed first-quarter fiscal 2020 results, wherein earnings were in line with the Zacks Consensus Estimate but revenues lagged the same. Adjusted earnings of $41 cents per share declined 12.8% from the year-ago quarter, mainly due to increase in stock-based compensation expenses for newly retired executives. Quarterly revenues totaled $786 million, which missed the consensus mark of $788 million but improved 4.3% on a year-over-year basis.

Chipotle Mexican Grill, Inc. (CMG - Free Report) reported third-quarter 2019 results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate. The company’s adjusted earnings of $3.82 per share surpassed the Zacks Consensus Estimate of $3.20. The bottom line also improved 76.9% from the year-ago quarter, driven by increased revenues and strong operating margins. Quarterly revenues of $1.4 billion surpassed the consensus estimate by 1.8% and improved 14.6% year over year.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>

Published in