8-K: Noodles & Company Q4 Sales Surge, Eyes 2026 Growth

Noodles & Company reported a 6.6% system-wide comparable restaurant sales increase in Q4 2025 and projects significant Adjusted EBITDA growth for 2026.

Summary

• Total revenue for Q4 2025 increased 0.8% to $122.8 million compared to $121.8 million in Q4 2024.
• System-wide comparable restaurant sales increased 6.6% in Q4 2025, with company-owned restaurants up 7.3% and franchise restaurants up 3.8%.
• Net loss for Q4 2025 was $6.8 million, or $1.16 loss per diluted share, an improvement from a net loss of $9.7 million, or $1.70 loss per diluted share, in Q4 2024.
• Adjusted EBITDA for Q4 2025 increased to $7.6 million compared to $4.0 million in Q4 2024.
• For the full fiscal year 2025, total revenue increased 0.4% to $495.1 million from $493.3 million in fiscal year 2024.
• Full fiscal year 2025 system-wide comparable restaurant sales increased 4.1%, including a 4.3% increase for company-owned and 3.2% for franchise restaurants.
• Net loss for fiscal year 2025 widened to $42.6 million, or $7.36 loss per diluted share, compared to a net loss of $36.2 million, or $6.37 loss per diluted share, in fiscal year 2024.
• Adjusted EBITDA for fiscal year 2025 was $22.5 million, down from $23.6 million in fiscal year 2024.
• The company opened two new company-owned restaurants and closed thirty-three in 2025, ending the year with 423 restaurants (340 company-owned, 83 franchise).
• Quarter-to-date comparable sales growth for the first quarter of 2026 is over 9%.
• A 1-for-8 reverse stock split became effective on February 18, 2026.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively due to strong Q4 2025 performance, accelerating sales momentum into Q1 2026, and an optimistic 2026 Adjusted EBITDA outlook, despite full-year 2025 losses.

Positives

• Strong Q4 2025 comparable restaurant sales growth of 6.6% system-wide, including a 7.3% increase for company-owned restaurants.
• Significant improvement in Q4 2025 net loss, narrowing to $6.8 million from $9.7 million in the prior year.
• Adjusted EBITDA nearly doubled in Q4 2025 to $7.6 million from $4.0 million in Q4 2024.
• Accelerated comparable sales growth in Q1 2026, with quarter-to-date growth exceeding 9%.
• Achieved seven consecutive months of comparable restaurant sales growth over 4%, with an average monthly growth of over 7% during that period.
• Positive customer response to new menu items, the 'Delicious Duos' value offering, and successful limited-time offers like Ramen and Steak Stroganoff.
• Strategic closure of underperforming stores has led to material sales transfer to nearby locations and improved margins.
• Projected significant growth in Adjusted EBITDA for fiscal year 2026, with an outlook of $30 million to $35 million.

Negatives

• Full fiscal year 2025 net loss widened to $42.6 million from $36.2 million in 2024.
• Full fiscal year 2025 Adjusted EBITDA decreased to $22.5 million from $23.6 million in 2024.
• Full fiscal year 2025 operating margin was (6.4)%, a decline from (5.6)% in 2024.
• Full fiscal year 2025 restaurant contribution margin decreased to 12.6% from 13.2% in 2024.
• A significant number of company-owned restaurants (33) were closed in 2025.
• Total stockholders (deficit) worsened to $(45.3) million as of December 30, 2025, from $(5.6) million as of December 31, 2024.
• Outstanding debt increased to $110.2 million as of December 30, 2025, from $100.7 million as of December 31, 2024.

Risks

• Uncertainties regarding the availability, suitability, structure, terms, and timing of any strategic transaction resulting from the strategic review.
• The potential impact of any strategic transaction on Noodles & Company and whether the strategic benefits can be achieved.
• Ability to obtain financing on acceptable terms, if at all, and comply with covenants under the A&R Credit Agreement.
• Ability to sustain or achieve overall growth, including digital sales growth.
• Ability to open new restaurants, if any, and ensure their success.
• Ability to effectively optimize the restaurant portfolio, including closures.
• Ability to achieve and maintain increases in comparable restaurant sales and successfully execute business strategy, including new restaurant initiatives and operational strategies.
• The success of brand strategy and marketing efforts, including the ability to successfully introduce new menu items and promotions.
• Impact of pricing strategies on sales and profitability.
• Economic conditions, including those resulting from inflation, increased interest rates, recessionary economic cycles, and changes in trade policies.
• Price and availability of commodities and other supply chain challenges.
• Ability to adequately staff restaurants and manage changes in labor costs.
• Ability to maintain compliance with requirements for continued listing on the Nasdaq Global Select Market.
• Other conditions beyond control such as domestic or global conflicts, wars, terrorist activity, weather, natural disasters, disease outbreaks, epidemics or pandemics impacting customers or food supplies.
• Consumer reaction to industry-related public health issues and health pandemics, including perceptions of food safety.

Future Outlook

Noodles & Company anticipates Q1 2026 comparable restaurant sales growth of approximately 9.0% and Adjusted EBITDA between $5.7 million and $6.3 million, which would more than double prior year results. For the full fiscal year 2026, the company projects total revenue of $478 million to $493 million, with comparable restaurant sales growth ranging from 6.0% to 9.0%. Restaurant level contribution margins are expected to be 14.7% to 16.0%, and Adjusted EBITDA is forecast to be $30 million to $35 million. The company plans to open 1 to 2 new franchise restaurants and close 30 to 35 company-owned restaurants and five franchised restaurants in 2026.

Management Comments

• "We are thrilled to report that the momentum we generated in the fourth quarter with nearly 7% same store sales growth and a near doubling of Adjusted EBITDA has further accelerated as we entered 2026, with quarter-to-date comparable sales growth of over 9%." Joe Christina, President and Chief Executive Officer.
• "We have now had seven consecutive months of comparable restaurant sales growth over 4% with average monthly comp growth of over 7% during that timeframe." Joe Christina.
• "These results are a direct reflection of the progress we made in the second half of 2025 and the deliberate decisions we took to strengthen the business." Joe Christina.
• "This included a strong favorable customer response to the new menu we introduced last year, which has been amplified by the introduction of the value oriented Delicious Duos offering and the success of craveable limited time offers including our first ever Ramen dish and the return of our popular Steak Stroganoff." Joe Christina.
• "Additionally, we have closed underperforming stores which has resulted in a material transfer of sales to nearby Noodles locations driven by our strong off-premise business. This sales growth has raised the baseline average unit volumes, while also improving margins." Joe Christina.
• "We are confident that the foundation we built in 2025 and the strong acceleration of sales in early 2026 positions us for sustained growth throughout 2026 and beyond." Joe Christina.

Industry Context

StockSavvy.ai notes that the restaurant industry, particularly the fast-casual segment, is highly competitive and sensitive to consumer spending habits, inflation, and labor costs. Noodles & Company's strategy of menu innovation, value offerings, and strategic store closures aligns with broader industry trends where brands are adapting to changing consumer preferences and optimizing their physical footprint for profitability. The strong comparable sales growth in Q4 2025 and early Q1 2026 suggests a successful pivot in a challenging environment, potentially outperforming some peers struggling with traffic and margin pressures.

Comparison to Industry Standards

• StockSavvy.ai observes that Noodles & Company's Q4 2025 comparable restaurant sales growth of 6.6% system-wide is robust, especially when compared to some larger fast-casual chains that have reported lower single-digit or even negative comparable sales in recent periods due to macroeconomic headwinds. For instance, while specific direct competitors' Q4 2025 results are not provided in the filing, many quick-service and fast-casual brands have seen traffic declines.
• The projected 2026 Adjusted EBITDA growth of $30 million to $35 million, more than doubling Q1 2025 results, indicates a strong recovery trajectory, potentially positioning Noodles & Company favorably against peers facing stagnant or declining profitability.
• The strategic closure of 33 company-owned restaurants in 2025, with plans for 30-35 more in 2026, reflects an aggressive portfolio optimization strategy, a trend seen across the restaurant sector as companies shed underperforming units to improve overall profitability and average unit volumes, similar to refranchising efforts or strategic closures by larger chains like Subway or even some casual dining brands.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential positive impact from improved Q4 performance, strong Q1 2026 momentum, and optimistic 2026 outlook, which could lead to increased share price. The 1-for-8 reverse stock split aims to increase per-share value and maintain Nasdaq listing, but reduces the number of shares held.
• Employees: Strategic restaurant closures (30-35 company-owned in 2026) may lead to job reductions in affected locations.
• Customers: New menu items, value offerings (Delicious Duos), and successful limited-time offers aim to enhance customer experience and attract new patrons.
• Creditors: Increased outstanding debt ($110.2 million) and a negative stockholders' deficit could be a concern, but improved Adjusted EBITDA and projected profitability for 2026 may strengthen the company's ability to service debt.
• Suppliers: Continued operations and projected revenue growth suggest ongoing demand for supplies, but strategic closures could impact local supplier relationships.

Next Steps

• Host a conference call on March 25, 2026, at 4:30 p.m. EST to discuss the financial results.
• Continue executing business strategy, including new menu initiatives and operational strategies to improve restaurant performance and guest satisfaction.
• Open 1 to 2 new franchise restaurants in fiscal year 2026.
• Close 30 to 35 company-owned restaurants and five franchised restaurants in fiscal year 2026.
• Maintain focus on fundamentals and disciplined execution to elevate the guest experience.

Key Dates

Recommendation

While Noodles & Company shows strong operational momentum with accelerating comparable sales and improved Q4 Adjusted EBITDA, the full-year 2025 results still reflect a widening net loss and a decline in full-year Adjusted EBITDA. The aggressive restaurant closure plan for 2026, while strategic, indicates ongoing portfolio optimization rather than pure expansion. The reverse stock split, often a sign of a company trying to boost its share price to maintain listing compliance, adds a layer of caution. The positive Q1 2026 outlook is encouraging, but the company needs to demonstrate sustained profitability and positive net income before a 'buy' recommendation is warranted. For now, the stock is a 'hold' as the company navigates its turnaround.

Keywords

Noodles & Company, NDLS, Restaurant Industry, Fast Casual, Earnings, Financial Results, Comparable Sales, Adjusted EBITDA, Restaurant Closures, Menu Innovation, Reverse Stock Split, 2026 Outlook, Q4 2025, Fiscal Year 2025