After years of sliding traffic and shuttered storefronts, Noodles & Company is facing a moment of truth. The pasta-focused chain announced it is reviewing “strategic alternatives” — finance-speak for refinancing, refranchising, or even putting itself up for sale.
The company hasn’t set a timeline and has made clear that nothing is guaranteed. Piper Sandler, a financial services firm, has been tapped to advise on the process. CEO Joe Christina framed the move as a way to “more effectively maximize value for our shareholders” after a rocky stretch.
The Temporary Turnaround
Earlier this year, Noodles & Company rolled out a big menu transformation: new dishes, revamped classics, and a stronger value pitch. For a moment, it worked. First-quarter revenues were up 2% year-over-year, with same-store sales climbing 4.4%.
But by summer, the glow had faded. Rising food costs, steeper marketing bills, and value-conscious diners forced the brand to close 21 of its more than 450 locations as part of broader restructuring efforts. Second-quarter earnings revealed revenues dipping 0.7%, and traffic slowed as customers pulled back on discretionary spending.
Former CEO Drew Madsen admitted adoption of the new menu was slower than expected, noting that affordability has become the biggest factor shaping guest behavior.
To address those concerns, the chain tested “Delicious Duos” — a $9.95 combo of a small entrée with protein and a side. The July launch brought encouraging results, with comps up 4.5% in August.
Still, closures kept coming: six company-owned and two franchise restaurants shuttered during the quarter.
The Market’s Verdict
Beyond the dining room, Wall Street hasn’t been kind. In June, Nasdaq sent a warning after Noodles’ shares stayed below $1 for over 30 consecutive trading days. It was the second notice in six months.
As of September 4, shares closed at $0.69, down more than 54% in the past year.
For Noodles & Company, the strategic review underscores the stakes. The brand has been trying to reinvent itself for years. Now, whether that means a new financing structure, a fresh franchise strategy, or an outright sale, the clock is ticking.
Source: The Street