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DATE

Wednesday, November 5, 2025 at 4:30 p.m. ET

CALL PARTICIPANTS

Chief Executive Officer — Joseph D. Christina

Chief Financial Officer — Michael Hynes

Chief Operating Officer — Andrew H. Madsen

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RISKS

The company reported a net loss of $9.2 million, or $0.20 per diluted share, in Q3 2025, compared to a net loss of $6.8 million, or $0.15 per diluted share, in Q3 2024, including a $5.3 million non-cash impairment charge related to planned restaurant closures.

Cost of Goods Sold increased by 20 basis points to 25.7% of sales in Q3 2025, due to higher food costs from new menu offerings and inflation, partially offset by menu pricing, and vendor rebates.

Other restaurant operating costs rose 40 basis points to 20.5% in Q3 2025, mainly from higher third-party delivery fees and increased marketing expenses.

TAKEAWAYS

System-Wide Comparable Restaurant Sales – Up 4.0% in Q3 2025, with company-owned restaurants up 4.0%, and franchise restaurants up 4.3%.

October Comparable Sales – Accelerated to 8.0% growth, including over 1.5% traffic growth, and a 1% traffic benefit from sales transfer due to store closures in October 2025.

Average Check – Increased by 4.6% in Q3 2025, including 2.0% effective menu pricing, with additional sequential check increases of over 6% in Q4 2025 to date after lapping the prior year’s heavy promotions.

Company Average Unit Volumes – Grew by 5.4% to $1.34 million in Q3 2025.

Restaurant Contribution Margin – Expanded by 40 basis points to 13.2% in Q3 2025 on higher comp sales, cost discipline, and the closure of underperforming locations.

Adjusted EBITDA – Increased 33% to $6.5 million for Q3 2025, with a $300,000 benefit from recent closures.

Third-Party Delivery Sales – Up 12% year-over-year in Q3 2025, driving meaningful digital channel growth, and increased loyalty program engagement.

Closure Initiatives – 15 company-owned and 3 franchise restaurants closed in Q3 2025; on track for 31 to 34 company-owned closures in 2025, with an expected 30% sales transfer to nearby units and over $2 million positive impact forecast for 2026 restaurant-level contribution.

Cash and Liquidity – Ended Q3 2025 with $4.7 million available cash, $109.8 million in debt, and over $12 million undrawn on the credit facility.

Full-Year 2025 Guidance Update – Revenue of $492 million to $495 million; comp sales growth of 3.6% to 4.2%; restaurant contribution margin of 12.3%-12.7%; G&A expenses of $48 million-$49 million; D&A of $28 million-$29 million; interest expense around $11 million; capex of $12 million-$13 million; and over $5 million in 2025 cost savings targeted.

Strategic Alternatives Review – Board review of options, including refinancing or financial transactions, ongoing with no decisions or timetable announced.

Operations and Menu Innovation – Well, seeing that our mix has been steady at 4% to 5%, we believe it’s bringing in both new and existing guests. When we get them into the restaurant, we have seen our teams really upsell to other parts of our menu, including our new menu items. The guests are trying them also, so I think it’s working for us in both ways—driving guests to our brand and then also being able to elevate to other parts of the menu that we launched earlier in the year, according to Joseph D. Christina.

SUMMARY

Noodles & Company (NDLS 3.53%) reported a slight decrease in revenue and rising sales momentum, driven by menu innovation, expanded digital engagement, and disciplined closure of underperforming restaurants. Year-over-year restaurant traffic turned positive in the second half of Q3 2025 and accelerated into October 2025, as new value offers and product launches attracted incremental guests. Management communicated an ongoing strategic review process and cost initiatives designed to further drive profitability and margin improvement.

Michael Hynes stated, “The loss in 2025 included a $5.3 million non-cash impairment charge related to our decision to close underperforming restaurants.”

Third-party digital channel growth and loyalty program activation contributed to increased sales frequency and broadened brand reach.

Labor costs as a percentage of sales decreased in Q3 2025, primarily due to higher sales leverage.

The company is targeting continued closure of negative-contribution units and expects incremental margin and adjusted EBITDA benefits to materialize in 2026.

INDUSTRY GLOSSARY

Comparable Restaurant Sales (Comp Sales): Year-over-year sales performance metric for restaurants open at least 18 months, excluding newly opened or closed units.

Delicious Duo Platform: Noodles & Company’s value-oriented menu bundle introduced in July 2025, offering guests a combination of menu items at a competitive price point.

LTO (Limited-Time Offer): A menu item offered for a specific, time-limited promotional window.

Full Conference Call Transcript

Joseph D. Christina: Thanks, Michael, and good afternoon. I appreciate the opportunity to share our results for the quarter with you, including the accelerated sales we have seen in the third quarter and further in October. I have been in the CEO role for just a couple of months after joining the company earlier this year as President and COO, and I could not be more proud of the work happening across this organization. From our restaurant teams to our support center, everyone has rallied behind our purpose and our commitment to deliver great food and an exceptional guest experience. I am thrilled with our recent sales trend, which has significantly outperformed the fast-casual benchmark.

Comparable sales grew 4% in the third quarter, and that momentum accelerated even further in October to a robust 8% increase in comparable sales, well above the industry average, with traffic up over 1.5%. All of this has been achieved despite a difficult consumer environment. These results are not by chance but the outcome of deliberate, focused efforts across the business.

The success of our new menu rollout earlier this year, which has delivered noticeably improved food to our guests, the strong value proposition of our Delicious Duo platform introduced in late July, the excitement around our chili garlic ramen limited-time offer, and the impact of our enhanced marketing and operational execution are all working together to strengthen the relevance of the Noodles brand. That momentum has driven enthusiasm among our guests and energized our team members. We are building a foundation for sustained growth, and I’m confident in the path ahead. We are seeing meaningful year-over-year improvement in our digital sales channel, driven largely by third-party delivery, which increased 12%.

Digital remains a critical growth engine for Noodles, strengthening both awareness and accessibility while aligning with our overall sales performance trends. We have also seen increased enrollment and engagement in our Noodles Reward program, supported by targeted promotions such as our thirtieth anniversary offer and our early access Ramen launch for reward members. These efforts continue to build loyalty and deepen our connection with guests, reinforcing the role digital plays in driving frequency and relevance for the brand. Another important contributor is the introduction of our Delicious Duo platform in late July. This value offering brings the new menu flavor and quality we are so proud of to our guests at an accessible price point.

The early results show that guests view Duos as an everyday option, rather than a limited-time promotion, allowing them to make noodles a regular part of their dining routine. The platform is expanding our reach and reinforcing our value credibility while maintaining brand equity and profitability. Our focus on meeting guests where they are, delivering real value, and providing an exceptional experience is driving consistent improvement in same-store sales, and we believe this momentum will continue into the coming quarters. I’m especially encouraged by the momentum we are seeing in our sales trends.

As I noted earlier, October was a very strong month, with comp sales accelerating to positive 8%, reflecting continued strength of our brand and the appeal of our recent initiatives. October was particularly strong thanks to the continuing momentum from our Delicious Duos, this item has resonated with guests, including younger guests visiting Noodles for the first time. The power of thoughtful menu evolution, a fresh expression of global flavor trends, and an unexpected yet approachable twist on a familiar comfort food. Together, these elements capture guest curiosity and enthusiasm evidenced by strong trial and early repeat performance.

Strategically, the Ramen represents how we continue to push our menu forward, introducing bold, differentiated flavors that feel both new and true to our brand. Supported by a distinctive creative platform and a well-integrated media plan, this limited-time offer translated culinary innovation into cultural relevance, driving excitement, traffic, and brand buzz that has extended well beyond the initial launch window. In the fourth quarter, we are lapping over a period of heavy promotions and discounts that we chose not to repeat this year. As a result, we are seeing an over 6% increase in average check quarter to date, a trend we expect to continue through Thanksgiving.

Even against a discount-heavy comparison, our year-over-year traffic is positive over 1.5% quarter to date, extending a positive traffic trend that began midway through the third quarter. This performance speaks to the quality of our offerings, the strength of our value platform, and the growing relevance of the Noodles brand. Turning to earnings and margin growth, we continue to make disciplined decisions that strengthen our business and position us for sustained profitability. One of the most significant levers we can pull is the strategic closure of underperforming restaurants. We are approaching these closures thoughtfully, focusing on locations where we can effectively transfer sales to nearby restaurants given a high mix of off-premise revenue.

From the restaurants we plan to close, we expect to retain approximately 30% of sales through transfer to neighboring units, consistent with the performance of recent closed locations. These actions improve overall sales leverage and enhance restaurant-level profitability and efficiency. These closures are never easy, but they are the right ones for the long-term health of the brand. By tightening our portfolio and focusing on high-performing restaurants and markets, we can strengthen operations, elevate the guest experience, and focus on innovation that drives continued growth in sales and margin.

Our adjusted EBITDA is expected to meaningfully improve as a result of these initiatives, driven by the elimination of negative-earning restaurants and the ability to reduce certain overhead expenses associated with a smaller store base. In the third quarter, our restaurant contribution margins improved 40 basis points, reflecting not only higher comparable sales and the closure of underperforming restaurants but also our continued focus on managing costs even as sales improve. Strengthening margin remains critical to the success of our operating model, and we will stay focused on driving additional improvements in the quarters ahead.

Importantly, our third quarter adjusted EBITDA improved by $1.6 million or approximately 33% as a result of the sales improvement I described together with our cost controls. As we look ahead, our focus remains on our key priorities to strengthen operations, drive innovation, and improve overall profitability. Since launching our operations Coaching Program earlier this year, we have made meaningful progress. This program focused on what matters most to our guests: order accuracy, speed of service, taste of food, and hospitality. We’re addressing each of these areas through targeted training and accountability.

To date, our dedicated coaching team has visited nearly 200 restaurants, working side by side with operators to identify opportunities, build on each restaurant’s strengths, and elevate performance across the system. This investment is already showing results with increased guest satisfaction and helping us deliver a more consistent and elevated guest experience across the brands. On the culinary front, we are keeping the momentum going with exciting new menu and marketing initiatives. In December, we will introduce our newest holiday crispy, created in a collaboration with one of America’s favorite candy bars. Additionally, early next year, we’ll bring back one of the most requested fan favorites, answering the call from guests who can’t wait to see it return.

In parallel, we are also seeing continued growth in our digital and third-party channels, which remain powerful drivers of awareness, convenience, and incremental sales. These efforts reinforce our position as a brand that offers both variety and innovation, meeting the evolving taste of today’s guests while staying true to who we are. From a financial perspective, we continue to make disciplined decisions that position Noodles for long-term success. In addition to the restaurant closures, we’re executing a comprehensive cost savings plan that is on track to deliver more than $5 million in savings across our P&L in 2025.

Andrew H. Madsen: We will build on that progress in 2026 with a focus on optimizing our labor model, reducing food waste, and improving efficiencies across every part of our P&L. At the same time, we are becoming increasingly efficient and effective with our marketing investments, ensuring every dollar works harder to drive business impact. Through insights from our media mix model, we have optimized our media strategy to better balance reach and return, shifting spend towards the channels and tactics that deliver the strongest ROI. Our refined audience targeting also seeks to ensure we are reaching the right guests with the right message, maximizing both relevance and conversion.

Together, these efforts are strengthening profitability for the company and our franchise partners while building a smarter, more agile business ready to capture future growth. Before I turn it over to Mike, I’d like to provide an update on an announcement we made in September. As previously shared, our Board of Directors has initiated a review of strategic alternatives to explore ways to maximize shareholder value. The process may include a range of potential options, such as refinancing existing debt, or other strategic or financial transactions.

Michael Hynes: No decisions have yet been made.

Andrew H. Madsen: And there are no set timetables for completion. Until the review is completed, we will not provide additional commentary. With that, I will turn it over to Mike to review our third-quarter financial highlights and full-year guidance.

Michael Hynes: Thank you, Joe. In the third quarter, our total revenue decreased by 0.5% compared to last year to $122.1 million. System-wide comp restaurant sales during the third quarter increased by 4%, including an increase of 4% at company-owned restaurants and an increase of 4.3% at franchise restaurants.

Andrew H. Madsen: Company comp traffic during the third quarter decreased slightly by 0.6%, though was positive in the second half of the third quarter, and average check increased by 4.6%.

Michael Hynes: Inclusive of 2% effective pricing during the quarter.

Andrew H. Madsen: Company average unit volumes in the third quarter increased by 5.4% to $1.34 million. As Joe mentioned, we saw comp sales improve sequentially in the third quarter. July was positive 1.6%, August was positive 4.5%, and September was positive 5.5%. We’re excited to see that momentum accelerate into the fourth quarter with our October comp sales positive at 8%.

Michael Hynes: Turning to profitability, we’re especially encouraged that our top-line momentum translated into year-over-year restaurant-level margin growth, increasing to 13.2% from 12.8% in 2024. COGS in the third quarter were 25.7% of sales, a 20 basis point increase from last year, which was primarily driven by higher food costs associated with our new menu offerings and inflation.

Andrew H. Madsen: Partially offset by the combination of menu price and vendor rebates. Our food inflation in the third quarter was approximately 2%.

Michael Hynes: Labor costs for the third quarter were 31.4% of sales,

Andrew H. Madsen: which was down 60 basis points to the prior year.

Michael Hynes: Primarily due to the benefit of sales leverage.

Andrew H. Madsen: Partially offset by wage inflation. Hourly wage inflation in the third quarter was 2.5%. Occupancy costs in the third quarter decreased to $11.1 million compared to $11.5 million in 2024 due to a reduction in our company-owned restaurant count over the last twelve months.

Michael Hynes: Other restaurant operating costs increased by 40 basis points in the third quarter to 20.5%. The increase in other restaurant operating costs was primarily driven by a combination of higher third-party delivery fees from higher third-party delivery channel sales and higher marketing expenses, which were mostly offset by sales leverage.

Andrew H. Madsen: G&A in the third quarter was $12.3 million compared to $12.9 million in 2024, primarily due to a decrease in expenses related to our annual summit and a decline in obsolete inventory costs. Net loss for the third quarter was $9.2 million or a loss of $0.20 per diluted share, compared to a net loss of $6.8 million or a loss of $0.15 per diluted share last year.

Michael Hynes: The loss in 2025 included a $5.3 million non-cash impairment charge related to our decision to close underperforming restaurants.

Andrew H. Madsen: Adjusted EBITDA for the third quarter was $6.5 million compared to $4.9 million in 2024, an increase of nearly 33%. In the third quarter, we closed 15 company-owned restaurants and three franchise restaurants. Our third-quarter capital expenditures totaled $3.7 million compared to $7.1 million in 2024. At the end of the third quarter, we had $4.7 million of available cash, and our debt balance was $109.8 million, with over $12 million available for future borrowings under our revolving credit facility. In August, we announced an expanded effort to close underperforming restaurants on or before lease end dates. Through October, we’ve closed 29 company-owned restaurants,

Michael Hynes: and we’re on schedule to close a total of 31 to 34 company-owned restaurants by 2025.

Andrew H. Madsen: We continue to be pleased with the results from closing underperforming restaurants.

Michael Hynes: The closures removed restaurants with negative cash flow from our system, and post-closure, we’re seeing nearby Noodles restaurants experience an increase in sales and profits. We expect the closure of underperforming restaurants in 2025 to positively impact 2026 restaurant level contribution by over $2 million.

Andrew H. Madsen: Based on the positive results we’ve seen over the last year from closing underperforming restaurants, we will continue to monitor our portfolio of restaurants carefully to optimize our overall financial performance.

Michael Hynes: Turning to our full-year guidance for 2025, we’re revising our expectations based on our recent positive trends. For the full year 2025, we are providing the following guidance: Total revenue of $492 million to $495 million, including comp restaurant sales growth of 3.6% to 4.2%. Restaurant contribution margin between 12.3% and 12.7%.

Andrew H. Madsen: General and administrative expenses of $48 million to $49 million, inclusive of stock-based compensation expense of approximately $3.3 million. Depreciation and amortization expense of $28 million to $29 million. Interest expense of approximately $11 million, and we estimate total 2025 capital expenditures of $12 million to $13 million. For further information regarding our 2025 expectations, please see the business outlook section of our press release. With that, I’d like to turn the call back over to Joe for final remarks. Thanks, Mike.

Joseph D. Christina: As I look across the business, I am confident that the work we have done this year is paying off. We are building a more relevant brand, providing greater value and variety for our guests, and setting the stage for sustainable growth in the quarters ahead. Thank you for your time today. I now turn the call back over to the operator.

Operator: Thank you. At this time, we’ll be conducting a question and answer session. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. One moment, please, while we poll for questions. Please proceed with your question.

Todd Brooks: Hey. Great. Thanks, and thanks for taking my questions. Congratulations on the momentum of the business. It’s great to see. I know there’s a lot of work that went into this over the last couple of quarters, so nice to see that paying off. If I can dig in first of all on the Duos success there, can we talk through how Duos are mixing or how you look at value on the menu? Just trying to figure out consumers accessing via value and then what they do upon repeat.

Joseph D. Christina: Hey, Todd. It’s Joe Christina. Thanks for the question. Yeah, Delicious Duos, since we launched it in late July, certainly fills a void of value that we had with our guests. We are mixing around 4% to 5% depending on the restaurant. What we’re encouraged by is we see that throughout the business, not just during lunch or dinner, or on our third-party platforms. So a strong mix, and we see that kind of halo effect of the Delicious Duos with our guests. We continue to get good value scores from our guests that show us that it’s working on the value platform against our competition.

Todd Brooks: Yeah, that’s great. I know it’s early with a July launch, but what are you seeing for repeat frequency for customers that access the brand originally through Duos? And do they trade around the menu, or is a Duo customer typically a Duo customer on the first visit?

Joseph D. Christina: Well, seeing that our mix has been steady at 4% to 5%, we believe it’s bringing in both new and existing guests. When we get them into the restaurant, we have seen our teams really upsell to other parts of our menu, including our new menu items. The guests are trying them also, so I think it’s working for us in both ways—driving guests to our brand and then also being able to elevate to other parts of the menu that we launched earlier in the year.

Todd Brooks: Okay, thanks, Joe. And then, Mike, if we look at October’s 8% results, amazing. It’s great to see. I think you talked about traffic being 1.5%. How do we get our minds around kind of organic traffic versus the contribution from sales transfer to the same-store sales traffic number from the stores that you have closed, that you’ve seen that kind of sales transfer to existing stores?

Michael Hynes: Sure. Yeah. And we are experiencing a sales lift from our closures, and the closures have really been weighted towards the back half, so we’re really seeing that accelerate in October. That was about a 1% or 100 basis point lift for us, and hopefully, that will continue as we expand the effort.

Todd Brooks: But that’s great. You’re still positive traffic outside of the sales, which is excellent to see as well.

Joseph D. Christina: Just as a reminder, October, we had heavy discounting going on, and so for us to have positive traffic in October up against those comps is really encouraging.

Todd Brooks: Okay, great. And then, you talked about the success with the Ramen LTO. Learnings from that, thoughts on kind of rotating between Ramens, but as a permanent kind of menu category on the menu? Just what are your thoughts coming out of the strength of that recent offering?

Joseph D. Christina: Yeah. It’s too early to tell if it’s something that we need to have permanently on our menu. It’s working. Both trial and repeat business is there. It’s a bold dish for us with a bold taste that fits our platform. We believe there’s a future for ramen on our menu—whether it is a permanent item or an LTO in the future. We’re excited about that as well. The price point with ramen has brought guests in and really got our repeat trial going. So we’re very excited about and encouraged by the results of Raman, and we’ll continue to monitor through the rest of the promotion to see where it goes.

Todd Brooks: And what’s the window for that LTO, Joe?

Joseph D. Christina: It’s slated to end by the end of the year.

Todd Brooks: Okay. And did it start at the start of the quarter or earlier than that?

Joseph D. Christina: It started in October.

Todd Brooks: Great. Thank you both. I’ll jump back in the queue.

Operator: Our next question comes from the line of Andy Barish with Jefferies Group. Please proceed with your question.

Andrew Barish: Hi. This is actually Ivan on for Andy. Thanks for taking our question. I just wanted to maybe follow up on one of Todd’s questions and see if you’d be willing to share what the benefit from the underperforming closures was, particularly on margins for this quarter. I know you guys talked about the contribution looking ahead. Just curious if you were starting to see some of that in the near term as well.

Andrew H. Madsen: Yes. Just on the Q3 EBITDA, the closures did benefit us but to a limited extent because the closures have been back-weighted where a lot were happening in September and October.

Michael Hynes: So it’s about $300,000 of benefit to adjusted EBITDA in the quarter.

Ivan: Got it. And then, you know, any way to unpack sort of your comments about the fourth quarter and the check benefit that you’ve been seeing as you lapse some of the promotions in the prior year? Does that fall off relatively significantly beyond Thanksgiving and into December? Just trying to see, you know, how kind of to wrap our heads around the magnitude of that impact.

Andrew H. Madsen: Yes. Most of the impact of the discounts from last year does fall off post-Thanksgiving, so as we get into December, you should see a much more normal year-over-year check increase.

Ivan: Gotcha. And just to confirm, that plus the sales transfers, are all embedded in the guidance for the full year and fourth quarter implied?

Michael Hynes: Correct.

Ivan: That’s helpful. Thank you very much.

Operator: We have reached the end of the question-and-answer session, and this concludes today’s conference. You may disconnect your lines at this time, and we thank you for your participation.