Noodles & Company Plans to Shed 55 Restaurants in Next Few Months
Noodles & Company, the fast casual concept struggling with declining sales for better parts of the last year, has announced plans to close approximately 55 “underperforming” restaurants in the coming months.
The closures will affect roughly one in 10 of the 510 total units for the company. The company stated many of the restaurants targeted for closure opened recently in newer markets, where its brand awareness is not as strong. The closures are expected to take place in Q1 and Q2 of 2017.
While total revenue for the company increased 10-11 percent in the fourth quarter of 2016, comparable restaurant sales decreased approximately 1.3 percent system wide. Franchised locations, however, experienced a 2 percent increase.
In terms of repositioning the business, Noodles said in its recent investor presentation that the company will focus future company-owned expansion on well-established markets, while planning to refranchise restaurants in underpenetrated markets. The company plans on opening 12-15 company-owned restaurants in 2017 among the closures.
Noodles & Company’s stock has declined heavily since late July 2016, where it peaked at a $10.36 share price. Its price now sits at $3.90 per share.