Noodles & Company appears to be gaining traction with its menu overhaul. But the company is also planning to close a lot more underperforming units this year than previously scheduled.
The fast-casual chain reported preliminary fourth quarter results on Monday because executives were scheduled to host investor meetings at the annual ICR Conference in Orlando.
For the fourth quarter, the company said same-store sales were up 6.6%, which reflected a 7.3% increase at company-owned units and a 3.8% increase at franchised locations. The preliminary results did not include traffic trends, though CEO Joe Christina said at the end of the third quarter that traffic was trending positive toward the end of the year.
Noodles is mostly company owned. The chain ended the quarter with 340 company-owned units and 83 franchised restaurants.
But the company also said it expects to close more underperforming restaurants than it had initially planned.
Last August, Noodles said it was planning to shutter between 28 and 32 restaurants in fiscal 2025.
But by the end of 2025, the company said it actually closed 42 locations, including 33 company-owned and nine franchised restaurants, in what Christina called a planned refining of the portfolio to concentrate resources on restaurants with the strongest opportunity to perform.
Last August, the company had also said it was planning to close another 12 to 17 locations in 2026. But on Monday, the company more than doubled that number, saying another 30 to 35 restaurants will close this year.
At the high end, that would mean the chain will be shrinking its unit count by more than 18% over two years.
“These actions are intended to strengthen the overall health of the brand and our financial position, helping to ensure we are well-positioned for profitable growth and long-term value creation for our shareholders,” Christina said in a statement.
Noodles, which has also been threatened with delisting from the Nasdaq stock exchange, last year said it was exploring strategic alternatives, including a possible sale.
Meanwhile, in December activist investor Bruce Galloway urged the chain to sell off about 200 of its company-owned restaurants by refranchising to pay off debt, arguing that it would remove the risk of bankruptcy.
Last year, Noodles & Company launched an attempted turnaround under previous CEO Drew Madsen, who stepped down at the end of August for health reasons, turning the reins to then president and chief operating officer Christina.
On Monday, Christina said the same-store sales growth in the fourth quarter built on the 4% increase in the third quarter last year, indicating strong momentum.
“This progress is being driven by disciplined execution, meaningful enhancements to our food, a compelling value proposition, engaged teams and the delivery of great guest experiences every day,” he said. “As we head into 2026, we are energized by the progress we are making and confident in our plan to develop winning teams, drive guest satisfaction, ignite growth and delivery improved financial results.”
Following the news, Noodles stock price climbed more than 17% in midday trading, reaching 89 cents per share. But the stock price has remained below the $1 mark required to for Nasdaq compliance.
The company has proposed a stock split, which it argues will allow the company to regain compliance. A shareholder meeting to vote on the proposal is scheduled for February.
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