Gold prices bounce off 3-week lows; demand likely longer term
On Monday, Benchmark analyst Todd Brooks maintained a Buy rating and a $3.00 price target for Noodles & Co. stock (NASDAQ:NDLS). The company’s fourth-quarter 2024 operating results prompted this decision, with particular emphasis on the revenue and same-store sales (SSS) figures that had been previously announced at the ICR Conference.
Noodles & Co. provided additional revenue information, disclosing that quarter-to-date SSS are exceeding 3%, bolstered by an uptick in customer traffic. However, the restaurant-level margin declined to 11.2%, a 350 basis point drop year-over-year. This decrease was attributed mainly to a 230 basis point rise in the cost of goods sold. Consequently, the company’s margins fell short of expectations by 50 basis points.
The lower-than-anticipated margins resulted in adjusted earnings per share (AEPS) of $(0.21) and adjusted earnings before interest, taxes, depreciation, and amortization (AEBITDA) of $4.0 million. These figures did not meet consensus projections, which were $(0.12) for AEPS and $4.2 million for AEBITDA, respectively.
Despite these challenges, the analyst’s reiteration of a Buy rating indicates a continued positive outlook on the stock. The $3.00 price target remains unchanged, suggesting that Benchmark sees potential for Noodles & Co.’s stock performance to align with their expectations in the future.
In other recent news, Noodles & Company reported disappointing financial results for the fourth quarter of 2024, missing both earnings and revenue expectations. The company posted an earnings per share (EPS) of -$0.21, which fell short of the anticipated -$0.10, and reported revenue of $121.8 million, slightly below the forecasted $124.38 million. The company’s total revenue decreased by 2% year-over-year, and it recorded a net loss of $9.7 million. Despite these challenges, Noodles & Company is undergoing a significant menu transformation, introducing new and improved dishes, which might be contributing to early Q1 2025 results showing over 3% comparable sales growth.
Looking ahead, the company projects its 2025 revenue to be between $503 million and $512 million, with plans to introduce nearly two-thirds of its menu as new or improved items. The company’s strategic focus on menu innovation and operational improvements reflects an attempt to address ongoing financial strains. Meanwhile, Noodles & Company’s leadership emphasized their confidence in driving a brand resurgence through these initiatives. Additionally, the company’s debt balance stood at $103 million at the end of 2024. These developments come amid broader industry challenges, including macroeconomic pressures and increased food costs.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.