Casual restaurant chain Noodles & Company (NASDAQ:NDLS) reported results in line with analysts' expectations in Q1 CY2024, with revenue down 3.7% year on year to $121.4 million. The company's outlook for the full year was also close to analysts' estimates with revenue guided to $517.5 million at the midpoint. It made a non-GAAP loss of $0.13 per share, down from its loss of $0.05 per share in the same quarter last year.

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Noodles (NDLS) Q1 CY2024 Highlights:

• Revenue: $121.4 million vs analyst estimates of $121.4 million (small miss)

• EPS (non-GAAP): -$0.13 vs analyst estimates of -$0.17

• The company reconfirmed its revenue guidance for the full year of $517.5 million at the midpoint

• Gross Margin (GAAP): 14.8%, down from 15.6% in the same quarter last year

• Same-Store Sales were down 5.4% year on year

• Store Locations: 469 at quarter end, increasing by 8 over the last 12 months

• Market Capitalization: $80.65 million

Offering pasta, mac and cheese, pad thai, and more, Noodles & Company (NASDAQ:NDLS) is a casual restaurant chain that serves all manner of noodles from around the world.

Modern Fast Food

Modern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.

Sales Growth

Noodles is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefitting from better brand awareness and economies of scale.

As you can see below, the company's annualized revenue growth rate of 1.7% over the last five years was weak , but to its credit, it opened new restaurants and grew sales at existing, established dining locations.

This quarter, Noodles missed Wall Street's estimates and reported a rather uninspiring 3.7% year-on-year revenue decline, generating $121.4 million in revenue.

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Same-Store Sales

Noodles's demand within its existing restaurants has barely risen over the last eight quarters. On average, the company's same-store sales growth has been flat.

In the latest quarter, Noodles's same-store sales fell 5.4% year on year. This decline was a reversal from the 6.4% year-on-year increase it posted 12 months ago. We'll be keeping a close eye on the company to see if this turns into a longer-term trend.

Key Takeaways from Noodles's Q1 Results

It was good to see Noodles beat past analysts' EPS expectations this quarter, though it was still negative. On the other hand, its revenue slightly missed as its same-store sales fell 5.4% year on year. Overall, we think this was a mixed quarter. The stock is down 2.3% after reporting and currently trading at $1.7 per share.

So should you invest in Noodles right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.