Noodles & Company Reports Slight Revenue Increase and Improved Net Loss in Q2 Fiscal 2026

Noodles & Company reported its financial results for the second quarter of fiscal 2026, revealing a total revenue of $127.0 million, a slight increase of 0.5% from $126.4 million in the same quarter of the previous year. The growth was primarily driven by a 10.3% increase in system-wide comparable restaurant sales, which included an 11.4% rise at company-owned locations. However, this was partially offset by the impact of 52 permanent closures of company-owned restaurants and a decline in franchise revenue due to 13 franchise closures over the past year. The company recorded a net loss of $3.951 million, significantly improved from a loss of $17.552 million in the prior year’s quarter.

In terms of operational efficiency, Noodles & Company saw a decrease in total costs and expenses by 8.9%, down to $128.6 million from $141.2 million. This reduction was attributed to lower costs in several areas, including a 5.6% decrease in the cost of sales and a 6.5% reduction in labor costs. The company also reported a significant decline in restaurant impairments, closure costs, and asset disposals, which fell to $5.5 million from $13.7 million in the previous year. The improved operational metrics contributed to a loss from operations of $1.540 million, a notable improvement compared to a loss of $14.778 million in the same quarter last year.

Noodles & Company continues to focus on strategic initiatives, including a review of its restaurant portfolio. The company has closed 22 restaurants in the first two quarters of 2026 and plans to close an additional 8 to 13 locations by the end of the fiscal year. The closures are part of a strategy to optimize performance by eliminating underperforming locations. As of June 30, 2026, the company operated 396 restaurants across 30 states, comprising 318 company-owned and 78 franchise locations.

The company’s financial position remains under scrutiny, particularly regarding its debt obligations. As of June 30, 2026, Noodles & Company had $105.4 million in outstanding debt under its Amended and Restated Credit Agreement, which matures on July 27, 2027. The company is currently evaluating options for refinancing or extending this debt, as it will require new financing or other sources of capital to meet its obligations. Despite these challenges, Noodles & Company reported a net cash provided by operating activities of $9.3 million for the first two quarters of 2026, a significant increase from $3.2 million in the same period last year.

Looking ahead, Noodles & Company anticipates continued growth in comparable restaurant sales, supported by menu innovations and successful limited-time offerings. However, the company remains cautious about external factors such as inflation, labor costs, and supply chain challenges that could impact its financial performance. The management has indicated that while they expect to maintain compliance with debt covenants, the need for strategic alternatives remains a priority as they navigate the evolving market landscape.