NDLS earnings analysis
What we found in NDLS's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Noodles & Company delivered modest Q2 revenue growth to $127.037 million, supported by 10.3% system-wide comparable-sales growth, and substantially narrowed its GAAP operating loss to $1.540 million from $14.778 million a year earlier. Restaurant-level economics improved materially, with restaurant contribution margin reaching 17.2%, but revenue growth remains constrained by substantial restaurant closures and franchise-revenue contraction. Liquidity is tight at $1.3 million of cash against $105.4 million of debt, with a required refinancing or extension ahead of the July 27, 2027 credit-facility maturity.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue grew despite a smaller restaurant base
- Q2 revenue rose $0.604 million, or 0.5% year over year, to $127.037 million. Sequentially, revenue increased $3.251 million from implied Q1 revenue of $123.786 million, while system-wide comparable sales grew 10.3%.
- Operating loss improved sharply year over year
- Operating loss narrowed to $1.540 million, or a 1.2% operating margin, from a $14.778 million loss and an 11.7% loss margin a year earlier. The loss margin was modestly worse than the implied 0.7% Q1 2026 operating-loss margin.
- Restaurant-level profitability expanded
- Restaurant contribution margin expanded 4.4 percentage points year over year to 17.2%, from 12.8%. Cost of sales declined to 24.9% of restaurant revenue from 26.5%, and labor declined to 29.4% from 31.7%.
- Comparable sales and unit volumes accelerated
- Company-owned comparable sales increased 11.4% and franchise comparable sales increased 5.5%. Company-owned average unit volume increased 15.9% to $1.568 million from $1.353 million.
- First-half cash generation improved
- First-half operating cash flow increased to $9.321 million from $3.181 million, while investing cash use fell to $3.586 million from $6.318 million. The resulting first-half operating-cash-flow-less-investing outflow measure was positive $5.735 million.
- Adjusted EBITDA and impairment burden improved
- Adjusted EBITDA increased to $10.773 million from $6.016 million, although GAAP net loss remained $3.951 million. Restaurant impairments, closure costs and asset disposals fell to $5.527 million from $13.653 million.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Refinancing requirement remains material
- The company had $105.4 million drawn under its credit facility and only $1.3 million of cash at June 30, 2026. The facility matures July 27, 2027, and management states it will require new financing, other capital, or an extension/refinancing by that date.
- Closures offset comparable-sales growth
- The portfolio is contracting: 22 company-owned restaurants were permanently closed in the first two quarters of 2026, and management anticipates closing another 8 to 13 during 2026. Franchise royalties and fees declined $0.416 million, or 15.7%, to $2.236 million in Q2.
- Closure and impairment charges remain sizable
- Q2 still recorded $5.527 million of impairments, closure costs and asset disposals, including fixed-asset impairment at 8 restaurants and lease-related write-downs at 6 restaurants. Management also impaired 11 restaurants in the first half.
- Delivery fees and tariffs pressure costs
- Other restaurant operating costs increased to 20.3% of restaurant revenue from 19.7%, driven principally by a 0.9% impact from higher third-party delivery fees. Management expects tariffs may affect food, construction, equipment and other operating costs during the remainder of fiscal 2026.
- No formal risk-factor update; rate exposure persists
- Item 1A states there were no material changes to risk factors reported in the December 30, 2025 Form 10-K. Nonetheless, the filing quantifies variable-rate debt exposure: a 1.0% rate change would affect annualized pre-tax interest expense by approximately $1.1 million.
What they reported.
What the company itself reported, taken out of the document.
- Operating margin
- -1.2%
- Segment
- Company-owned restaurant revenue: $124.801 million, up $1.020 million (0.8%) year over year.
- Segment
- Franchising royalties, fees and other revenue: $2.236 million, down $0.416 million (15.7%) year over year.
What they said about what is next.
The 10-Q does not provide numeric revenue or EPS guidance. Management expects fiscal-2026 capital expenditures of approximately $9.0 million to $10.0 million, including $5.0 million to $6.0 million in the remainder of the year, and does not plan to open company-owned restaurants in 2026.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 6, 2026
- Noodles & Company (NDLS) reported Q4 for 2026, with total revenue of $122.8 million, rising slightly from $122 million in Q3 2025, reflecting a positive trend in revenue compared to prior quarters. The diluted EPS loss…
- 10-K · March 26, 2026
- Noodles & Company reported a modest revenue increase to $495.1 million in FY2025, driven by a 4.3% rise in comparable sales at company-owned outlets. Despite facing significant challenges including closures of…
- 10-Q · November 6, 2025
- Noodles & Company's Q3 2025 results indicate flat revenue and continued operational challenges due to permanent restaurant closures. While total revenues slightly decreased by 0.5% to $122.1 million sequentially, they…
- 10-Q · August 14, 2025
- Noodles & Company reported a challenging Q2 2025, with revenue of $126.4 million, reflecting a 0.7% decline year-over-year. The net loss expanded to $17.6 million from $13.6 million year-over-year, leading to a diluted…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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