Dive Brief:
- Noodles & Company increased systemwide same-store sales by 4.4% and traffic by 1.8% during Q1 2025, CEO Drew Madsen said during a Wednesday earnings call.
- Madsen credited the chain’s nine-menu-item update from mid-March as well as increased marketing and brand awareness for bringing customers back to the chain and for driving increased spending.
- Noodles & Company, which posted negative 5.4% systemwide comp sales in the year ago quarter, outperformed fast casual giants, including Chipotle and Wingstop, in Q1 2025 as consumers cut back on restaurant spending amid economic uncertainty.
Dive Insight:
A menu refresh was a key part of Madsen’s turnaround strategy when he became permanent CEO in March 2024. The update initially began in October with three items. Now, less than a year after new items hit the menu, the brand’s investments seem to have paid off.
Noodles & Company’s sales momentum continued into April, the chain’s most difficult monthly comparison versus last year, in the weeks following the menu refresh. Comparable sales were up from mid-March through April by about 5%, Madsen said. Q1 2025 was the biggest comparable sales increase for the brand since Q1 2023, when comps were up by 6.4%.
“Both Q1 and April results represent a significant acceleration from Q4 last year when traffic was down minus 0.1% and same-store sales grew 0.5%,” Madsen said. “This sustained and significant improvement in our sales trends demonstrates to us that the execution of our previously announced strategic priorities have gained traction, especially while coming during a period when the industry has been impacted by lower consumer sentiment.”
Noodles & Company systemwide comp sales
The chain spent significant time and resources boosting operations to ensure the menu launch was successful. Preparations included a four-week training program for employees from the regional director level down to hourly team members.
Training modules focused on boosting employee menu knowledge, encouraging suggestive selling for frontline team members and step-by-step instructions for the culinary team to ensure dishes were prepared consistently.
Additionally, Noodles increased its marketing spend to boost brand awareness. That included redefining its brand strategy and creating new activations. The company’s new campaign, We Know Noodles, focuses on the brand’s 30 year history and menu refresh, Madsen said. The brand created two commercials, one that highlighted its new menu and another that zeroed in on its new mac and cheese dishes.
“Our new commercials scored in the top quartile of all competitive commercials tested and showed a high likelihood to drive both brand perception and traffic,” Madsen said.
The company increased its spending on social media, digital out of home, digital audio and PR and influencer campaigns, he said. Noodles leveraged its loyalty program to provide offers, personalized communication and promote a taste tour to help drive trial with current customers.
“Since the menu launch and through April, we have seen double digit increases in brand awareness, brand search traffic, and app sessions in our own platforms for both new users and existing customers,” Madsen said, adding that loyalty signups were also up.
Despite the boost in sales, Noodles & Company still faces financial pressures, with net loss increasing to $9.1 million during the quarter compared to a loss of $6.1 million in the year ago quarter, according to an earnings release. Operating margins also fell to a negative 5.2% compared to a negative 3.4% year-over-year.
