Expenses tied to Noodles & Co.’s initial public offering weighed on the fast-casual dining chain’s second-quarter profit, though the company’s first results since debuting on the market exceeded Wall Street’s expectations.
Noodles eked out a small profit, which slumped 97 percent from a year ago, as IPO-related expenses weighed on the bottom line. Those costs masked a sharp jump in sales, bolstered by a 4.4 percent jump in system-wide comparable-restaurant sales and new store openings.
Still, shares for the Broomfield-based company slid 4.4 percent to $45.17 in after-hours trading. The stock is still far above the $18 IPO price, and even above the first-day close at $36.75.
Looking ahead, Noodles sees full-year adjusted earnings of 39 cents to 41 cents a share, up from 31 cents last year. Analysts polled by Thomson Reuters expected 39 cents.
Investors are excited about Noodles because it fits into the “fast casual” niche popularized by chains like Denver-based Chipotle Mexican Grill Inc. chains are a step up from traditional fast food, but don’t require the time or money that waiter-service restaurants demand.
Overall, Noodles reported a profit of $68,000, or less than a penny a share, down from $2.2 million, or nine cents a share, a year earlier. Excluding IPO-related expenses and other impacts, adjusted profit grew to 13 cents a share from 10 cents. Total revenue jumped 18 percent to $89.2 million.
Analysts expected a per-share profit of 12 cents on $88 million in revenue.
Noodles, founded in 1995, serves a pasta-based menu ranging from pad Thai to macaroni and cheese, and spaghetti and meatballs. The company has opened 58 restaurants since the beginning of the second quarter a year ago.
Company-owned comparable restaurant sales grew 4.7 percent in the second quarter, boosted by higher traffic and increased spending per customer.
