Noodles & Company reported strong third-quarter results for fiscal 2026, with system-wide comparable restaurant sales rising 9.5%, driven by 10.7% growth at company-owned restaurants and 4.9% growth at franchise locations. Company-owned traffic grew 7.8%, marking the eighth consecutive quarter of positive same-store sales growth.
Total revenue fell 1% to $120.9 million as comparable sales gains were offset by the closure of underperforming company-owned restaurants. Even so, average unit volume increased 15.2% to $1.54 million, and adjusted EBITDA grew 34% to $8.7 million, which management attributed to higher restaurant volumes and the elimination of underperforming stores. The company's net loss narrowed to $2.1 million, or $0.36 per diluted share, from a net loss of $9.2 million a year earlier.S2
Margins improved across the restaurant base. Restaurant contribution margin expanded 350 basis points to 16.7%, cost of sales fell 90 basis points to 24.8% of sales on menu pricing and favorable mix, and labor costs dropped 190 basis points to 29.5% of sales. Average check rose 2.6%, including 1.9% from effective pricing, while cost inflation reached 1.4% for cost of sales and 1.7% for hourly wages.S2
Management said comparable sales momentum carried into October, with system-wide comparable sales up 5.5% against an 8% gain in the same period of 2025. The company estimated that its portfolio optimization program provided a 300 basis point benefit to company-owned comparable sales through the transfer of traffic to nearby locations.S2
The balance sheet also improved, with total debt at $101 million, down $9.2 million since the end of 2025. Liquidity stood at $1.5 million in cash and $21.2 million in revolving credit capacity. Full-year guidance was tightened to revenue of $485 million to $495 million and adjusted EBITDA of $35 million to $37 million, with capital expenditures of $8.5 million to $9.5 million and 34 to 36 company-owned restaurant closures planned. Twelve company-owned locations closed in the third quarter.S2
