Earnings call transcript Q2 2023

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Operator

Good afternoon and welcome to today’s Noodles & Company's Second Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded.

I would now like to introduce Noodles & Company's Chief Financial Officer, Mike Hynes. Please go ahead.

Mike Hynes

Thank you and good afternoon, everyone. quarter call. second our to XXXX earnings Welcome

Here Chief start Executive this afternoon by Boenninghausen, our is Dave Officer. matters. over few with a me going regulatory I'd like to

projections, to release Form in statements the a those are cautionary our Private Reform risks regarding results financial During from year uncertainties, events Securities including of to report Any of XX-K forward-looking in Litigation materially referred be company. only and XXXX SEC. Act. fiscal this and actual items, differ the could may on or due meaning statements we make its company's within annual statement performance future or and subsequent the projections, the number remarks, and for the events future should those considered filings new statements such Such afternoon's the forward-looking of with the

measures in GAAP. in for be results call, company's operating the believe we in our During can These not will which we evaluating with a accordance substitute the measures, prepared or as non-GAAP should be useful financial discuss performance. isolation considered

investor. The without a efforts. EPS significant such margin. on A in an reconciling Quantitative reconciliation and provides XXXX does second is does unreasonable not only measures forward-looking these of GAAP not release. of directly the earnings our contribution is EBITDA, that and to the measures, information on To extent quarter non-GAAP guidance, specifically measures forecasted unavailable adjusted is be basis, adjusted and non-GAAP information the for basis and comparable company most GAAP these measures to it a available so forward-looking to measures provide likely accessible corresponding are reconciliations

our to to would I Executive Officer. turn like Now, Dave over Boenninghausen, it Chief

Dave Boenninghausen

$X.X X.X% afternoon, good to to prior year EBITDA decreased million versus everyone. quarter, and revenue decreased Mike, and In XX% adjusted million. & $XXX.X second Company's Noodles the Thanks,

income QX, as call, beginning well discussed we QX, particularly softness in the of consumer. portion lower of in we as see As during began our trends, last the our to the guest last earnings surrounding

larger We overall and an than the peak our year-over-year increase and significant during late degradation a itself includes in in proposition, QX. believe price manifested quarter of to XX% and which first in in decline led overall, value historical QX, which therefore double-digit increases, in ultimately first a X% our sudden portion additional the traffic

an XX% negative by the most decline was of before quickly during a noted pricing, to our in to during XXXX, QX. call, messaging menu fell in With this Comparable decrease a beginning we pivoted our May. at steadily value starting restaurant which As traffic price impacted including April July. declines X.X% decline improved more of the of a to we in effective in recent the pivot, second from prominent X.X% X% of quarter, month lapping improving from sales, a X.X% system-wide July, during May, first also the

$X.XX pre-COVID. an are we Additionally, same in were increase seeing XX% the average over unit during which million July, volumes, period our a increase

macro as from such, trends. strengths suburban feel are our remain benefit we our to feel off-premise tailwinds. And We footprint and with we oriented longer-term and well-aligned long-term consumer

comparable restaurants However, was sales second we comparable this trends. near-term To perspective, a on pressure the they perspective, our in at company do have quarter put feel more from our put declined year-over-year X.X%. sales in

increase urban while outpaced collegiate of our Similarly, year-over-year portfolio, and sales XX% in sales in saw growth. they second percentage dine our our However, positioning, indication, Company improve focus as the the the of overall locations. & to not XX.X% results on basis, competitive represent restaurants our on opportunities of do a That small overall comparable suburban the the our a clearly said, quarter, which represent us challenges have our Noodles quarter we during believe potential and caused to second brand. represented react

on in above saw well second that the We reset we of quarter. five initiatives are revenue performance, focused following the our drive to the

with optimization a price appropriate balance First of accounting and promotions.

advancement analytics. to in our guest increase Second, engagement technology and platforms

of casual of complete evaluation a highly the our world, recognizable introduction menu into our Fourth, layout, to offerings, program. consumer fifth, a Parmesan. fast Third, catering significant favorite And a Chicken of culinary consulting third-party approach our a and the industry leading including utilizing assessment expansion firm. our

value area The been has optimizing around been first we pricing and actively addressing that strategy. our have

the stabilization entry to low of level helped of meal QX toward improvement & in shift to trends. Our and traffic and Mac a introduction price communicating deal, our point lead Cheese an

ahead, completing as strategy, and we our to enhance online to look both menu in-person. guests, how of our we the are presented third-party well as pricing research process in As overall is

second restaurant, including dine Our in Nearly sales data of have our drive improvements made and we go. to in experienced is that technology XX% guests of area to focus orders the our platforms. brand to and

company expect restaurants by the of We menu QX. of digital end XX% installed be to boards in

of menu for boards, will able system quickly restaurant incorporate pricing of the in findings research menu rollout digital the continued we our across our With majority our any extensive be current from to and guests.

additional of boards. seeing menu power the We digital are

that example, our have those with Mac boards. restaurants menu deal XX% we Cheese May, & introduced when meal that in digital menu an achieved sales physical greater boards As deal of than

a machine online we in our a of them now our have which recommendation effective driven enhancements systems. allow ability and will July, completed a to marketing made CDP, personalized with the and Including fashion. to implementation more product app Similarly, guests, ordering complete launching customer new and our by communicate learning. we to have engine our team of and thorough data more In platform, our the understanding

increase a XX% this period, the During recommended engine. we in items saw testing purchased

have whichs order flow of has our cheakout driven increase basis in recently page, the XXX point intensed conversion. we web Additionally, web our

our Finally, continues program rewards as we activation, strengthen. to think digital about

quarter members prior year-over-year Our rewards importantly, our second the versus growth during X.X amongst XX% members. to during And X% we quarter the frequency million membership grew year. saw in rewards

further of customer menu be and attributed sales with learnings a digital digital positively and over in of long-term. to build As XX% the sales Consequently, to data can and members. rewards technology strong very our I'm have XX% from a reminder, from. optimizing business and channels we our our come through work around And increased of menu impact the third-party to short layout, potential boards, the installation the excited both pricing at our platform, foundation

our great much of including wide the improve menu, ago. also assess culinary and & for have national our globally tastes capitalizing are meet popular aggressively We Noodles noodles, a bringing of have while identify innovation, continues to chain to couple opportunities looking strengths. was still our a forming at and order strategy, menu preferences. to our design differentiated menu on years made Company our and together to menu inspired dishes that that variety launched had of offer first a Tortelloni zucchini Historically, to we success to positioning,

the a menu staple cuisine. of launch activation be of Italian newest will Chicken Parmesan, Our

excited guest a very its point broad casual Chicken and Parmesan, speed. a opportunity price are We dining our favorite familiarity about given at and provide fast appeal, casual to

current Chicken to ensure every exceeds comprehensively in with evaluate satisfaction we culinary As assess Parmesan, consumer also are every to deliver the we to bite. engaging launched is expectations our dish and in process firm crafted third-party an and taste menu, consulting industry-leading exceptional that and of

work into course our the of be year strategy completed integrated this We XXXX. anticipate being by the over with end results the of to the

of market. variety the to business. has how in our which menu, our Company growing veto & Noodles unique travels strengths part for vote, the The inherent well our grow provides catering this food the catering substantially opportunity combined Finally, occasion eliminates with for the

and program on turnover catering restaurant than Our to is their teams for pre-COVID, at with now levels better focused for into our easy catering it's we sales. appropriate incorporate feel and building more our be staffing the teams to operations time

catering during the of believe of is XX% growth meaningfully the opportunity X.X% XXXX, company's larger. but represented sales The quarter, the second quarter we second from

of over promotion restaurants, We outside sales believe have of long-term. inside business can the develop as opportunity, mid-single-digits both and to a begun our our percentage we catering more that a be aggressive

our of incorporated our work menu for culinary into drive restaurants look our I will profitability, opportunities. XX% catering strategies, already and our the catering. optimize offerings catering of of our from further offer nearly a Notably, our to from. X% and to progress be of build guest An sales strong appropriate to as feel foundations result sharing menu we to Similar initiatives. And and have top forward growth sales engagement consultant program

but As overall our moderated our additionally initiatives, continued five we restaurant financial new position. driving been centered improve we have execute actions growth. sales key have First, areas: to actions around three These taken

streamlining of to the certain Second, reduce cost. G&A administrative functions

including the repurchases. third, share of return shareholder And value

our and continued investments and primary of and our we platform annual cash with delays align support growth corporate our as our are to through construction as permitting the growth, the achieve our years, of process and free X% XXXX, flow free is in rate inflation, well unit flow of positive In for targeted to activities revising forward in our unit of data effort customer restructuring coming the growth revised including development menu organization XXXX. objectives. the considering combination digital cash board completion going One to objectives a

XXXX, growth We continue capital of factors in allow platform achieve new to $XX investments, with million. to guidance are menu million flow this digital year. driving free positive prior $XX for customer us million data rate our long-term growth Combined of $XX of from down to the guidance be million pleased units, our of sustainable board our cash $XX and actions completion will revised achieve with but next these and our expenditures to believe the slower performance

long-term reviewed our our Additionally, quarter, as to earlier we objectives. an growth meet organization this needs

such invest review, restructuring digital continue G&A this These while of nearly will corporate technology million of implemented result our areas functions. to we allow administrative a initiatives, yield and our to streamlining annualized. in actions us As $X anticipate we experience a savings as that

million repurchase strategy common we Finally, up has purchase opportunity company our the program, today, to Directors of as a part to to our value. giving increase of $X share that announced stock, of authorized shareholder the long-term Board

disappointed belief success. the of results Noodles second brand And Mike, want I while our the turn current potential call there upside of is significant that core my the over to Before well-positioned quarter, I the of in the we for is are to results. reiterate

today build and sustainable deliver shareholder address our strengths strategies upon shortcomings, You current have value. our heard plans our and to

excited you are the update an We in come. on quarters provide progress to our to

to influence to Investor company to our our XX excited experience as a him Hynes look and nearly strategies, achieve with forward to finance, the accounting welcome full Financial we and team these I'm to years As our Mike significant I team. Chief brings of potential. with have team And the Officer. to working Mike Mike Relations execute and for

Mike Hynes

energized I'm here. I me ahead into the what to been achieve. short welcoming for Noodles be by our a excited you, us, like opportunity few business. It's Thank the with Dave. and team the about thank only team weeks. I'd the great to have company can of

Turning to X.X% a X.X% quarter. and comparable by compared company-owned offset results year, the a decreased $XXX.X decreased restaurant comparable franchise sales, System a for last revenue of decline quarter decrease in decrease including to of by Total partially the wide locations. second during from second restaurants. X.X% revenue sales new to X.X%, restaurants, driven million at at

including COVID included Our fiscal during at X.X%. period July system-wide sales quarter XX% Company X.X%, the second AUVs. locations. and XXXX million, X.X% declines traffic of restaurants, comparable recently $X.XX July company-owned above July comparable were unit pre volumes a declined at franchise Company average in completed of decline X.X% of

sequential decline especially of during fiscal As in a to with traffic declines X% improvements mentioned, of in and was Dave by June. our challenged XX%, X.X% followed April May, period,

second was quarter X.X%. the during Pricing

forward quarter third the throughout Although of May, as well price, the XX% down as strategic half pricing to decreased but carrying the the quarter. in taken anticipate came of meaningfully the XXXX, lapping this to of last quarter. carry price We pricing pricing X.X%. year-over-year We the entered from level of quarter, given during actions in

For third million anticipate sales decline we total mid-single-digits. between quarter, restaurant revenue and $XXX and this of to million comparable $XXX current

Turning to the P&L.

point XX For year. compared the to second quarter, basis last XX.X%, a was contribution decrease margin restaurant level

improvement last expense. months. point across other of restaurant result meaningful improvement was Our sold prior of continued well the offset the the from XXX of goods restaurant by as line, COGS was impact sales, cost favorability quarter last improvement areas to XX.X% in executed of included as in over year. markets deleverage initiatives our the second relative margin normalized year, XX basis in of a contribution This commodity

year-over-year for chicken, of by We during for low deflation food XX.X%. continue cost which the led overall to hourly period. expect to XXXX only single-digit Wage X.X% the for but July the fiscal recently year. Labor but of growth contracted sales, quarter continue compared moderating X.X% is inflation for completed full inflation were second to the full XX.X% quarter,

year, basis de balance X.X% Due than recent leverage G&A year. initiatives incentive and that points prior costs, $XX.X other second to we efforts. both reduced of line to and noncash in continue simplification year, labor moderate operating the to costs second of deleverage quarter included of from inflation XX.X% also rose primarily over prior sales, lines year for as for cash implement to compensation. respectively. the million, expect and we the to prior during with occupancy subsides, across the wage $XXX,XXX expect While approximately XX our $X.X million operations menu deleverage less the was stock-based compensation G&A due we quarter and

including loss million million or last to of income anticipate $XX of diluted GAAP was million, current for share, we a per quarter $XX loss $X.X the of Please net per refer impact the compared For to G&A expense a earnings net year release of full and earnings was the $X.XX $X.X $X.XX, $XX third Inclusive non-GAAP reconciliations million. restructuring compensation. and to Non-GAAP $XX Dave second to non-cash noted, million year. of for of of year. between between quarter, G&A diluted measures. of to anticipate expense restructuring we of last $X.X be earnings approximately the our stock-based loss of compared $X.XX million $XXX,XXX million

the like Turning an I'd to XXXX provide year, the update full to guidance. to

of has performance the the quarter, given company to the current revised our traction at the relative have we beginning although expectations mentioned second performance. certain Dave As gained

margin we anticipate XX% restaurant current full to $XXX year comparable margin and year. are full For guidance our XXX prior restaurant the versus for XXXX, between million sales. points with to XX of year inclusive providing reflecting $XXX of year low full of million XX.X% the contribution guidance revenue, single-digit We basis expansion negative

XX%. current third For restaurant margin anticipate the we quarter, north just of

in and expect the adjusted for reflecting million. $XX of for guidance, between EBITDA Included of over EBITDA $XX million full guidance versus upper year our $XX adjusted XX% $X EBITDA expected now quarter our million We third to million growth is of end expectations XXXX. with

are between negative expectations and Our for now adjusted EPS XXXX $X.XX $X.

anticipate adjusted $X.XX positive For the third we EPS negative between quarter, $X.XX. and

For regarding information press see outlook our the expectations, further XXXX our please release. business section of

approximately and credit $XX We debt total At sheet. $X.X cash end, million of of quarter liquidity and $XX.X had under million balance future million. the nearly available currently incremental facility. we to equivalents cash a Turning balance borrowings have of for amended our

and last company second six quarter, two restaurants the at the we call, X new discussed During the In company expect opened and quarter, closures. X we the to earnings new openings, no third company closed as restaurants.

the quarter, openings new For gross XX to the full year, fourth including growth we restaurant openings approximately franchise X now system-wide X in the representing expect X% for unit year.

primarily unit across As the to menu we growth our boards X% in support target, ongoing flow. one-time complete digital system, to operating through able be expect our investment we cash

Dave I final to call turn like to remarks. With back the over for that, would

Dave Boenninghausen

we that have in in the Mike. experiencing momentum we disruption Clearly, faced the quarter. been second Thanks,

improve menu, our of and flow. a operational evaluation are gained of Chicken guest productivity that challengs part of Meanwhile, achieve introduction positioning of free strategies we Parmesan, improved initiative we early financial our financial our to improve enhance and the saw our QX, goal positive assessment during Again, we in third-party perspective, initiatives a a aggressive price Although from leveraging sales engagement to our our supported cash optimization, performance. to these and are expansion traction catering we initial the competitive program. analytics, included of to performance, executing significant

streamlining new repurchase of restaurant growth, the We and authorization infrastructure, share G&A our a the enacted following: have with program. Continued moderated already

have foundation rewards that our a and from Fortunately, flexibility completion garner to upcoming rollout. the program a menu With will we brand, board culinary and of build strong from. differentiated robust digital we pricing digital and the

favorable. the environment Average cost growing, unit and are stabilized volumes remains and have

great and upcoming and in to progress I our positioning, have We both see in our sharing opportunities. We value our long-term quarters. in our confidence to short-term forward strategies look proposition overall competitive address both and

time please you Thank your Q&A. lines for open for the today, and

Operator

Bartlett [Operator from question Jake Instructions] Securities. first Truist with Our comes

Jake Bartlett

for with menu I this start want about Great. February. have Thank much this to of deceleration. just you really you pricing taking that sharp what's the so the know I question. caused Dave, talked diagnosis you in took the

As you can to you been a, have any there service explanation, dug satisfaction, delivery a sharp maybe us levels, help whether with such understand deep is trend you into customer has this, other here in traffic. know, the anything deceleration it's

Dave Boenninghausen

that we Certainly, has factor. been the Jake. feel Yes, pricing dominant

know in our that. aggressive pricing XX% pricing. were running raising feel alone We we than nearly ultimately, prices. are that, been with we not But peers. we of XX% obviously hight, more have many two-year year-over-year and We do pricing At

income We strong to back rewards to continuing That those remained people about menu to all diagnosis metrics are have you your strong to for operational foundation. But price we has we our of time the point a and one we thing times, is feel win members, the overall fresh While menu. look today guests. the needed guests, with higher more noted a feel with is some We take think we look at do metrics the at what we metrics very cook us it says sensitive improving, comfortable other to of is. improving. work that,

channel where than we at in the brand upside have in dine are seen much because potential a in take know an said, a to today. lot as internal research AUV culinary for confidence other the again, we us menu it's opportunities. strategy us fresh think Our the well we comprehensive dining. higher we optimization Chicken But as of that a From potential analysis of gives and perspective, strength is look this overall Parmesan of time appropriate

have a seen well. as We of program part the rebound actually delivery in

specifically of are by boards. -- opportunities Some as digital Those we learning think Again, digital that. the and as be some have area will menu well. go to benefited we

Jake Bartlett

just two on to know the of side. menu that, increase follow-up correctly, that menu? was pricing that, year, And but XX% in-store I understand year-over-year. make you want my the has it that Great. XX% I How of to commentary taken I pricing a on and been the XX% was delivery lot one year, the impression sure just that have on much the

that could helpful. So just isolate that'd if you the be menu, to in-store

Mike Hynes

across Yes. year-over-year, all XX% Actually, really the channels. was

the of a when as implement did and price look there do during we increase delivery was two the COVID, had amount the course So to you with year, at that significant price premium. it. of so, kind or behind To that put in the increase last But really across including been some price over all more channels last, has texture year restaurant. just

on reminder, additional the and delivery X% we QX of price 'XX. XXXX, February in here implemented a all across in X% side. were of an not of just channels, Those As

we that price for didn't as As increase price or lap effectively dropped And X% replace pivot, from we year, we our X introduced during it. the another menus our last so. X X% the

our is again, today, approximately X%. sit run as So we rate,

some have be a and traction, some perception. to So we perspective, improving time gained winning take that going good value we but focused guests on to it's back from value continue

Jake Bartlett

level I taken pretty right cost to question level solid 'XX? of side. on last we to make from measures you're sure my Just in understand kind the to is, that sure is of that then cutting a I the know, And you the it a to the to is your hear grow future make want is Great. G&A. into kind And as know grows some you to decrease kind right been efforts And just have find the try you of focus on how from at I back of store 'XX didn't operating in had And the A efficiency, kitchen mention. you're out. But, cost for you big of sort efficiencies. the well? G level, of to also then here going

Dave Boenninghausen

the start will G&A items. expense I So with

level we such digital gotten maintained completed kind years, aspects little of absolutely the we we our invest as of administrative G&A we have the new functions that pretty integrity to entire last of structure. right the have to grow we continue overview structure. solid few technology, heavy As rate, there a the course resources as were unit at ensure our new What of from. enhancements, that we Really said, growth, we areas the that in those would saw a G&A bit as so we to systems, of certain felt of that too over technologies, probably we is implemented wanted just

So modest, at it you as the we core should for today, good feel the just be comfortable into more as rate, G&A inflationary spot that we sits increases very a very type look where that future. go

we cost over From a the last perspective, progress several years. made have great labor

to of day We on continues a that basis. out did roughly XX% our That we restaurant have XX% reduced operations of from year, the menu hours per of with last work simplification per system, an perspective. some

some those the here incorporating into We initiatives are sit we of model as today. even just

enhancements We that. the to continued well in gain from Everything team as we at as are management at look there overall looking there, efficiencies will technology, is how equipment flow. just continue structured, can hard

we certainly, So made progress labor. on great have

so have We now that to are will buttress prior go not rate in by the continue seeing that wage we quarters. been forward. inflation we the fact we Also seeing as do

Operator

Long from Joshua comes Our next with Stephens Inc. question

Joshua Long

question. for my welcome Mike, taking Great. Thank you on board.

you that you the or the on more just of the Looking that comments of guess coming how see frequently? that traffic or that just maybe the up it's see know to guess. How be guest you do in forward, guest? if as next you in sensitive improve, digital terms target with able core start Dave, you can do and -- place just that back of specifically. your to able to you economically bit that go quarter, this in lost start a forward more as to sense following marketing make And be you might some then in you about messaging on that in to systems have systems what back chapter. you going you it curious to have lost of, talk some been think made working about during that you guess coming But terms

Dave Boenninghausen

Sure.

target the encouraging has able that guests. think those technology is when just with that that, look access, touch exciting you promotions. restaurant a the from for were were as investments and in One has diagnose members us, been to Josh, with to been of the perspective ability are maybe overall digital to think well or able data have specific message, to extremely are Rewards things I forward, the our going menu one of thing to -- based and overall an key think, flexibility customer give to platform and see to first specific I we messaging, flexibility, on not them as as issue, boards, wereable is rewards just as started people we our even we value a tied easily quickly promotions members. off we

increase X% earlier an of as actually the frequency we overall in the in we well saw remarks, about program. rewards We from in as saw talked as our members growth

that us against a able bit we able and them. to retain information, to partially because that been and have have act quite quickly maintain more So gives we been guest,

incorporated CDP. you Now

our teams. And significantly already to couple of just us with team to guests. being So we live has that just weeks allows communicate really with a segmentation, surgical just made how we ago. at a have how to messaging, tremendous more went CDP, approach approach to in strides our our targeted more overall This

that some of low-hanging it starting technology. fruit the reap just are to we comes So when to

are been recommendation Another successful. perspective, technology use we testing aspect that starting to learning from we of continue has engines. as The evolve to said, very terms as machine of we a in

that are implementing speak, should we as nice So that another tailwind. be we

infrastructure a become technology program programs drives overall continues rewards that to our the as best-in-class. well from perspective, and improve the So as digital

business, you the boards. for of just aspect every on us pricing structure, powerful is as so how layer us, menu why nearly flexibility it's reason it the that, menu new they of menu items, the is top Digital culinary gives laid one are so, it messaging. digital across whether Now out, boards

test assets. we menu always we wait or our digital it impacted didn't This pivot of even to comes flexibility, physical kind on of because the pricing up things to catch couldn't we because Traditionally, want quickly to to very boards the to when disjointed like experience. had some

we digital we perspective, combined feel of made menu with allows a data enhancements us. and boards really from have all So the technology

We we forward here, from revenue to just that's perspective. continue the extremely a with reset feel from we are to But frustrated as that strengthen. foundation going go have strong

Joshua Long

just a it my bullet question points? roll Why in amazing. maybe just Obviously, It would we I'm there, be I And high-level sounds I by that helpful. Very Correct boards. about on when it out year target think implications. we that XX% you faster? digital of don't just, me end minds. said menu for you is our never works think way. through think if wrong but can walk There

be make talk of think are what that, and pulls it pushes system you at you right. and got to there when that done we the rolling out across terms get sure XXX%? the through a could You Can in you

Mike Hynes

QX. Josh will expect we end at the to of by So XX% actually be

end the of all in by to of company restaurants by year. XX% this expect the end be So QX

As we it's not and screen implement point, just digital in to your simply it's menu go. the certainly there boards, plug you

within We further execute as a from restaurants of just technology one menu well. but are perspective, to digitally able will upgrading to the perfectly, enable all us our of and every network network execute enhancements single be not to any

a that up components all ensuring have the we then construction, of little there as the happens setting and a upgrade electrical So and network bit right cabling, is well.

but really throughout of pricing from like seeing As really really menu. at we being are leading the good messaging we results responded do average, indicator things that, started one perspective, to that's exciting implement optimization, price already even interplay where haven't they are of we some is check the well thing looking to, the

test as be until the quarters. some of as upcoming menu really well able We the aspects have in of that to layout just

the also have So possible. that systems execute right some network good that we But to perspective really the are from infrastructure, step benefit change quickly. assured of we much garner as the obviously expect and moving as and able it's really and right

Joshua Long

curious about, little the of supports early expect what favor to any delicious to bit Chicken Parme? and time? to, if makes maybe mean, think so the then And any the yet, innovation the the years, maybe That what one menu one When that done me. and And work a something terms that's of kind of sort overarching appreciate you a on sort stop, or of leg for of by just then find? of we I over research sounds in sense. why of might have of to that talk over of I lot strategy is done and to be you research next hand, idea past inventory in good understand is be take maybe right have about in year. complete offer expected And Can now that. What a the sense, last you the have the Obviously, able you to makes you works. new more But end mind. tested but one not culinary definitely innovation? up of terms you time

Dave Boenninghausen

one format perspective. of And not that any I we something start staple casual Chicken absolutely price is see the reason it are to will Parm. in a Italian really able mean, love I you first cuisine fast from with

So it front there. will the edge be really on

appeal, It are great extreme casual the little we familiarity. it environment. of right just bring breadth to down fast So fairway in excited the

the years, bit Chicken our as as natural the the Tortelloni a This culinary as was look as such of progression is balance couple at items is know, This Tortelloni our overall to typically of of with we something Parm, more That did, which perspective. have such seen that as overall just the our unique launched we Josh, has items familiar much from the that all research linguine. sequencing more potential the is we with that you which a kind years ago, says to, innovative at kind menu. successful. Over extremely you you of as try innovation natural

working that best ensure really now We it of really menu. are say, that some the we world in what years. from we our missing of shift coming guest to several we business are potential missing changed meaningfully all are catering know have potentially towards to want a We back. open the and that. last could has to are And we with off-premise, not The terms in more is big in legs. opportunities the out one perspective understand evaluate The

step that upside. trends, is that the but really traffic us back are fact identify there more this are guest where So have there know we at. we in and overall for gained now a comfortable of still where we behavior a our to traction, with some We tremendous not opportunities. normal is have time good We think lot is

Operator

[Operator Instructions] Barish from Our next Andrew with question Jefferies. comes

Andrew Barish

welcome, Hi, guys. And, Mike.

that out? mean, the on focused kind that increase sales seeing channel, of to trying how continued, the diamond weakness, not of exactly much where just I starts you I'm by delivery or kind the flatten the challenges. contextualize off-prem the that most of to has kind with Just imagine given have quarter last but numbers sure I that

Dave Boenninghausen

specifically highly as did areas that, and a actually of delivery, promotion the on in interestingly at the in put side. marketing attention both we bit and We've Andy, perspective value on overall is our a pivots, from we really looked that some one focus messaging, enough,

have a delivery nice in business. rebound the seen We actually

a that. sensitive, are for channels, recognize they from they be where to is of little we occasion least the where off-premise are alternative, when about which are somebody, bit we So at maybe Where that are more think home good bringing ascribe they experience, they would they kind than seeing a something occasion significant be that the be but people actually part less price areas would a premium is a going weakness seeing or a perspective strengthening. maybe of delivery could bit a are the the looking are where eat, Those out you that offerings. value paying of our are to expensive little

just digital our more a we are seeing the in So positioning, go strengthening. again we as including improving It's as well that overall competitive focusing bit, well on where value one softness. culinary focused come bit has delivery kind quick proposition reason are up the really, because a area pick back dine-in of on aspect, looking that at again as to as

Andrew Barish

on delivery, quick And follow-up third-party are you premiums actually promotional menu activity? Did just or just a your down take there. you with responding

Dave Boenninghausen

well as promotional marketing activities. as more was That

on you are how featured include also as could marketing a example. website So an

reduced pricing side. delivery not did we the So third-party the on

Andrew Barish

on or you your kind consumer been take variety the in looking on going the the the you. sort then, working you And been Okay. assessment in telling potentially of of I to culinary, consumer mean, kind culinary at more what on menu and of wherever research? have feedback kind the of this streamlining actually kind of to is pivot is What's focusing

Dave Boenninghausen

are the we opportunities of internally as well done that seeing of Chicken we research as existing optimization we some have Parm talked already Andy, Certainly, our dishes. about the with that

ensuring really at to looking they are that able travel. So

food are those in at areas optimized recipes additional potentially sauce that generally increase items. or we looking great. travels But the we of certain Our could there feel with

what our that we are internal that's research showing already So against. activating

now areas culinary right there where holds, Are entirety, overall really ensure potentially expectation. there with we're or we areas need dish? where every of third really be to of areas should guest which in the don't are a the evaluate to right that maybe double are size consultant delivered menu terms the as we very In dish that surpasses working are its where Those should necessarily that single open down we party menu. towards is be our to going

honestly pre-open. are we So

it. else at But internal our able for to to fresh research. take ideas good to some somebody want have have We a I be look

Andrew Barish

I considering? then, price or you but are sorry a do a if I'm Parm missed range have point point when Chicken And that launch it, price and you does

Dave Boenninghausen

price It'll perspective, a are at early be is moment. $XX.XX. be in hoping we From to fall targeting the around what

attractive dish. is think should point a a for be we very, what popular what very So very price

Operator

question next Joshua Our is Inc. a follow-up with from Stephens Long

Joshua Long

taking for Thanks Great. my follow-up.

one it's joined. Just to relatively to Mike. been And recent that over I realized you wanted throw

perspective from And as give but you there? Curious early more if into the rest know the how give observations a hear moderating the seen have you and days, We kind to about we secondarily you what sort could were you place? of the peek things then learned the are that's you. locked on in bit bit could on just side. are excited of to us of a if little you COGS have Any have on a I of the side said inflation food on team, started positioned year, curious of, structure chicken basket, in for little and from peers? the

Dave Boenninghausen

join Off as and know, excited been It's team. to weeks, couple Sure. Josh. a start you with to really just good Thanks, a the team. of the

and today. with the the As an far people have that impressed here, towards as driving energized restaurants impressive are Dave the it's support I about focused leading office initiatives been supporting everybody is, that and how talked group of and

So getting initiatives off more to entrenched, forward Dave talked looking with start about. a getting and to great and the involved

COGS as goes, are far right. As you

We are the locked and the chicken primary items. of -- a in our with lot of for rest year, basket commodity chicken

same story everybody's that's we to we the around beef the is, seeing area One for and year pricing a roller about about are it's which me our start as looking at to very seeing to beef, next familiar familiar thing suppliers coaster. are talk we

things go pretty now, to the outside are that way it's are that. to in our we we early and to right to And of seeing ahead about But and try of some market wrong talk the suppliers that, talking doing so get 'XX.

of the For the year. rest

balance COGS of sales very the consistent the We as percentage of year. anticipating a are for

Operator

this today's participating. for further questions I'm showing Thank This conference at call. concludes time. you no

may disconnect. You now

Noodles & Company (NDLS) 9 Aug 232023 Q2 Earnings call transcript