(Adds forecast, background; updates shares)
Aug 13 Shares of Noodles & Co plunged
as much as 21 percent in extended trading after the fast-casual
restaurant chain slashed its full-year sales forecast as fewer
diners visit its outlets.
The company also reported lower-than-expected second-quarter
earnings due to a decline in same-restaurant sales, particularly
in the Washington DC area where about 20 percent of its
restaurants are located.
Noodles, which went public last year in a highly anticipated
offering, has failed to live up to investors' expectations after
its strong debut in June 2013 prompted comparisons with leading
chains such as Panera Bread Co and Chipotle Mexican
Noodles' shares have halved since touching a life-high in
July 2013 as the company struggles to attract diners, who are
cutting back on discretionary spending and preferring packaged
ready-to-eat meals and healthier food over eating out at
Shares of sandwich chain Potbelly Corp, the other
fast-casual chain that went public last year, have also fallen
steeply and are trading below their IPO price.
Noodles said on Wednesday it expected adjusted profit and
comparable restaurant sales in 2014 to remain flat.
It had previously forecast full-year comparable restaurant
sales to grow 2.5-3.0 percent and adjusted earnings-per-share to
grow by 25 percent.
The company had posted adjusted earnings of 40 cents per
share in 2013. Analysts on average were expecting Noodles to
earn 50 cents per share in 2014, according to Thomson Reuters
Excluding items, the company earned 12 cents per share in
the second quarter ended July 1, below the average analyst
estimate of 15 cents.
Revenue rose 11.5 percent to $99.5 million but missed
analysts' average estimate of $102.9 million.
Same-store sales fell 0.7 percent, while restaurants margins
fell to 20.4 percent from 22.4 percent.
Noodles' shares were down 20 percent at $20.05 after the
(Reporting by Ramkumar Iyer in Bangalore; Editing by Maju
Samuel and Saumyadeb Chakrabarty)