Noodles & Co. Q2 Profit Down 97%, But Results Beat View

(RTTNews) - Fast-casual restaurant chain Noodles & Co. (NDLS) on Thursday reported a 97 percent plunge in profit for the second quarter from last year, as higher revenues were more than offset by IPO-related expenses.

However, both revenue and adjusted earnings per share for the quarter beat analysts' expectations. Looking ahead, the company forecast earnings for fiscal 2013 mostly above analysts' estimates. However, the company's shares declined more than 5 percent in extended trades.

The company's second-quarter net income was $68 thousand or breakeven per share, down from $2.18 million or $0.09 per share in the prior-year period. The latest quarter's results include $5.67 million of IPO-related expenses.

Adjusted earnings for the quarter were $3.97 million or $0.13 per share, compared to $2.92 million or $0.10 per share in the same period last year. On average, seven analysts polled by Thomson Reuters expected the company to earn $0.12 per share for the quarter. Analysts' estimates typically exclude special items.

The adjusted profit for the latest quarter reflects increased revenue and expansion of restaurant contribution. Restaurant contribution margin increased to 21.3 percent from 20.9 percent in the prior-year period.

Revenue for the quarter grew 18 percent to $89.24 million from $75.49 million in the prior-year period. Analysts had a consensus revenue estimate of $88.05 million.

The increase in revenues was the result of 58 net restaurants opened system-wide since the beginning of the year-ago quarter, comparable restaurant sales growth and the calendar shift of the Easter holiday, on which the company was closed, from the second quarter of 2012 to the first quarter of 2013.

Comparable restaurant sales, representing year-over-year sales comparisons for restaurants open for at least 18 full periods, increased 4.7 percent for company-owned restaurants, 2.3 percent for franchise restaurants and 4.4 percent system-wide.

The company-owned comparable restaurant sales increase was comprised of a traffic increase of 2.4 percent and an increase in per person spend of 2.3 percent.

Total costs and expenses for the quarter were $88.30 million, up from $70.30 million in the year-ago period.

During the quarter, the company opened 13 new restaurants system-wide, including 11 company-owned and two franchised restaurants.

Looking ahead to fiscal 2013, Noodles & Co. forecast adjusted earnings in a range of $0.39 to $0.41 per share. This compares to adjusted earnings per share of $0.31 in the previous year. Analysts currently expect the company to report full-year earnings of $0.39 per share.

The company projects comparable restaurant sales growth for the year of about 3.0 percent and expects to open 40 to 42 new company-owned restaurants in the year, net of one closure in the first quarter of 2013. The company also expects to open 6 to 8 new franchise restaurants in the year.

NDLS closed Thursday's regular trading session at $47.27, up $1.13 or 2.45 percent on a volume of 1.06 million shares. However, in after-hours, the stock declined $2.77 or 5.86 percent to $44.50.