Noodles &Co Reports 5.6% Increase in 2022 Sales - Digital & In-Person Channels Drive The Growth Amidst Inflation.
Mar 9th 2023, 11:10 am
Performance Analysis: In fiscal 2022, Noodles & Company reported a 5.6% increase in its system-wide comparable restaurant sales. This increase was driven by a 6.0% increase in sales from company-owned restaurants and a 3.4% increase in sales from franchise restaurants. The increase in sales was mainly due to strength in both digital and in-person channels and price increases in its core menu. The company has implemented higher price increases in 2022 relative to historical years as a result of inflation in its cost of food, wages and general restaurant expenses. In addition, the company has applied a pricing premium for third-party delivery. Given the inflationary pressures on its cost of operations, the company may continue to increase menu prices in the future. However, the company is still facing risks and uncertainties such as the impact of the COVID-19 pandemic. Though the pandemic affected the company’s historical operations and financial results, the adverse effects have significantly diminished throughout 2022. In addition, the company remains in regular contact with its major suppliers, and to date, has not experienced significant disruptions in its supply chain. However, if the COVID-19 pandemic were to become more widespread or another pandemic were to occur, the company's business could be similarly impacted in the future. Forward-Looking Analysis: Moving forward, Noodles & Company plans to incorporate an increased unit development into its strategic growth plan for 2023 and beyond. It plans to develop a pipeline to support an annual unit system-wide growth rate of approximately 7% with long-term unit growth thereafter. The company is also aiming to introduce more technological advancements such as introducing new online ordering platforms and improving mobile app functionalities to enhance its digital ordering capabilities. Additionally, the company will continue to face challenges, such as rising labor costs and volatile commodity and energy markets, but they will work with suppliers to manage costs and reduce inefficiencies. The company anticipates that they will see improved commodity markets, particularly in regards to the price of chicken, and the benefits of which they expect to realize in 2023 through fixed pricing contracts. It is vital for the company to stay innovative and listen to its customers' needs to stay competitive within the fast-casual restaurant industry. In summary, the company's growth plan seems promising, but investors should keep an eye on potential disruptors, such as the impact of the pandemic on consumer behavior and potential inflationary pressures.