New Noodles & Co. CEO pledges menu overhaul
Drew Madsen, Noodles & Co’s new CEO, recently told investors that the Broomfield-based fast-casual restaurant chain will overhaul its menu in the coming months in an effort to reverse its recent disappointing financial performance.
The company is in the process of a “multiphase menu transformation, guided by our new ‘contemporary comfort kitchen’ culinary identity,” he said late last week during an earnings call with analysts and investors. “While Noodles has consistently introduced new limited time offering menus in recent years, it has been a long time since we updated our core menu. As a result, our menu looks dated compared to newer fast casual competitors.”
Noodles has hired The Culinary Edge to help shape its ‘contemporary comfort kitchen’ identity.
“Comfort means food that is creamy, cheesy, craveable and satisfying, but increasingly, it also means food that’s wholesome, homemade, nostalgic and nourishing,” Madsen said. “Going forward, our menu will embrace both definitions of comfort and also feature ingredient-forward menu descriptors that conjure craveability.”
The company needs “to do more than offer Italian dishes living beside Asian dishes,” he said. The overhaul “involves new concepts, recipes, prices and a new layout across our menu.”
Noodles plans to “start an in-market test of the first phase of changes early this summer with a phased rollout anticipated to begin later in 2024 and into early 2025, Madsen said.
There remain, he said, certain strengths inherent to Noodles’ offerings.
“Pasta and noodles as a menu segment is affordable, broadly appealing and very durable. And the emotional need our customers have for comfort and comfort food is timeless,” he said. “… Today’s increasingly diverse customer also wants more interesting flavor profiles, more spicy, smokey and tangy flavors from regions all over the world. Our menu is full of globally inspired noodle bowls and dishes.”
Additionally, noodles tend to travel well, making Noodles’ offerings appealing for carry-out and delivery customers.
“Despite these competitive advantages, our business has not performed well recently,’ Madsen said.
In the fourth quarter of 2023, total revenue decreased 8.9% to $124.3 million from $136.5 million in the same period of 2022.
Noodles posted a net loss of $6.1 million in the fourth quarter of last year. In the same period in 2022, the company recorded $1 million in net earnings.
For the full 2023 fiscal year, revenue decreased 1.2% year-over-year to $503.4 million.
Noodle’s net loss grew from $3.3 million in 2022 to $9.9 million last year.
Looking ahead, Noodles expects 2024 sales of $510 million to $525 million.
Madsen, previously Panera Bread’s president, was hired as Noodles’ interim CEO in November 2023 after the ouster of Dave Boennighausen.
“As interim CEO, Drew quickly assessed our most important opportunities and has aligned the organization around five strategic priorities that are focused on driving traffic growth. As permanent CEO, he provides the business continuity necessary to execute on these priorities through 2024 and beyond,” Noodle board chairman Jeff Jones said in a prepared statement. “Drew is already driving a culture of rigor, accountability, and operational excellence. Because of this leadership style, coupled with his extensive restaurant industry experience and operational expertise, the Board is confident in Drew’s ability to drive sustainable growth and create long-term shareholder value.”
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