Noodles & Co Shares Fall More Than 25 Percent On Earnings Miss, Analyst Downgrades

Noodles & Co

on Thursday reported its fourth quarter results. The company earned $0.13 in the quarter, a penny short of what analysts expected. Revenue of $108.5 million also fell short of the $110.07 million analysts expected. Looking forward to 2015, the company projected an earnings per share growth of around 20 percent, well short of the 34 percent growth analysts projected. In a report published Thursday evening, Wedbush analyst Nick Setyan commented that the company's reported earnings per share was below expectations due to "continued lackluster" same-store sales growth of 1.3 percent. Setyan noted that the company's 2015 earnings per share guidance was cut to 20 percent from a prior guidance of 20 to 25 percent but continues to be predicted on a 2.5-40 percent same-store sales growth, 19 to 19.5 percent unit-level margins and 12-14 percent unit growth. The analyst added that the comp guidance relies on a 1-1.5 percent lift from catering, a 2 percent contribution from pricing and a "meaningful acceleration" in second half 2015 trends, despite tougher comparisons. "We remain cautious such sales levels can be achieved and sustained, as any meaningful acceleration has heretofore remained elusive," Setyan argued. The analyst lowered his 2015 earnings per share estimate to $0.46 from a previous $0.49, reflecting the company's commentary. At the same time a 2016 earnings per share estimate of $0.55 was introduced. Shares were maintained at Neutral with a price target lowered to $22 from a previous $25.