BROOMFIELD, COLO. — For Noodles & Co., limited-time offers mean more than new menu news. The seasonal additions showcase the chain’s strategy of using freshly prepared produce.
“Our limited-time offers have been a staple of our menu strategy over the past several years, reinforcing to our guests our commitment to fresh ingredients, such as asparagus, as well as our promise of preparing ingredients throughout the day,” said Kevin Reddy, chairman and chief executive officer, during an April 29 call with financial analysts to discuss first-quarter earnings. “As an example, in the backyard barbecue salad, our teams receive fresh ears of corn and actually shuck and sheath the corn in our restaurants. Our philosophy of showcasing real ingredients and real cooking continues to generate positive traffic at increased frequency year in and year out.”
Launched in April, the chain’s spring menu features asparagus di parma, which has fresh asparagus, white wine butter sauce, mushrooms and tomato tossed with spaghetti and topped with Parmesan chicken; a Margherita flatbread, with whole-leaf basil, Roma tomato and a blend of feta and Parmesan cheese; and the backyard barbecue chicken salad, which contains pulled chicken breast tossed in barbecue sauce, fresh-cut corn, Roma tomato and red cabbage over mixed greens with coleslaw dressing.
The recipe for L.T.O. success at Noodles & Co. is simple innovation, with small modifications made to a previous or existing menu item.
“The way we do our limited time offers is, it’s really not a lot of added items or s.k.u.s to that particular dish,” said Keith Kinsey, president and chief operating officer. “If I think about the asparagus dish, it’s basically adding just the asparagus into our s.k.u.s and we’ve done that dish before, we’ve done a little bit of a modification to it, but operationally, it fits right into the same mold of how we execute that dish. So other than adding an asparagus to it, all the other elements going through, saute, adding the sauce and then getting it out to the guest, actually is very similar, so it’s an easier train. It works very well from the standpoint of the freshness and reinforces our focus on getting fresh ingredients into the restaurant. And operationally, we can train it pretty effectively and the team can embrace it pretty easily.”
Another strategic initiative for Noodles & Co. is catering, which the chain has tested and refined over the past few months in select markets.
“The initial response is very encouraging, not only from our guests, but also our operations teams,” Mr. Reddy said. “We believe there is a clear consumer demand for this occasion and our offering will be compelling in the marketplace. Due to the positive reaction of our operations teams and consumers, we now will be rolling out catering fairly quickly and expect it to be offered in 100% of our company restaurants no later than August of this year.”
The company expects a modest benefit to sales initially with steady, continued growth over time. In the test locations, catering has contributed 1% to 4% of sales.
Severe weather weighed on traffic during the quarter, resulting in a 1.6% decline in system-wide comparable restaurant sales.
Net income for the first quarter ended April 1 climbed to $1,424,000, equal to 5c per share on the common stock, compared with $924,000, or 4c per share, in the prior-year period.
Revenues totaled $89,519,000, up from $81,280,000.Looking ahead, the company expects to achieve 2.5% to 3% growth in comparable restaurant sales with 42 to 50 new company-owned restaurant openings and 10 to 15 new franchise restaurant openings.