Noodles & Co. stock falls 20% after restaurant chain swings to surprise quarterly loss

Shares of Noodles & Co. fell more than 20% in the extended session Wednesday after the restaurant chain reported a surprise quarterly loss and revenues that missed expectations, saying it faced staffing shortages and other challenges related to a COVID-19 surge late last year. Noodles & Co. said it lost $4.7 million, or 10 cents a share, in the fourth quarter, compared with a loss of $3.8 million, or 9 cents a share, in the year-ago quarter. Adjusted for one-time items, the company lost 5 cents a share. Revenue rose 7.1% to $114.8 million, the company said. FactSet consensus called for earnings of 8 cents a share on sales of $121 million. “While underlying business fundamentals remained strong, fourth-quarter results were impacted by staffing challenges” as well as a surge in COVID-19 cases in the areas where most of its operations are, the upper Midwest and the Rocky Mountain region, in November and into early December, Noodles & Co. said. The company estimated that the temporary closures and fewer operating hours impacted its revenue by about $8 million. “We do expect near-term pressures in the first quarter due to the omicron variant, as well as during the first half of the year due to commodity inflation, but we are confident we will successfully navigate this environment,” the company said. Shares of Noodles & Co. ended the regular trading day down 5.4%.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.