Noodles & Company, the Broomfield, Colorado-based fast-casual chain known for its pasta dishes, is accelerating a sweeping restructuring effort amid persistent financial headwinds. In its latest quarterly earnings report, the company announced plans to shutter between 28 and 32 company-owned restaurants by the end of 2025, with an additional 12 to 17 closures slated for 2026, bringing the total to as many as 49 locations. This move comes as part of a broader turnaround strategy under new leadership, following the abrupt departure of CEO Drew Madsen, who stepped down after less than two years at the helm.

The closures target underperforming outlets, primarily those with average unit volumes below $1.1 million annually, according to details shared in the company’s second-quarter financial filing. Noodles & Company, which operates nearly 500 locations across 27 states, has been grappling with declining same-store sales and rising operational costs, exacerbated by inflation and shifting consumer preferences toward value-driven dining options. The chain reported a net loss of $4.2 million in the recent quarter, despite a slight uptick in revenue to $127.4 million.

As Noodles & Company navigates this aggressive pruning of its portfolio, industry analysts point to a pattern seen across the fast-casual sector, where chains are shedding unprofitable assets to streamline operations and focus on high-potential markets. This strategy echoes moves by peers like Chipotle and Sweetgreen, though Noodles faces unique challenges in differentiating its noodle-centric menu in a crowded field of customizable bowl concepts.

Insiders familiar with the company’s operations note that the decision to ramp up closures—initially projected at up to 21 for 2025—stems from a rigorous review of lease agreements and traffic data. The Denver Post reported that the Broomfield headquarters is prioritizing locations with stronger digital sales and delivery partnerships, aiming to boost overall profitability. The chain has already closed about 20 restaurants in 2024, a precursor to this larger wave, as it seeks to reduce overhead and reinvest in menu innovation, including recent additions like stuffed pasta and plant-based options.

Financially, the picture is mixed. While systemwide sales grew modestly by 2.3% year-over-year, company-owned comparable sales dipped 1.2%, signaling weakness in core markets. According to a recent analysis in QSR Magazine, the closures are expected to generate short-term charges but ultimately improve EBITDA margins by focusing resources on top-performing stores. The company’s stock, trading under $NDLS, has plummeted more than 70% over the past year, reflecting investor skepticism about the turnaround’s pace.

Leadership transitions are adding another layer of complexity to Noodles & Company’s revival efforts, with interim CEO Andy Tauch stepping in amid calls for a more aggressive digital transformation. Posts on X from industry watchers, including accounts tracking restaurant layoffs, highlight growing concerns over job losses tied to these closures, estimating hundreds of positions affected nationwide.

Madsen’s exit, announced alongside the earnings, leaves Tauch to execute a three-step plan: optimizing the real estate footprint, enhancing guest experiences through technology like AI-driven ordering, and expanding franchising to offset company-owned risks. This mirrors broader industry shifts, as evidenced by recent bankruptcies at chains like Red Lobster, where private equity ownership—Noodles is backed by Catterton Partners—has drawn scrutiny for prioritizing short-term gains over sustainable growth.

Comparatively, Noodles’ challenges are not isolated. A Newsweek report detailed how competitors like Panera Bread have also trimmed locations while investing in loyalty programs, a tactic Noodles is adopting with its revamped rewards app. Yet, the chain’s heavy reliance on mall and suburban sites has proven vulnerable to e-commerce trends reducing foot traffic.

Looking ahead, the success of Noodles & Company’s restructuring will hinge on its ability to adapt to evolving consumer behaviors, such as the demand for healthier, customizable meals amid economic uncertainty. With closures concentrated in underperforming regions, the company aims to emerge leaner, targeting a return to positive same-store sales by mid-2026.

Experts caution that without bold menu overhauls or strategic acquisitions, Noodles risks further erosion. As one X post from a retail analyst noted, the chain’s journey from a $50 peak stock price to hovering around $1 underscores the brutal realities facing mid-tier restaurant operators. Still, with a loyal base for favorites like Wisconsin Mac & Cheese, there’s potential for recovery if execution matches ambition.

In total, these moves position Noodles & Company for a potential rebound, but the path forward demands precision in a sector where margins are razor-thin and competition fierce.