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Good afternoon, welcome to today's Noodles & Company's first quarter 2026 earnings conference call. I would now like to introduce Noodles & Company's Chief Financial Officer, Mike Hynes. Please go ahead, sir.

Thank you, and good afternoon, everyone. Welcome to our first quarter 2026 earnings call. Here with me this afternoon is Joe Christina, our Chief Executive Officer. I'd like to start by going over a few regulatory matters. During the call, we may make forward-looking statements regarding future events or the future financial performance of the company. Any such items should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements are only projections, and actual events or results could differ from those projections due to a number of risks and uncertainties, including those referred to in this afternoon's news release and the cautionary statement in the company's annual report on Form 10-K and subsequent filings with the SEC. During the call, we will discuss non-GAAP measures, which we believe can be useful in evaluating the company's operating performance.

These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our first quarter 2026 earnings release. To the extent the company provides guidance, it does so only on a non-GAAP basis and does not provide reconciliations of forward-looking non-GAAP measures. Quantitative reconciling information for these measures is unavailable without unreasonable efforts. With that, I would like to turn the call over to Joe Christina, our Chief Executive Officer.

Thanks, Mike. Good afternoon. As we look at our performance in the first quarter and into the second, the story is clear. We are delivering consistent and sustainable favorable results across Noodles & Company, demonstrated by system-wide comp sales growth of over 9% and adjusted EBITDA more than tripling year-over-year in the first quarter. More importantly, this momentum continued into the second quarter with April system-wide comp sales growth of over 9%, including over 10% for our company-operated restaurants. To date, we have delivered positive same-store sales for the last 16 consecutive months. In conjunction with the increase in comparable sales, our restaurant contribution margins increased by a significant 460 basis points in the first quarter, with the combination of the strong sales and margin increases reflected in the over tripling of our adjusted EBITDA results.

What gives me confidence in the sustainability of our results is that our progress is driven not by a single initiative or unlock. It is a result of a focused, disciplined approach to executing the fundamentals of our business and doing the small things right every day, with those small improvements adding up to meaningful wins. Moreover, we are seeing those winning behaviors spread across the organization, leading to stronger execution and a better overall guest experience. What's important to understand is that this progress is not accidental. It is the result of how our teams show up and operate every day. We are seeing that come through clearly in 3 areas. First, we are running more consistent restaurant operations. Second, our marketing is more disciplined and more connected. Third, our culinary strategy is driving demand through relevant, craveable food. Let me start with our restaurants.

Put simply, we are operating better restaurants today than we were a year ago. Across the system, we are executing at a higher level in the moments that matter most to our guests. We are seeing meaningful improvement in service, particularly during our dinner daypart, where consistency and hospitality have the greatest impact. Our overall guest satisfaction scores increased by 10% in the last 6 months, with significant improvements achieved in all of our major sales channels: in-restaurant, native digital, and third-party delivery. That comes from more focused, more aligned teams who understand what matters most and hold themselves accountable to it. We are recognizing strong performance and reinforcing it, which raises the standards across the system. Guests are noticing the difference, and that is showing up in stronger in-restaurant sales and more consistent traffic patterns.

At the same time, as execution in our restaurants has improved, our marketing has become more disciplined, more connected, and more effective. We're not relying on a single campaign or promotion. We are operating with a consistent, ongoing dialogue with our guests, anchored in what we do best, delivering craveable, globally inspired noodle dishes. That work is showing up in the business. We're seeing it in both sales and transactions, supported by stronger engagement across our paid, owned, and earned channels. Importantly, a meaningful portion of that growth is coming from new guests entering the brand. In fact, new guest active purchases increased 36% year-over-year, and loyalty sign-ups grew 33% in the quarter. Clear indicators that our brand is reaching new audiences. We also become intentional in how we invest.

In paid media, we are actively managing performance in real time across channels, allowing us to allocate dollars more efficiently and maximize return. We are not separating traffic from brand. The same work that brings guests into our restaurants is also strengthening how they think about Noodles. In the first quarter, we introduced what we call a Boost Week offer, a focused time-bound activation designed to drive immediate profitable traffic during key periods. During this winter, reward members can enjoy two of our culinary classics for $12. The results were strong as we added new loyalty members, reactivated lapsed guests, and drove a meaningful increase in traffic to our website. Based on that performance, we plan to build this into a repeatable program and execute it on a quarterly basis.

We have also launched our fresh campaign highlighting ingredient quality and reinforcing the care that goes into every dish, helping to elevate how our guests perceive our food. On the culinary side, we are executing a focused strategy that balances fan favorite returns, bold global flavors, and culturally relevant partnerships to drive both frequency and new guest engagement. This progress began last year with the most significant menu transformation in our company’s history as we introduced a range of new and enhanced dishes that strengthen the core of our offerings. We followed that with our Delicious Duos platform, which reinforced our value proposition in a disciplined way as well as provided further reinforcement of the new and enhanced menu items.

Later in the year, we introduced Chili Garlic Ramen, one of our most successful limited time offers, which brought new guests to the brand and further reinforced Noodles as a credible, differentiated fast casual destination for globally inspired noodle dishes. In the first quarter, Steak Stroganoff returned as a highly successful limited time offer. We brought it back in response to strong guest demand. The results reinforced both the strength of our loyal guest base and our ability to attract new guests. We also expanded how we supported that launch through differentiated marketing initiatives to build broader awareness to reach beyond our core guests. More broadly, fan favorites like Steak Stroganoff play an important role in our strategy. For longtime guests, they create a reason to return. For new guests, they provide an easy entry point into a brand through dishes we know resonate.

We continued that approach into March by highlighting our Asian category and bringing back Indonesian Peanut Sauté alongside Chili Garlic Ramen. This work reinforced our global flavor profile, showcasing the variety on our menu, and helped lift the overall Asian category. During this LTO window, our Asian category mix has increased 40%, a clear signal that this strategy is resonating with guests. As limited time offers remain a key part of our menu strategy, I’m excited to share our newest LTO, Chicken Artichoke & Asparagus Rigatoni, which is available today nationwide. This dish is a bright spring-forward pasta that brings together fresh seasonal ingredients with the comforting flavors our guests expect from Noodles.

In tandem with this LTO, we are partnering with Cravings by Chrissy Teigen to offer guests the Craveable Bundle, which includes our new Chicken Artichoke & Asparagus Rigatoni alongside a Cravings-inspired Crispy, a nostalgic sweet and salty twist on our signature treat. This is another example of how we are delivering craveable food while elevating it through the right partnership. We know Noodles and the Cravings brand, which has a significant following by one of our key demographics, certainly knows Cravings. Together, we are bringing those strengths to life in a way that allows us to show up in culture authentically while driving awareness, trial, and engagement. Across all these efforts, the through line is clear. We are executing well in our restaurants, supporting it with disciplined marketing and delivering craveable food.

We create a better guest experience that is translating into consistent performance and steady growth in both comparable sales and margins. At the same time, we have taken a disciplined look at our portfolio and how our restaurants are performing across markets. In select areas, we had too much density, particularly as our off-premise sales continued to grow. We made the decision to optimize our footprint. By closing underperforming restaurants in these areas, we have seen a significant transfer of their sales to nearby restaurants, which results in a higher baseline average unit volume for those go-forward restaurants, which also further improves restaurant level margin and profitability. It also allows us to focus our resources on our strongest restaurants, improving efficiency and drive better overall company profitability. The progress we are seeing is helping across the business and is building on itself.

We are seeing a shift in mindset across the organization, and our teams believe they can impact results. They are taking ownership, and as we continue to reinforce strong execution, winning is becoming contagious across our teams. That is what allows this momentum to sustain. As we look ahead, we will stay focused, remain disciplined, and continue executing at a high level every day. With that, I will turn it over to Mike to walk through the financial details.

Thank you, Joe. In the first quarter, our total revenue was relatively flat compared to last year at $123.8 million, with strong comp sales growth mostly offset by the closing of underperforming locations. System-wide comp restaurant sales during the first quarter increased 9.1%, including an increase of 9.4% at company-owned restaurants and an increase of 8% at franchise restaurants. Company comp traffic during the first quarter increased 4.8% and average check increased 4.4%, inclusive of 2% effective pricing during the quarter. Company average unit volumes in the first quarter increased 13.5% to $1.49 million.

Our sales growth in the first quarter, which was an acceleration of the sales growth we saw in the back half of 2025, delivered impressive restaurant contribution margin growth. Our restaurant contribution margin in the first quarter increased 460 basis points to 14.9% from 10.3% in the first quarter of 2025. COGS in the first quarter were 25.4% of sales, a 120 basis point decrease from last year, which was driven by lower food waste related to new menu items, menu pricing, and lower discounting, partially offset by higher food costs associated with our new menu offerings and modest inflation. Our food inflation in the first quarter was 0.2%.

Labor costs for the first quarter were 30.0% of sales, which was down 250 basis points to prior year, primarily due to the benefit of sales leverage and labor efficiencies, partially offset by wage inflation. Hourly wage inflation in the first quarter was 1.9%. Occupancy costs in the first quarter decreased to $10.4 million compared to $11.5 million in 2025 due to a reduction in our company-owned restaurant count over the last twelve months. Other restaurant operating costs increased by 10 basis points in the first quarter to 21.2%. The increase in other restaurant operating costs was primarily driven by a combination of higher third-party delivery fees from higher third-party delivery channel sales and higher marketing expenses, which were mostly offset by sales leverage and lower repairs and maintenance costs.

G&A in the first quarter was $12.5 million compared to $12.8 million in 2025. Net loss for the first quarter was $3.4 million or a loss of $0.58 per diluted share, compared to a net loss of $9.1 million or a loss of $1.58 per diluted share last year. The loss in the first quarter of 2026 included a $2.7 million non-cash impairment charge, primarily related to our decision to close underperforming restaurants. Our adjusted EBITDA in the first quarter more than tripled to $7.7 million compared to $2.4 million in the first quarter of 2025. Our first quarter capital expenditures totaled $2.1 million compared to $2.9 million in 2025.

At the end of the first quarter, we had $1.4 million of available cash and our debt balance was $106.8 million, which was a reduction of $3.4 million from our debt balance at the end of 2025, as we were able to pay down debt in a seasonally low quarter. In the first quarter, we closed 20 company-owned restaurants and three franchise restaurants. The 20 company-owned restaurants were closed as a part of our restaurant portfolio optimization project, which continues to yield a significant transfer of sales to nearby locations given our high mix of off-premise sales, contributing to improvement in our comp sales and overall profitability.

That said, a majority of the comp restaurant sales increase in the first quarter was driven by the improvement in our underlying business fundamentals, with our portfolio optimization providing an added benefit. Overall, we are extremely pleased with our first quarter results, which exceeded our expectations as our restaurant contribution margin and adjusted EBITDA improvements were driven by our double-digit average unit volume increases paired with effective cost management. As we reflect on the first quarter results and look forward to the rest of the year, we're raising our full year 2026 guidance to the following: Total revenue of $483 million-$498 million, including comp restaurant sales growth of 7%-10%. Restaurant contribution margin between 15.5% and 17%.

General and administrative expenses of $50 million-$53 million, inclusive of stock-based compensation expense of approximately $2.5 million. Depreciation and amortization expense of $24 million-$25 million. Interest expense of $10 million-$11 million. Adjusted EBITDA between $32.5 million and $37.5 million. 1 to 2 new franchise restaurant openings. Restaurant closures, 30 to 35 company-owned restaurants and 5 franchise restaurants. We estimate total 2026 capital expenditures of $9.5 million-$10.5 million. We continue to expect to be free cash flow positive and have the opportunity to reduce our debt balance in 2026 by approximately $10 million, including the $3.4 million reduction in the first quarter. For further information regarding our 2026 expectations, please see the Business Outlook section of our press release.

With that, I'd like to turn the call back over to Joe for final remarks.

Thanks, Mike. We are very pleased with our first quarter results, reflecting in continued strong momentum at Noodles & Company, which continues into the second quarter. We are very encouraged by this momentum and remain focused on executing the fundamentals every day that are delivering better overall guest experience, as evidenced by sequential improvement in our guest satisfaction scores, sustained traffic growth, increased engagement with our guests, and more consistent in-restaurant performance. Thank you for your time today, and I'll now turn the call back over to the operator.

Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. If you would like to ask a question, please press star then one on your touch tone phone. You will hear a confirmation tone to indicate that you have joined the queue. If you decide to withdraw the question, please press star and then two to remove yourself from the list. Again, if you would like to ask a question, please press star and then one now. The first question that we have comes from Todd Brooks of Benchmark Company. Please go ahead.

Hey, guys. Congratulations and thanks for taking a few questions here. Appreciate it.

Thank you, Todd.

Thanks, Todd.

Mike, you had, you kinda quantified the same store sales in Q1 as majority driven by kinda fundamental business improvements and the momentum in the business. I think last quarter you kinda parsed out the sales transfer contribution versus the contribution from the fundamental improvements. Is that something you'll do this quarter as well?

You mean for the second quarter? Is that the same method for the second quarter?

Well, well, no, for same store sales, I'm just wondering what came from the contribution from closed locations versus?

Oh.

Just the core business.

Yeah, we talked about 200-300 basis points, a few weeks ago during our Q4 call, and that's about where we landed, right in the middle of that, about 250 basis points attributable to the closed locations. You know, most of the benefit was due to core business improvement, which is really encouraging to see.

Yeah, it's fantastic. Then it sounds silly 'cause the same store sales are so strong, but did you guys have any winter weather-related impact that muted results in the first quarter that you would call out?

Just timing between the periods, but overall, we feel like it, you know, kinda washed out and wasn't a big impact for the quarter.

Okay, great. Joe, you talked about the introduction of a boost week. I was wondering kind of the, is this something you're gonna tease for customers ahead of time, or is it something you're gonna drop on them kinda? What's the strategy for how this rolls out quarter after quarter?

Yeah, great question, Todd. That's a strategy around our reward members, so it's offered to them, and it's also offered to other guests once they sign up for our reward activity. It's something that attracts new guests to our app as well as our existing guests to give them a great promotion. With the results we saw, it's something that we're gonna continue throughout the year.

Okay. I assume that you would stagger that with the new LTO rolling out today. It wouldn't be something we would see until later in the quarter then, the boost week?

Correct. It's specific weeks of the year outside of our existing LTO.

Okay, great. You talked about the second quarter LTO. I know last quarter, you had some additional items when you were running the sauté. You added the ramen back in. Are there any other kind of add-ins to this LTO, or is it going to be this dish standing on its own through the quarter?

Just the partnership that we are with Cravings with Chrissy Teigen, and getting the benefit of all her followers, as well as a new treat to put it in the bundle. We are standing on our LTO for this quarter, and with other new news coming up in the remainder of the year.

Okay, a final one for me, and thanks for being patient with all the questions. Mike, I think you talked about check being up 4.4%. Can you break that down between price and mix?

Yeah, we had about 2% price for the quarter, and that's really our expectation for the full year 2026, with the rest coming from mix. The mix benefit we've been seeing for a couple of quarters now as we've had the new menu items, which have a little higher price point. Also the strength of our delivery channel is pushing the check up a bit as well.

Okay, great. Congrats again, guys. Really, really good stuff here.

Thank you, Todd.

Thanks so much, Todd.

Thank you. Ladies and gentlemen, that then concludes today's conference call. Thank you for joining us. You may now disconnect your lines.

Good afternoon, and welcome to today's Noodles & Company's fourth quarter 2025 earnings conference call. All participants are now in a listen-only mode. After the presenters' remarks, there will be a question-and-answer session. As a reminder, this call is being recorded. I would now like to introduce Noodles & Company's Chief Financial Officer, Michael Hynes.

Thank you, and good afternoon, everyone. Welcome to our fourth quarter 2025 earnings call. Here with me this afternoon is Joe Christina, our Chief Executive Officer. I would like to start by going over a few regulatory matters. During the call, we may make forward-looking statements regarding future events or the future financial performance of the company. Any such items should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements are only projections and actual events or results could differ from those projections due to a number of risks and uncertainties, including those referred to in this afternoon's news release and the cautionary statement in the company's Annual Report on Form 10-Ks and subsequent filings with the SEC. During the call, we will discuss non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our fourth quarter 2025 earnings release. To the extent that the company provides guidance, it does so only on a non-GAAP basis and does not provide reconciliations of forward-looking non-GAAP measures. Quantitative reconciling information for these measures is unavailable without unreasonable efforts. I will now turn the call over to Joseph Christina, our Chief Executive Officer.

Thank you, Mike, and good afternoon. As we reflect on 2025, the story is clear. We have built meaningful and sustained momentum across Noodles & Company, culminating in system-wide comp sales growth of nearly 7% in 2025 and further escalating to over 9% in 2026 thus far, with only a week remaining in the quarter. And profitability far exceeded the prior year in 2025 and as we have guided in 2026. That progress is not accidental. It is the result of disciplined execution and a clear focus on what matters most. 2025 was a pivotal year for the brand. We significantly elevated our food, with the launch of our most comprehensive new menu in the history of the company and the introduction of craveable limited-time offers, including Chili Garlic Ramen, one of our strongest LTOs in recent years, which we believe also introduced new customer groups to Noodles & Company. We leaned into strong value messaging with the launch of Delicious Duos, giving guests compelling meal combinations at an attractive price point that delivered balance, variety, and everyday affordability without compromising quality while also raising consumer awareness of our new menu offerings. We initiated a thorough review of our portfolio, resulting in the closing of underperforming restaurants, which have continued into 2026 and, importantly, has resulted in a material transfer of sales to nearby locations, resulting in a step baseline increase of average sales volume at those go-forward restaurants. Which also favorably impacted margins, as Mike will discuss in more detail shortly. And we strengthened operational excellence by introducing our Operational Excellence Review program, raising standards and driving greater consistency and accountability across every restaurant. Underpinning all of this was a renewed focus on the fundamentals. Throughout 2025, we tightened execution in our restaurants, improved food consistency, managed costs with discipline, and sharpened our marketing approach. When you consistently execute the fundamentals at a high level, performance follows. And that is exactly what we began to see in the back half of the year. But before I dive deeper into the progress we made in 2025, I want to highlight our first quarter comp sales performance to date as the progress we built last year has further accelerated into 2026, delivering sales increases, which we believe are the top of the fast casual industry. In the first quarter thus far, we have delivered continued increases in traffic and same-store sales, with system-wide comparable sales growth over 9% and traffic over 4%. March will mark our seventh consecutive period of traffic growth and, notably, period two of 2026 delivered one of the strongest comparable sales performances in the company's 31-year history. We kicked off the year by bringing back Steak Stroganoff as a limited-time offer, one of the most requested fan favorites ever. We leaned into that fandom with a creative AI-driven campaign that generated strong engagement and reminded guests why this dish has remained such an enduring classic. The Steak Stroganoff results exceeded prior launches of the LTO and cemented this great dish as a returning favorite craveable LTO over the winter months in the coming years. When you pair a comforting favorite like Steak Stroganoff with stronger restaurant execution and a great guest experience, it becomes even more craveable. The combination of great food and consistent operations is clearly resonating with our guests. We entered this year with clear goals and a sharpened focus, aligning the organization around four strategic goals: developing winning teams, igniting growth, driving guest satisfaction, and delivering strong financial results. These goals are shaping how we operate, how we invest, and how we measure success, and already, we are seeing that progress continue. With that context, let us recap progress we made in fiscal 2025 to build the foundation for our strong performance to start the year. Fiscal 2025 was about strengthening the core of our business and restoring consistency across the system. We started with the food. We sharpened our menu, elevated recipe standards, and improved execution at the restaurant level. Enhancing training and tightening operational controls drove better consistency bowl after bowl. Our limited-time offers were also more impactful and more focused, bringing energy to the brand and reinforcing our authority in noodles. A great example is Chili Garlic Ramen, which we introduced as a limited-time offer in October. Inspired by trending ramen hacks, this brothless bowl delivered the buttery, spicy, umami-packed flavors guests were already craving. It quickly became one of the strongest LTOs in our history. A new ramen dish not only resonated with our loyalty members, but also, we believe, introduced our brand to a new consumer who desired a ramen dish in a fast casual environment. We have just recently brought the ramen back along with a previous fan favorite, Indonesian Peanut Chicken Sauté, as we raised awareness of our Asian noodle collection on our menu. Furthermore, we are currently evaluating additional ramen recipes, as we believe a ramen section of our menu could be as equally successful as our collection of Macs. Together, these improvements strengthened guest confidence in our food and helped drive stronger engagement with the brand throughout the year. Operational excellence follows. The launch of our Operational Excellence Review, or OER, program introduced a more structured coaching accountability model across our restaurants. Area managers and regional leaders now use OERs to focus on root causes, develop clear action plans, and reinforce consistent execution across our teams. This approach has strengthened leadership alignment, improved training accountability, and raised operational standards across the system. We are seeing the results of that work in our guest experience. Over the course of the year, our OSAT scores improved, as measured by SMG, meaningfully, and we have steadily closed the gap with the fast casual category average. In January, our overall satisfaction reached 72%, the closest we have been to the fast casual benchmark since launching the program in early 2024. These improvements reflect stronger execution across the fundamentals of the guest experience, from cleaner restaurants and better hospitality to more consistent food quality and stronger dinner operations. Just as importantly, our teams are now operating with clearer expectations, stronger coaching, and a shared focus on continuous improvement across people, operations, guests, and financial performance. We also established a more thoughtful and sustainable approach to value. As we listened closely to our guests, it became clear that value is not simply about the price. Our guests want to feel good about the amount of food they receive relative to what they pay for. Value means balance, feeling satisfied, and leaving with the sense that you had a great dining experience. In addition, in the current macroeconomic environment, today's consumer has become more value-conscious, which we wanted to be able to address in our menu offerings, not through a temporary discount, but rather in an ongoing value-oriented option for our guests. That insight informed the launch of Delicious Duos. Rather than introducing a discount, we focused on elevating our value proposition by offering craveable combinations that deliver both variety and satisfaction at an accessible price point. The platform has resonated with guests, supporting traffic and frequency while maintaining the integrity of our heart. It also raised awareness of our new menu due to the combinations Delicious Duos offers and the marketing of that offering, which showcased those various menu offerings. Our marketing approach has become more disciplined, more data-driven, and more focused on the core of who we are as a brand. We returned to the foundation of our business, noodles. Our messaging leaned into craveability, variety, and the comforting, shareable occasions that define the Noodles & Company experience. As we often say internally, we know noodles. And our marketing is once again centered on celebrating that authority. At the same time, we evolved how we plan and manage marketing investment. We moved away from static annual plans toward an always-on, performance-optimized marketing engine. Using ad-supported data and channel-level performance input, our teams dynamically adjust investment based on return, incrementality, and audience response, allowing us to balance brand building with demand generation. As a result, we are managing media investment more actively across channels, reallocating dollars toward the highest return opportunity while refining audience targeting and leaning into markets where guest response is strongest. Combined with improvements in food, operations, and value, these efforts contributed to steady improvement in comparable sales trends, traffic stabilization, and eventual growth, and expansion of restaurant-level margins. At the same time, we strengthened the financial foundation of the business. We improved labor productivity through better scheduling and tightening operational management. We managed food costs with greater precision. And we increased efficiency in our marketing deployment. These actions, combined with leveraging the significant same-store sales increases, expanded restaurant-level margins in 2025 to 14.1%, an improvement of 290 basis points year over year. Our guidance for 2026 that Mike will discuss calls for improved margins for the full year of 2026 over 2025, due to all that I have mentioned. The result is a healthier system with stronger unit-level economics and a more resilient operating model. What gives me confidence today is the consistency we are seeing across the business. Food is better. Execution is stronger. Standards are clearer. And the results are following. The work we have done in 2025 created a solid foundation. We are now building on that foundation as we move through 2026. Before I turn it over to Mike, I would like to provide an update on the status of our previously announced review of strategic alternatives. As previously shared, our Board of Directors initiated a review of strategic alternatives to explore ways to maximize shareholder value. The process may include a range of potential actions such as refinancing existing debt or other strategic or financial transactions. No decisions have yet been made, and there is no set timetable for completion. Until the review is completed, we will not provide additional commentary. I will now turn the call over to Michael Hynes to walk through the financial details.

Thank you, Joe. In the fourth quarter, our total revenue increased 0.8% compared to last year to $122,800,000. System-wide comp restaurant sales during the fourth quarter increased 6.6%, including an increase of 7.3% at company-owned restaurants and an increase of 3.8% at franchise restaurants. Company comp traffic during the fourth quarter increased 1.4% and average check increased 5.8%, inclusive of 2% effective pricing during the quarter. Company average unit volumes in the fourth quarter increased 9.9% to $1,440,000. As Joe mentioned, our sales momentum continued to accelerate in 2026. Our company comp sales in 2026 are positive over 9% year to date. We are extremely encouraged by the sales acceleration, especially against a tougher comparison in 2025, where comp sales were positive 4.7% and incorporated significant marketing of our new menu rollout in March 2025. Turning back to 2025, our sales acceleration in the fourth quarter delivered impressive bottom-line growth. Our restaurant contribution margin in the fourth quarter increased to 14.1% from 11.2% in 2024. Cost of goods sold in the fourth quarter was 26% of sales, a 120 basis point decrease from last year, which was driven by a combination of menu price, vendor rebates, and lower discounting, partially offset by higher food costs associated with our new menu offerings and modest inflation. Our food inflation in the fourth quarter was approximately 1%. Labor costs for the fourth quarter were 30.9% of sales, which was down 140 basis points to prior year, primarily due to the benefit of sales leverage, partially offset by wage inflation. Hourly wage inflation in the fourth quarter was 2.3%. Occupancy costs in the fourth quarter decreased to $10,700,000 compared to $11,400,000 in 2024 due to a reduction in our company-owned restaurant count over the last twelve months. Other restaurant operating costs increased 40 basis points in the fourth quarter to 20.1%. The increase in other restaurant operating costs was primarily driven by a combination of higher third-party delivery fees from higher third-party delivery channel sales and higher marketing expenses, which were mostly offset by sales leverage. G&A in the fourth quarter was $11,700,000 compared to $11,300,000 in 2024. Net loss for the fourth quarter was $6,800,000, or a loss of $1.16 per diluted share, compared to a net loss of $9,700,000, or a loss of $1.70 per diluted share last year. The loss in 2025 included a $5,600,000 non-cash impairment charge primarily related to our decision to close underperforming restaurants. Adjusted EBITDA in the fourth quarter was $7,600,000 compared to $4,000,000 in 2024, an increase of over 88%. In the fourth quarter, we closed nine company-owned restaurants and three franchise restaurants. Our fourth quarter capital expenditures totaled $2,300,000 compared to $3,800,000 in 2024. At the end of the fourth quarter, we had $1,300,000 of available cash, and our debt balance was $110,200,000 with over $11,000,000 available for future borrowings under our revolving credit facility. As a part of our restaurant portfolio optimization project, we closed a total of 33 restaurants in 2025, and have closed 20 restaurants year to date in 2026. We continue to see great results from this ongoing project. The most meaningful impact is the post-closure transfer of sales to nearby Noodles & Company restaurants, which is driving a significant increase to our company-wide restaurant-level profits. This is attributable in large part to our high mix of off-premise sales. In 2025, we estimate that the closures benefited comp sales by approximately 100 to 150 basis points. We forecast that the portfolio optimization project will positively impact 2026 comp sales by 200 to 300 basis points. We view the sales transfer from closed restaurants to nearby Noodles & Company restaurants as a permanent benefit to our baseline average unit volumes at those go-forward sites. Throughout 2026, we will continue to look for additional opportunities to optimize our portfolio of restaurants in an effort to increase restaurant-level profitability, including the benefit of sales transfer trends we have been experiencing. We currently estimate that we will close 30 to 35 restaurants in 2026. Turning to guidance. Our forecast for 2026 projects the following: comp sales of approximately 9% and adjusted EBITDA of $5,700,000 to $6,300,000, more than doubling prior year results. For the full year 2026, we are providing the following guidance: total revenue of $478,000,000 to $493,000,000, including comp restaurant sales growth of 6% to 9%; restaurant contribution margin between 14.7% and 16%; general and administrative expenses of $49,000,000 to $52,000,000, inclusive of stock-based compensation expense of approximately $2,500,000; depreciation and amortization expense of $24,000,000 to $25,000,000; interest expense of $10,000,000 to $11,000,000; adjusted EBITDA between $30,000,000 and $35,000,000; one to two new franchise restaurant openings; and we estimate total 2026 capital expenditures of $9,500,000 to $10,500,000. We expect to be free cash flow positive and have the opportunity to reduce our debt balance in 2026 by $5,000,000 to $10,000,000. For further information regarding our 2026 expectations, please see the business outlook section of our press release. With that, I would like to turn the call back over to Joe for final remarks.

Thanks, Mike. We have built meaningful momentum by focusing on the fundamentals and executing with disciplines that elevate the guest experience. When great food, strong operations, and targeted marketing that connects with guests come together, performance follows. And that is what we have been seeing come to fruition. This is evidenced by the significant year-over-year increase in adjusted EBITDA in 2025 and our expectations for significant further growth in adjusted EBITDA in 2026. We are confident that the foundation we built in 2025 and the strong acceleration of sales in early 2026 position us for sustainable growth throughout 2026 and beyond. Thank you for your time today. I will now turn the call back over to the operator.

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star key. One moment while we poll for questions. Our first question comes from the line of Todd Brooks with Benchmarkstone. Please proceed with your question.

Hey. Thanks for the questions, and congrats on such a strong start to Q1 after a really great finish to 2025. So well done with that. Two questions, if I may. Thanks. Two questions, if I may. One is your way, maybe it is best looked at through the lens of the 2026 guidance. You talked about a Q1 contribution from sales transfer. You talked qualitatively about kind of a margin benefit of the sales transfer. If we can talk maybe, Mike, on the year-over-year improvement in both metrics in the 2026 guidance, how much is attributed to the sales transfer versus just the core underlying momentum that you are seeing in the business right now?

Sure. If we look at the full-year guidance for 2026, $30,000,000 to $35,000,000 of adjusted EBITDA, if we just take the midpoint there, it suggests about a $10,000,000 EBITDA improvement year over year. Think about a little less than half of that will be due to closures, just under $5,000,000, with the rest due to core business improvement.

Okay. Great. That is helpful. And we will just back that up the income statement for kind of the restaurant-level margin thoughts to get at what the improvements are from operational improvements and leverage then? Okay. Perfect. And then the second one that I had for you, the strength and the 9% numbers, pretty amazing considering the environment we are in. Joe or Mike, do you have any sense of any stimulative benefits from maybe some of the early tax refund activity benefiting the business or kind of to the other side over the last few weeks, any pressure that you have seen from activity and gas price increases? I am just trying to figure out how we get the 9% number to something that reflects where the consumer kind of is at at the baseline level, not some of these exogenous pressures and benefits. Thanks.

Yes. Those are two pretty big factors in the industry, and they are both fresh. When we look at our performance year to date, outside of weather, we see a lot of consistency. It is not like we saw a big change in March when tax refunds would have started coming in or post the conflict. So we are not seeing an obvious impact on our end. And also, when we look at our performance versus industry, the industry has been hovering in the zero to 1% same-store sales range, and we have been consistently beating that, going back to early 2026, by over nine percentage points. So I do not think those things are showing up yet.

Yes, and I think, Todd, also, I think, also, we have built a menu around what you have and what you are willing to pay. So as we leaned into Delicious Duos and then had great LTOs that drive more traffic into the restaurants, I think we have something for everyone. And that should sustain us through the coming months.

And how do Delicious Duos mix, Joe?

They mix depending on whether there is a strong LTO going on, because that gets factored into the Delicious Duos mix, but right around 5%, which is what we expect it to be since its inception back in late July last year.

Okay. Great. Thank you both.

Thank you. We have reached the end of the question-and-answer session, and this also concludes today's conference. You may disconnect your line at this time. We thank you for your participation. Have a great day.