There’s no al dente firmness to be had in Noodles & Co. (NASDAQ:NDLS) based on the latest news. Not only is the noodle shop’s stock plunge 14.7% in Friday’s trading but there are a string of reasons behind the decline that all add up to trouble ahead.
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The first problem was that Noodles & Co. lost a member of its C-suite, specifically Carl Lukach, who served as CFO. That alone should have some nerves on edge; the CFO doesn’t typically leave a thriving company. Moreover, Lukach will be leaving to take on “…a similar role at a company in the retail industry,” suggesting that the problem with Noodles & Co. was Noodles & Co. Lukach had been with Noodles & Co. for two years and filling in for him—in perhaps the most unnerving surprise of all—will be the current CEO, Dave Boennighausen.
Bad enough that the CEO has enough time on his hands to also be the CFO, but it doesn’t get better from there. Just yesterday, one of Noodles & Co.’s leading bull analysts, Joshua Long at Stephens, downgraded the stock from Buy to Hold. While Long noted that the “…long-term growth opportunity remains intact…” thanks to “…a series of menu, operational and technology initiatives,” the loss of Lukach will be a big hit to the company’s overall operations. Weakening traffic didn’t help matters much, either.
Insider trading at Noodles & Co., meanwhile, suggests things are doing all right therein. Insiders bought around $1.1 million worth of stock in the last three months. As a result, insider confidence at Noodles & Co. is currently rated “Positive.”
