A fancy dish doesn't always equate to tasty food. Sometimes a simple bowl of mac and cheese is all that's needed to satisfy one's cravings.

Whether it's the microwavable kind or the nicer restaurant version, no one loves mac and cheese more than Americans, and a restaurant chain might have found a way to use it to its advantage.

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The slowdown in consumer spending and inflation has started to affect even the most popular restaurant chains, causing many to initiate mass closures due to underperformance and continuous sales declines.

Related: Another fast-food burger chain is quietly closing locations

Companies tend to make this move as a last resort to mitigate financial strain and reduce costs that have become burdens rather than beneficial investments.

However, when sales get back on track and turn around for the better, continuing to close locations may seem contradictory.Noodles & Company announces more store closures.Image source: Shutterstock

Mac and cheese saves Noodles & Company's business

Noodles & Company  (NDLS)  has faced challenges over the last few years with continuous sales declines and mass restaurant closures.

However, it decided enough was enough and enacted a menu relaunch in March, rolling out three new mac and cheese dishes and other innovative additions to better meet consumer demands.

This menu transformation was the best decision Noodles & Company could've made because it resonated well with consumers, driving an increase in sales during its last reported quarter.

"This sustained and significant improvement in our sales trends demonstrates to us that the execution of our previously announced strategic priorities have gained traction, especially while coming during a period when the industry has been impacted by lower consumer sentiment," said Noodles & Company CEO Drew Madsen in an earnings call. "We are certainly excited about the guest response to our new menu after seven weeks, including sales of our new mac and cheese dishes, which have significantly exceeded expectations," he added.

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Noodles & Company also upped its marketing and launched the "We Know Noodles" campaign, which it claims increased brand awareness, store traffic, and app usage by double digits. The campaign also fostered customer engagement, which improved loyalty and transactions.

In the first quarter of 2025, the company's total revenues were up 2% compared to the prior year. Same-store sales increased 4.7% at company-owned restaurants and 4.4% system-wide.

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However, despite improving its overall financial health, the restaurant chain continues to close more locations than it opens.

Noodles & Company reveals more upcoming store closures

Noodles & Company delivered a great quarter, but one aspect of its business continues to decline.

The chain ended the quarter with 369 company-owned restaurants, 11 fewer than last year's 380. In the quarter, it opened one company-owned restaurant but closed three, plus one franchise location, causing its restaurant-level contribution margin to decrease 10.3%.

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Although many factors, such as debt, impact restaurant chains' overall financial health, an increase in sales sometimes precedes the addition of new locations. Noodles & Company, however, has made a startling revelation.

The chain expects to close approximately 13 to 17 company-owned and four franchise restaurants in 2025. It attributes these continuous closures to higher food costs and increased marketing expenses.

The company plans to open two new restaurants this year, one in January and the other in June. However, more than two existing locations are expected to close.

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