Shares of Noodles & Co plunged as much as 21 percent in extended trading after the fast-casual restaurant chain slashed its full-year sales forecast as fewer diners visit its outlets.
The company also reported lower-than-expected second-quarter earnings due to a decline in same-restaurant sales, particularly in the Washington DC area where about 20 percent of its restaurants are located.
Noodles, which went public last year in a highly anticipated offering, has failed to live up to investors' expectations after its strong debut in June 2013 prompted comparisons with leading chains such as Panera Bread Co and Chipotle Mexican Grill Inc.
Noodles' shares have halved since touching a life-high in July 2013 as the company struggles to attract diners, who are cutting back on discretionary spending and preferring packaged ready-to-eat meals and healthier food over eating out at restaurants.
Shares of sandwich chain Potbelly Corp, the other fast-casual chain that went public last year, have also fallen steeply and are trading below their IPO price.
Noodles said on Wednesday it expected adjusted profit and comparable restaurant sales in 2014 to remain flat.
It had previously forecast full-year comparable restaurant sales to grow 2.5-3.0 percent and adjusted earnings-per-share to grow by 25 percent.
The company had posted adjusted earnings of 40 cents per share in 2013. Analysts on average were expecting Noodles to earn 50 cents per share in 2014, according to Thomson Reuters I/B/E/S.
Excluding items, the company earned 12 cents per share in the second quarter ended July 1, below the average analyst estimate of 15 cents.
Revenue rose 11.5 percent to $99.5 million but missed analysts' average estimate of $102.9 million.
Same-store sales fell 0.7 percent, while restaurants margins fell to 20.4 percent from 22.4 percent.
Noodles' shares were down 20 percent at $20.05 after the bell.
