NEW YORK (TheStreet) -- After seeing its stock slurped up by investors when it went public in June 2013, things have become a bit soggy since for fast casual restaurant chain Noodles & Company (NDLS) .
Noodles stock doubled on its first day of trading June 28, 2013, to close at $36.75, but since then, its stock has fallen about 62%. According to Bloomberg data, the company's same-restaurant sales were unchanged in the second quarter, following a meager 0.9% increase to begin the year. In 2014, the chain saw its same-restaurant sales rise 0.2%, down from a 3% gain in 2013 and a 5.2% improvement in 2012.
"I think part of the reason for the sales trend is macroeconomic related, but also a need for us to tell our food story and drive more brand awareness," explained Noodles & Company chairman and CEO Kevin Reddy in an interview at TheStreet's New York headquarters.
Reddy also pointed to geographic considerations for sales weakness -- the company has about 18% of its over 440 restaurants in the Mid-Atlantic region, which has been impacted by layoffs at government agencies.
Now Noodles & Company is making a bid to cook up better sales by serving food free of artificial colors and ingredients, a strategy that's worked well for rivals. The company launched its most visible marketing blitz ever on Tuesday. The campaign, which spans direct mailers, outdoor billboards and TV, stresses the company's "real food, real cooking and real flavors."
Noodles & Company's new marketing plan emphasizes its ingredient quality.
As part of its new message, Noodles & Company is also changing its menu. The company has made a commitment to offer a selection of meat and poultry free of antibiotics or hormones by 2017, resembling efforts undertaken by Panera Bread (PNRA) and burrito maker Chipotle (CMG) .
Bacon without antibiotics or hormones will arrive at Noodles & Company restaurants this month, with steak and meatball options coming by mid- to late-2016. Hormone-free cheddar jack cheese will be tested on the company's popular mac and cheese pasta dish in the Colorado market, where it operates over 50 restaurants, in the fourth quarter of this year.
"I think we will start to see a benefit in the fourth quarter -- we are really only launching [our marketing campaign] this week and October; we've done some of the initiatives in the third quarter but didn't have video," said Reddy.
Noodles & Company is testing sweet and spicy Swedish meatballs.
Despite the latest initiatives and Noodles' differentiated concept in a crowded fast casual industry, the company faces an uphill battle in wresting share away from surging Chipotle and other "better-for-you" fast-casual players.
The company has to overcome an additional stigma among U.S. consumers that eating pasta is bad for the waistline, which has also impacted sales at Italian-themed chains.
Maggiano's, which operates about 49 locations and is owned by Brinker International (EAT) , saw its same-restaurant sales decline by 0.1% in the most recent quarter.
"All these things cycle a bit, so [Maggiano's is] in a little bit of a down cycle -- I think it will be short-lived, and will cycle back up," said Brinker International president and CEO Wyman Roberts in a June 9 interview with TheStreet.
Darden's (DRI) Olive Garden chain has had some success in reviving sales by stepping outside of the pasta realm, introducing sandwiches utilizing its popular breadsticks. The company has debuted new protein-focused dishes with fewer than 575 calories, too.
Olive Garden has cooked up four consecutive quarters of same-restaurant sales growth -- in the fiscal first quarter ended Aug. 30, same-restaurant sales rose 2.7%.
In Colorado, Noodles & Company's mac and cheese will be made from hormone-free cheese.
Difficulty in getting people to eat pasta and noodles has even led Noodles & Company to consider changing its name.
"We have thought about the name, especially with different diet trends that come and go -- but we feel there is still a lot of equity in Noodles & Company, and in reality, we are a noodles authority, and our challenge has been driving an understanding of the concept when people pull into a parking lot," Reddy said.
The company has also begun remodeling restaurants to include the words "world kitchen" out front, giving passersby a clearer idea what food is being served inside.
"We believe life happens over a bowl of noodles," said Reddy at a testing event on Monday. If Noodles & Company can get Millennial families to take a break and sit down together for a dinner of quality-sourced ingredients, the once-hot IPO may be able to get back into the good graces of investors again.