Noble Roman’s ((NROM)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Noble Roman’s recent earnings call painted a generally positive picture of the company’s financial health, with notable improvements in income and revenue. The company has strategically managed costs, although it continues to face challenges such as cost pressures from cheese and labor, as well as administrative hurdles like a delayed IRS receivable and issues with securing a new accounting firm.
Significant Increase in Net Income Before Taxes
Noble Roman’s reported a substantial increase in net income before taxes, reaching $490,000 for the quarter compared to $56,000 in the same period last year. This impressive growth highlights the company’s effective financial strategies and operational efficiencies.
Revenue Growth
The company experienced a 4.5% increase in total revenue for the quarter compared to the previous year. This growth underscores Noble Roman’s ability to expand its market presence and enhance its revenue streams.
Improvement in Same-Store Sales
Same-store sales in the Craft Pizza & Pub segment rose by 4.5%, outperforming competitors like Pizza Hut, which saw a decline of about 5%. This indicates strong customer loyalty and effective marketing strategies.
Increased Margins
Margins at the Craft Pizza & Pub improved significantly, increasing to 13.6% from 11% a year ago. This improvement reflects the company’s successful cost management and operational efficiencies.
EBITDA Growth
The trailing 12-month EBITDA grew from $3.06 million at the end of 2024 to $3.5 million at the end of Q2 2025. This growth in EBITDA demonstrates Noble Roman’s robust financial performance and ability to generate cash flow.
Successful Cost Management
Administrative expenses were cut by over $300,000 in the first half of the year, showcasing the company’s commitment to reducing overhead costs and improving profitability.
Cheese Price Relief Anticipated
While cheese prices increased by about 9% over the previous year, impacting costs, recent declines in cheese prices offer potential relief for the company moving forward.
Labor Challenges
Labor pressures remain a challenge, particularly in salary management, due to ongoing high costs and difficulties in hiring quality management. This continues to be an area of concern for Noble Roman’s.
Moderated Nontraditional Unit Growth
The company sold 30 nontraditional units, but the robust sales growth seen previously has not been repeated due to accounting adjustments and amortization of fees.
Delayed IRS Receivable
A $507,000 receivable from the IRS has been delayed, impacting cash flow despite approval. This administrative hurdle poses a temporary financial challenge for the company.
Accounting Firm Issues
Noble Roman’s is facing challenges in securing a new accounting firm, with a lack of available qualified firms at acceptable costs, adding to the administrative difficulties.
Forward-Looking Guidance
Looking ahead, Noble Roman’s remains optimistic about its financial trajectory. The company anticipates further relief from declining cheese prices and is progressing with refinancing efforts. Despite some cost pressures, the company is confident in achieving its goal of 60 nontraditional units by year-end, having already sold about 30. Administrative expenses have been reduced significantly, although this decrease may not be fully sustainable.
In conclusion, Noble Roman’s earnings call reflects a positive quarter with significant growth in income and revenue, alongside strategic cost management. While challenges remain, particularly with cheese and labor costs, the company is optimistic about future relief and continues to make strides in its operational and financial goals.