Noodles & Co. CEO on labor shortage: There's 'light at the end of the tunnel'

Noodles & Company saw an uptick in digital sales in the second quarter. Noodles & Company CEO Dave Boennighausen joins Yahoo Finance Live to discuss.

Video transcript

- Well, the ADP private payroll survey out today showed just 303,000 new jobs were added in July. That's roughly half of what the analysts were expecting. The tight labor market overall weighing on recovery for so many businesses as they shell out some big incentives to try and attract new employees.

Let's bring in the CEO of Boodles and Company. We've got Dave Boennighausen joining us today. Davis, great to talk to you. You know, you had some really strong earnings out yesterday with revenue up about 57%. And it feels like this is kind of a thread we're hearing with so many businesses.

The businesses coming back. The customers are coming through the door. And yet they can't find enough workers to fill that demand. What does that dynamic look like for you?

DAVID BOENNIGHAUSEN: Yeah. It's great to be here, Akika. That's definitely been the common thread that we're seeing in the industry. What we're seeing unfortunately years in company, able to keep those seem to be the worst of the labor shortages.

Now that we've gotten that behind us. We go back a few months. There was definitely a mismatch in terms of the number of people we were looking to hire versus number of kids coming through our door. That has steadily increased over the last couple of months. So we're actually pretty encouraged that we're starting to see a light at the end of the tunnel when it comes to that labor shortage.

- On the other fronts here that we've been watching play out, kind of industry wide we've been talking about a lot of costs going up, not just for labor, but also other things that go into kind of products. Businesses are making. Obviously in the restaurant space, you got a lot of costs there on that front to you.

When you see kind of pricing pressures there, I mean, is there anything that stands out. I know you guys topped plane estimates here. But earnings come in a bit lately. Talk to me about what you're seeing on that front.

DAVID BOENNIGHAUSEN: Yeah, it's really we're seeing across the board. We're starting to see inflation kind of in all aspects of the business. And it's not just rising cost, but you're seeing everything from lumber to the resin that goes to go materials and certainly on the labor side as well.

Of in many cases, it's availability. It's just getting the actual pieces of equipment that we need to operate the restaurants to open new restaurants. That's going to challenge virtually. No disruption that we've seen in our business today.

But we definitely got a lot of interesting. And unique things that are happening in that space when it comes to inflation or just availability of disruption.

- David, let me ask you about what we were talking about with the LA city attorney earlier in the program, which is this question about vaccine mandates. Obviously, you want people to feel comfortable coming into your restaurants. And there is a huge debate that's happening between mask mandates and vaccine mandates as well. Where do you stand on that at least within your stores?

DAVID BOENNIGHAUSEN: Sure. Feels like deja Vu all over again. If we go back just over a year ago, all of us in the restaurant space.

Particularly somebody like noodles a company, we've got restaurant and constantly following very dynamically changing mandates, very dynamic changing regulations. That's what our biggest focus is right now is ensuring that across those different geographies, across those different regions, we're following all those mandates.

We have encouraged our team members to be vaccinated. Not required as of yet. But we do give for four hours of paid time off to our employees encouraging them to get vaccinated.

We're fortunate before the pandemic. 60% of our sales were actually off premise. And now, as we said today, that's still around 80% of our sales.

So as we see that dynamic ship, last year, we were one of the first fast casual chains to go to an all 12 model. We're looking at not just what would vaccine mandates mass supply, but also the operating model itself.

We're not seeing changes in consumer behavior yet. So that's something that we have to track as we go for the next few weeks.

David Boennighausen, Noodles and needles and company CEO. It's great to talk to you today. Appreciate the time.