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What: Shares of Noodles & Co (NASDAQ:NDLS) fell 24.4% in July, according to data provided by S&P Global Market Intelligence, after reporting disappointing preliminary second-quarter results.

So what: Management said total revenue for the quarter will be about $121.0 million. The bigger worry is that same-store sales were down 0.9% for company-owned restaurants, and franchise stores were down 2.1%.  

Results were disappointing, and CEO Kevin Reddy also announced he was stepping down from the company immediately. This leaves a leadership vacuum at a time when Noodles & Co needs leadership to turn operations around.

Now what: After swinging to a net loss in 2015, it's not encouraging that Noodles & Co is still in decline on a same-store sales basis. Typically, that's a great measure of a company profit growth potential because restaurants generate leverage from the fixed costs of each restaurant. So, when same-store sales decline, it can hit the bottom line fast. Until that trend turns around, I don't see much upside for shares. Further, with the CEO position now open, we won't know what the turnaround strategy will look like for some time.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.