First Watch Restaurant Group (NASDAQ:FWRG) Posts Earnings Results

First Watch Restaurant Group (NASDAQ:FWRG) announced its quarterly earnings results on Tuesday. The company reported $0.08 earnings per share for the quarter, beating analysts’ consensus estimates of $0.03 by $0.05, Zacks reports. The business had revenue of $349.86 million during the quarter, compared to analysts’ expectations of $348.99 million. First Watch Restaurant Group had a net margin of 1.45% and a return on equity of 3.10%. The business’s revenue for the quarter was up 10.7% on a year-over-year basis. During the same period last year, the business earned $0.05 earnings per share.

Here are the key takeaways from First Watch Restaurant Group’s conference call:

• Third-quarter revenue increased 10.7% to $349.9 million, supported by 1.0% same-restaurant sales growth and contributions from 147 non-comparable restaurants. Same-restaurant traffic declined 1.9%, but the company highlighted an 8.1% two-year sales increase and 0.8% two-year traffic increase.
• Adjusted EBITDA rose 17% to $39.7 million, with margin expanding to 11.4% from 10.8% a year ago. G&A leverage improved by 60 basis points, although restaurant-level operating margin declined 30 basis points to 19.4% due to higher food and controllable costs.
• Management raised its full-year outlook for Adjusted EBITDA to approximately $136 million, at the high end of its previous range, and now expects revenue growth of about 13.5%. Full-year commodity inflation is expected to be roughly flat, while capital expenditures were reduced to approximately $145 million.
• First Watch opened 16 restaurants in the quarter and 53 year to date, and remains on track for approximately 60 net new systemwide restaurants in 2026 and 55 openings in 2027. Recent restaurant classes are exceeding sales and return targets, supporting continued confidence in the brand’s expansion opportunity.
• Management plans to preserve flexibility around unit growth beyond 2027 because of higher interest rates and floating-rate borrowing exposure, while raising its long-term Adjusted EBITDA growth target through 2028 to more than 15%. The company is also testing TikTok GO and local linear television to broaden awareness and generate traffic, but these initiatives remain early-stage.

First Watch Restaurant Group Trading Down 2.8%

Shares of FWRG stock opened at $13.12 on Friday. The company has a debt-to-equity ratio of 0.43, a quick ratio of 0.22 and a current ratio of 0.25. The stock has a market capitalization of $809.90 million, a P/E ratio of 41.00, a price-to-earnings-growth ratio of 60.98 and a beta of 1.00. The company has a 50 day moving average price of $11.39 and a 200 day moving average price of $12.40. First Watch Restaurant Group has a fifty-two week low of $9.88 and a fifty-two week high of $18.77.

Wall Street Analyst Weigh In

Several analysts recently weighed in on the stock. Stephens reiterated an “overweight” rating and issued a $18.00 target price on shares of First Watch Restaurant Group in a report on Wednesday. Weiss Ratings upgraded First Watch Restaurant Group from a “sell (d+)” rating to a “hold (c-)” rating in a research note on Thursday, October 29th. Wall Street Zen upgraded First Watch Restaurant Group from a “strong sell” rating to a “sell” rating in a research report on Saturday, August 8th. Citigroup dropped their price objective on First Watch Restaurant Group from $20.00 to $19.00 and set a “buy” rating for the company in a research note on Wednesday, October 21st. Finally, DA Davidson cut their price objective on First Watch Restaurant Group from $17.00 to $15.00 and set a “buy” rating on the stock in a report on Friday, October 2nd. Two research analysts have rated the stock with a Strong Buy rating, eight have assigned a Buy rating and two have assigned a Hold rating to the company’s stock. Based on data from MarketBeat.com, First Watch Restaurant Group has a consensus rating of “Buy” and a consensus price target of $17.90.

About First Watch Restaurant Group

First Watch Restaurant Group, Inc operates a daytime-focused restaurant concept serving breakfast, brunch and lunch. Its restaurants offer made-to-order meals such as omelets, pancakes, French toast, sandwiches, salads and bowls, along with fresh juices, coffee and other beverages. The company generally does not serve dinner, positioning its restaurants around the daytime dining occasion.

First Watch restaurants emphasize fresh preparation and seasonal menu offerings, including items made with eggs, fruits, vegetables and other ingredients prepared in the restaurant.