First Watch Restaurant Group (NASDAQ:FWRG) Posts Earnings Results, Misses Expectations By $0.01 EPS

Key Points

• First Watch’s second-quarter revenue increased 15.2% to $354.7 million, exceeding estimates of $351.6 million, while EPS of $0.04 fell short of expectations by $0.01. Same-restaurant sales grew 3.4%, with traffic turning positive in June.
• The company opened 18 restaurants and reported strong performance from its 2025 and 2026 openings, supported by a pipeline of more than 100 projects and long-term potential for roughly 2,200 U.S. locations.
• Higher food costs pressured profitability, prompting First Watch to reduce 2026 adjusted EBITDA guidance to $133 million-$136 million. Management plans to moderate expansion beginning in 2027 to prioritize self-funded growth, stronger finances, and positive free cash flow.

First Watch Restaurant Group (NASDAQ:FWRG - Get Free Report) posted its quarterly earnings data on Tuesday. The company reported $0.04 EPS for the quarter, missing the consensus estimate of $0.05 by ($0.01), FiscalAI reports. The firm had revenue of $354.67 million during the quarter, compared to analyst estimates of $351.57 million. First Watch Restaurant Group had a net margin of 1.38% and a return on equity of 2.85%. The firm's revenue for the quarter was up 15.2% compared to the same quarter last year. During the same period in the prior year, the company posted $0.03 earnings per share.

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

• Second-quarter revenue rose 15.2% to $354.7 million, driven by 3.4% same-restaurant sales growth and continued contributions from new locations. Same-restaurant traffic was nearly flat but improved 160 basis points sequentially, turning positive in June.
• Marketing investments, menu innovation, and seasonal offerings are generating traction. Unaided brand awareness increased more than 50% since early 2025, while 17% of customers acquired through targeted campaigns have already returned for a second visit.
• First Watch opened 18 restaurants in the quarter and said its 2025 and 2026 new-restaurant classes are outperforming both existing units and underwriting targets. The company maintains a pipeline of more than 100 projects and expects to reach approximately 2,200 potential U.S. locations over time.
• Strong demand for premium beef offerings increased food costs by nearly 100 basis points year over year and led management to lower 2026 adjusted EBITDA guidance to $133 million-$136 million. The company expects the margin pressure to moderate after the current limited-time offering ends.
• Beginning in 2027, First Watch will target about 50 company-operated openings annually instead of maintaining a higher unit-growth rate, prioritizing self-funded expansion, balance-sheet strengthening, and positive free cash flow. Updated long-term targets call for 2%-4% same-restaurant sales growth, 10%-13% revenue growth, and 11%-14% adjusted EBITDA growth.

First Watch Restaurant Group Trading Down 1.4%

FWRG opened at $12.33 on Tuesday. First Watch Restaurant Group has a one year low of $9.97 and a one year high of $19.53. The stock has a market capitalization of $760.02 million, a PE ratio of 44.25, a P/E/G ratio of 7.61 and a beta of 1.03. The business's 50 day moving average price is $12.03 and its 200 day moving average price is $12.86. The company has a debt-to-equity ratio of 0.43, a quick ratio of 0.25 and a current ratio of 0.29.

Analysts Set New Price Targets

FWRG has been the subject of a number of recent research reports. Stifel Nicolaus set a $14.00 target price on shares of First Watch Restaurant Group in a research report on Tuesday, May 5th. Benchmark cut their price objective on shares of First Watch Restaurant Group from $24.00 to $22.00 and set a "buy" rating for the company in a report on Monday, April 20th. Weiss Ratings lowered shares of First Watch Restaurant Group from a "sell (d+)" rating to a "sell (d)" rating in a research note on Monday, May 11th. DA Davidson restated a "buy" rating and issued a $17.00 price target on shares of First Watch Restaurant Group in a research report on Tuesday, April 28th. Finally, Stephens restated an "overweight" rating and issued a $21.00 target price on shares of First Watch Restaurant Group in a report on Wednesday, May 6th. One equities research analyst has rated the stock with a Strong Buy rating, eight have given a Buy rating, one has issued a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus target price of $18.78.

Institutional Investors Weigh In On First Watch Restaurant Group

A number of institutional investors and hedge funds have recently added to or reduced their stakes in FWRG. State of Wyoming purchased a new position in shares of First Watch Restaurant Group during the 4th quarter worth $64,000. Kemnay Advisory Services Inc. purchased a new position in First Watch Restaurant Group during the fourth quarter worth about $66,000. BNP Paribas Financial Markets boosted its stake in First Watch Restaurant Group by 61.9% during the second quarter. BNP Paribas Financial Markets now owns 4,375 shares of the company's stock worth $70,000 after buying an additional 1,673 shares during the period. Northwestern Mutual Wealth Management Co. increased its position in shares of First Watch Restaurant Group by 17,042.4% during the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 5,657 shares of the company's stock valued at $85,000 after acquiring an additional 5,624 shares during the last quarter. Finally, Kestra Advisory Services LLC acquired a new stake in shares of First Watch Restaurant Group during the fourth quarter valued at about $111,000. Hedge funds and other institutional investors own 96.11% of the company's stock.

First Watch Restaurant Group Company Profile

First Watch Restaurant Group, Inc NASDAQ: FWRG operates a specialty daytime dining concept focused on breakfast, brunch and lunch. The company's casual, full-service cafés emphasize fresh ingredients, made-to-order entrées and a seasonally driven menu that ranges from omelets and Benedicts to salads, skillets and afternoon sandwiches. First Watch positions itself as a daytime-only destination, with most locations opening early morning and closing by mid-afternoon.

Founded in 1983 by Ken Pendery and John Sullivan in Pacific Grove, California, First Watch began as a single café and gradually expanded through company-owned and select franchised locations.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source