First Watch Restaurant Group (NASDAQ:FWRG) Releases Quarterly Earnings Results, Misses Estimates By $0.02 EPS

Key Points

• First Watch reported Q1 EPS of ($0.04), missing estimates by $0.02, but revenue rose 17.3% to $331M and adjusted EBITDA increased 22.2% to $27.8M as management raised the low end of FY26 adjusted EBITDA guidance to $133–140M.
• Management expanded digital marketing to ~75% of the system with early positive ROI and rolled out a new core and extended seasonal menu that is improving mix and check growth, but same-restaurant traffic declined 2% and the company posted a net loss of $2.7M amid expected commodity and labor inflation.
• Shares traded up to $12.66 on the news, insiders have been net sellers (CEO sold ~25k shares), and analysts remain mostly positive with an average price target around $19.58 despite several recent target cuts.

First Watch Restaurant Group (NASDAQ:FWRG - Get Free Report) issued its earnings results on Tuesday. The company reported ($0.04) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.02) by ($0.02), Briefing.com reports. First Watch Restaurant Group had a net margin of 1.59% and a return on equity of 3.20%. During the same quarter last year, the firm posted ($0.01) earnings per share. The company's quarterly revenue was up 17.3% on a year-over-year basis.

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

• First Watch reported solid Q1 results — $331M revenue (+17.3%), same-restaurant sales +2.8%, restaurant-level operating margin 18.5% (↑200 bps) and adjusted EBITDA +22.2% to $27.8M — and reiterated FY26 same-store (1–3%) and revenue (12–14%) guidance while raising the low end of adjusted EBITDA to $133–140M; system count is 648 restaurants after 16 openings.
• Management expanded digital marketing to ~75% of the base, says early analytics show a positive ROI (driving new and lapsed customers, higher engagement and brand awareness), and pulled several million of marketing spend into Q2 to accelerate read‑throughs.
• The system-wide rollout of the new core menu (late February) plus an extended 20-week seasonal menu is improving mix toward higher‑margin items, raising attachment rates and driving per‑person check growth incremental to carried pricing.
• Same-restaurant traffic declined 2% (weather accounted for ~100 bps) and the company reported a net loss of $2.7M; management still expects full‑year commodity inflation of 1–3% and labor inflation of 3–5%, and pulling marketing forward may raise near‑term G&A volatility.

First Watch Restaurant Group Stock Performance

FWRG stock traded up $0.45 on Tuesday, hitting $12.66. The company's stock had a trading volume of 109,750 shares, compared to its average volume of 1,649,268. The firm has a 50 day moving average of $12.19 and a two-hundred day moving average of $15.12. First Watch Restaurant Group has a 1 year low of $10.09 and a 1 year high of $19.53. The stock has a market cap of $780.17 million, a price-to-earnings ratio of 40.66, a price-to-earnings-growth ratio of 3.53 and a beta of 1.11. The company has a current ratio of 0.29, a quick ratio of 0.25 and a debt-to-equity ratio of 0.43.

Wall Street Analysts Forecast Growth

FWRG has been the subject of several research analyst reports. Benchmark lowered their target price 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. Citigroup lowered their target price on shares of First Watch Restaurant Group from $26.00 to $21.00 and set a "buy" rating for the company in a report on Wednesday, February 25th. Zacks Research upgraded shares of First Watch Restaurant Group from a "strong sell" rating to a "hold" rating in a report on Tuesday, February 10th. Barclays lowered their target price on shares of First Watch Restaurant Group from $19.00 to $17.00 and set an "overweight" rating for the company in a report on Wednesday, February 25th. Finally, TD Cowen lowered their target price on shares of First Watch Restaurant Group from $21.00 to $18.00 and set a "buy" rating for the company in a report on Tuesday, February 24th. One investment analyst has rated the stock with a Strong Buy rating, ten have issued a Buy rating, one has assigned a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, First Watch Restaurant Group presently has an average rating of "Moderate Buy" and an average price target of $19.58.

Insider Transactions at First Watch Restaurant Group

In related news, CEO Christopher Anthony Tomasso sold 25,062 shares of the company's stock in a transaction on Tuesday, March 17th. The shares were sold at an average price of $12.52, for a total value of $313,776.24. Following the completion of the sale, the chief executive officer owned 957,315 shares in the company, valued at $11,985,583.80. This represents a 2.55% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO H Melville Hope III sold 3,878 shares of the company's stock in a transaction on Tuesday, March 17th. The shares were sold at an average price of $12.52, for a total transaction of $48,552.56. Following the completion of the sale, the chief financial officer owned 111,787 shares of the company's stock, valued at approximately $1,399,573.24. This trade represents a 3.35% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 68,013 shares of company stock worth $853,606 over the last 90 days. Company insiders own 6.10% of the company's stock.

Institutional Trading of First Watch Restaurant Group

Several institutional investors and hedge funds have recently bought and sold shares of the business. Invesco Ltd. raised its position in First Watch Restaurant Group by 31.7% in the 4th quarter. Invesco Ltd. now owns 89,637 shares of the company's stock valued at $1,352,000 after purchasing an additional 21,576 shares during the last quarter. XTX Topco Ltd acquired a new stake in shares of First Watch Restaurant Group in the 4th quarter worth $1,156,000. VARCOV Co. acquired a new stake in shares of First Watch Restaurant Group in the 4th quarter worth $1,128,000. Twinbeech Capital LP purchased a new stake in shares of First Watch Restaurant Group in the fourth quarter valued at about $205,000. Finally, Oxford Asset Management LLP purchased a new stake in shares of First Watch Restaurant Group in the fourth quarter valued at about $249,000. 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.

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