First Watch Restaurant Group, Inc. — Q3 2026 Earnings Summary

Financial Performance:

• Total revenues increased 10.7% year-over-year to $349.9 million for the thirteen weeks ended September 27, 2026, compared to $316.0 million in the same period of 2025.
• Net income increased to $4.8 million ($0.08 per diluted share) from $3.0 million ($0.05 per diluted share) in the prior year period.
• Adjusted EBITDA increased to $39.7 million from $34.1 million in the prior year period.
• Adjusted EBITDA margin improved to 11.4% from 10.8% in the prior year period.
• Income from operations margin remained flat at 3.2% compared to 3.2% in the prior year period.
• Restaurant level operating profit margin decreased to 19.4% from 19.7% in the prior year period.
• System-wide sales increased 10.9% to $391.2 million from $352.7 million in the prior year period.
• Same-restaurant sales growth was 1.0%.
• Same-restaurant traffic growth was negative 1.9%.
• Food and beverage costs were $77.4 million compared to $69.7 million in the prior year period.
• Labor and other related expenses were $113.0 million compared to $102.4 million in the prior year period.
• Depreciation and amortization was $22.7 million compared to $19.7 million in the prior year period.
• Interest expense was $4.9 million compared to $4.6 million in the prior year period.
• Income tax expense was $1.7 million compared to $2.7 million in the prior year period.

Guidance and Future Outlook:

• The Company raised its full-year 2026 Adjusted EBITDA outlook to the high end of the previous guidance range.
• Updated fiscal year 2026 guidance (52 weeks ending December 27, 2026) includes:
  • Same-Restaurant Sales Growth of approximately 2.0%.
  • Total revenue growth of approximately 13.5%.
  • Adjusted EBITDA of approximately $136.0 million.
  • 60 net new System-wide restaurants (including 2 company-owned closures), comprising 53 new company-owned and 9 new franchise-owned restaurants.
  • Capital expenditures of approximately $145.0 million, invested primarily in new restaurant projects and planned remodels.
• The updated revenue growth and Adjusted EBITDA guidance figures include the net impact of approximately 1% in total revenue growth and approximately $2 million in Adjusted EBITDA associated with completed acquisitions.

Business Segments and Product Lines:

• Opened 16 new system-wide restaurants in 11 states during the quarter.
• Total system-wide restaurant count reached 681, consisting of 601 company-owned and 80 franchise-owned locations across 33 states.
• The Company serves breakfast, brunch, and lunch under its "Daytime Dining" concept.
• Franchise revenues were $3.1 million for the quarter.

Market and Competitive Landscape:

• First Watch is described as the leading Daytime Dining concept.
• The Company was voted #1 Best Breakfast by Newsweek's Readers' Choice Awards 2025.
• The Company was named the 2025 and 2024 #1 Most Loved Workplace® in America by the Best Practice Institute.
• The restaurant base is geographically concentrated in the southeast portion of the United States.

Risks and Challenges:

• Potential risks include vulnerability to changes in consumer preferences, economic conditions (inflation, recession), and food cost fluctuations.
• Risks related to the inability to successfully open new restaurants, manage growth, or compete effectively for customers.
• Potential negative impacts on sales from opening new restaurants in existing markets or declines in visitors to retail centers.
• Risks associated with franchisee performance, limited control over franchisee operations, and conflicts of interest.
• Vulnerability to food safety concerns, labor shortages, increased labor costs, and unionization activities.
• Risks related to supply chain disruptions, information technology failures, and regulatory compliance.
• Risks associated with geopolitical events (Russia/Ukraine war, Middle East unrest) and their impact on macroeconomic conditions.

Management Commentary and Tone:

• CEO Chris Tomasso described the third-quarter performance as "another encouraging proof point for the strength of First Watch."
• Management noted the team delivered on the top-line plan, grew same-restaurant sales against the "toughest comparison of the year," and increased total revenue by 10.7%.
• Management expressed confidence in raising the full-year 2026 Adjusted EBITDA outlook due to Adjusted EBITDA growth exceeding expectations.
• Management highlighted that teams continue to execute at a high level.

Other Key Points:

• A conference call and webcast regarding the results were hosted on November 3, 2026, at 8:00 AM ET by CEO Chris Tomasso and CFO Ashlee Weisser.
• The Company filed its quarterly report on Form 10-Q with the SEC on November 3, 2026.
• Strategic transition costs were $0.5 million for the quarter, compared to $0.7 million in the prior year period.
• Stock-based compensation, net of amounts capitalized, was $3.6 million for the quarter, compared to $2.9 million in the prior year period.
• Transaction and restructuring expenses, net, were $1.3 million for the quarter, compared to $0.4 million in the prior year period.
• Impairments and loss on disposal of assets were $0.2 million for the quarter, compared to $0.2 million in the prior year period.
• Deferred rent was $(0.3) million for the quarter, compared to $(0.1) million in the prior year period.