First Watch Restaurant (FWRG) - 2025 Q1 - Quarterly Results

Financial & Operational Highlights In Q1 2025, First Watch achieved a 16.4% increase in total revenues to $282.2 million, though profitability declined with a net loss of $(0.8) million and Adjusted EBITDA decreasing to $22.8 million Q1 2025 Key Financial Metrics (vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $282.2M | $242.4M | +16.4% | | System-wide Sales | $323.0M | $289.6M | +11.5% | | Same-Restaurant Sales Growth | 0.7% | N/A | - | | Same-Restaurant Traffic Growth | -0.7% | N/A | - | | Income from Operations Margin | 0.4% | 5.1% | -4.7 p.p. | | Restaurant Level Operating Profit Margin* | 16.5% | 20.8% | -4.3 p.p. | | Net (Loss) Income | $(0.8)M | $7.2M | -111.1% | | Diluted EPS | $(0.01) | $0.12 | -108.3% | | Adjusted EBITDA* | $22.8M | $28.6M | -20.3% | - The company opened 13 new system-wide restaurants and had 1 closure, bringing the total to 584 restaurants (498 company-owned, 86 franchise-owned) across 30 states[6] - CEO Chris Tomasso noted that Q1 same-restaurant traffic results were encouraging and continued positive trends from late 2024, with new restaurant openings in 2024 and 2025 exceeding expectations[3] Fiscal Year 2025 Outlook The company updated its full-year 2025 guidance, projecting total revenue growth of approximately 20% and an Adjusted EBITDA between $114.0 million and $119.0 million, alongside plans to open 59 to 64 new system-wide restaurants Updated Fiscal Year 2025 Guidance | Metric | Guidance Range/Value | | :--- | :--- | | Total Revenue Growth | ~20.0% (includes ~4% from acquisitions) | | Same-Restaurant Sales Growth | Positive low-single digits | | Same-Restaurant Traffic Growth | Flat-to-slightly positive | | Adjusted EBITDA | $114.0M - $119.0M | | New System-Wide Restaurants | 59 to 64 (net of 3 closures) | | Capital Expenditures | $150.0M - $160.0M | | Blended Tax Rate | 45.0% - 50.0% | Financial Statements and Reconciliations This section provides detailed financial statements and non-GAAP reconciliations, highlighting a year-over-year revenue increase but a decline into a net loss due to rising operating costs, and a decrease in key non-GAAP metrics Consolidated Statements of Operations and Comprehensive Income (Loss) For Q1 2025, total revenues grew to $282.2 million, but significant increases in operating expenses, particularly food and beverage and labor costs, led to a net loss of $(0.8) million, a stark contrast to the prior-year's net income Consolidated Statement of Operations Highlights (in thousands) | Account | Q1 2025 (ended Mar 30) | Q1 2024 (ended Mar 31) | | :--- | :--- | :--- | | Total Revenues | $282,240 | $242,449 | | Food and beverage costs | $66,647 | $52,184 | | Labor and other related expenses | $96,754 | $79,735 | | Total operating costs and expenses | $281,127 | $230,163 | | Income from operations | $1,113 | $12,286 | | Net (loss) income | $(829) | $7,214 | | Net (loss) income per share - diluted | $(0.01) | $0.12 | Non-GAAP Financial Measures Reconciliations This section details the reconciliation of GAAP measures to the company's preferred non-GAAP metrics, showing that Adjusted EBITDA for Q1 2025 was $22.8 million, down from $28.6 million, and Restaurant Level Operating Profit fell to $46.1 million from $49.9 million Reconciliation of Net (Loss) Income to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net (loss) income | $(829) | $7,214 | | Depreciation and amortization | 16,557 | 12,271 | | Interest expense | 3,334 | 2,599 | | Income tax (benefit) expense | (708) | 2,799 | | Other adjustments (Stock-based comp, etc.) | 4,399 | 3,382 | | Adjusted EBITDA | $22,753 | $28,590 | | Adjusted EBITDA margin | 8.1% | 11.8% | Reconciliation of Income from Operations to Restaurant Level Operating Profit (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Income from operations | $1,113 | $12,286 | | Less: Franchise revenues | (2,649) | (3,141) | | Add: General and administrative expenses | 30,219 | 27,658 | | Add: Depreciation and amortization | 16,557 | 12,271 | | Add: Other adjustments | 882 | 788 | | Restaurant level operating profit | $46,122 | $49,862 | | Restaurant level operating profit margin | 16.5% | 20.8% | Supplementary Information This section provides context for the financial report, including definitions of key operational and non-GAAP metrics, a standard forward-looking statements disclaimer outlining potential business risks, and a corporate overview describing First Watch's market position Definitions of Key Metrics The report defines key terms for clarity, including 'Same-restaurant sales growth' for year-over-year sales changes and non-GAAP measures like 'Adjusted EBITDA' and 'Restaurant level operating profit' which exclude specific corporate-level expenses - Same-restaurant sales growth: Defined as the percentage change in year-over-year sales for company-owned restaurants open for 18 months or longer, based on 383 restaurants for Q1 2025[13] - Adjusted EBITDA: A non-GAAP measure defined as net income (loss) before depreciation and amortization, interest expense, income taxes, and other items not considered part of ongoing core operating performance[15] - Restaurant level operating profit: A non-GAAP measure defined as restaurant sales less direct restaurant operating expenses (e.g., food, labor, occupancy), excluding corporate-level expenses[17] Forward-Looking Statements This section serves as a legal safe harbor, cautioning that the report's projections are subject to significant risks and uncertainties, including changes in consumer preferences, economic conditions, and operational challenges - The press release contains forward-looking statements that are not guarantees of future performance and are subject to risks and uncertainties[20] - Important risk factors include: changes in consumer preferences and economic conditions (inflation, recession), challenges in opening new restaurants, supply chain disruptions, competition, and labor shortages[20] About First Watch First Watch is a leading 'Daytime Dining' restaurant concept focused on made-to-order breakfast, brunch, and lunch, operating over 580 restaurants in 31 states and recognized for its fresh ingredients and workplace culture - First Watch is positioned as the leading Daytime Dining concept serving made-to-order breakfast, brunch, and lunch with fresh ingredients[19] - The company operates more than 580 restaurants in 31 states[19] - Recent awards include being named 2024's 1 Most Loved Workplace® in America by Newsweek and the top restaurant brand in Yelp's 2023 list of most-loved brands[19]