Higher inflation costs have subsided leading to margin improvement: First Watch CEO Chris Tomasso

Core Insights - The company has experienced sequential growth in same restaurant traffic and sales for four consecutive quarters, with a 2.6% increase in traffic for the latest quarter [4][3] - The restaurant level operating profit margin improved to 19.7%, up from 18.9%, indicating effective management of commodity costs [3] - Despite a 5% price increase implemented in late August, restaurant sales still grew by 4%, suggesting that consumers are not reducing their spending significantly [6][7] Consumer Behavior - The company targets a higher income demographic, which has helped mitigate the impact of economic pressures on consumer spending [5] - There has been no observed change in consumer behavior regarding check sizes or spending patterns, indicating resilience among its customer base [4][7] - The company has maintained a conservative pricing strategy, averaging a 3.5% price increase for the year, aligning with typical inflation rates [8] Labor and Market Conditions - The company has successfully opened 21 new restaurants across 14 states without significant labor issues, indicating a stable staffing situation [10] - There has been no noticeable impact from broader economic challenges, such as layoffs or government shutdowns, on consumer behavior in the markets where the company operates [10][11]