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

Financial Performance - First Watch's same restaurant traffic and sales have sequentially increased for the fourth consecutive quarter [3] - Restaurant level operating profit margin improved to 197% compared to 189% [3] - The company anticipates an average pricing increase of around 35% for the year, aligning with the typical 2% to 4% range to cover annual inflation [8] Consumer Behavior - First Watch experienced same restaurant traffic growth of 26% for the quarter [4] - Consumers are not exhibiting check management, and the company observed a positive mix for the quarter [4][5] - The company appeals to a higher income demographic, which has helped insulate it from some of the struggles faced by other demographics [5] Pricing Strategy - The company initially chose not to implement pricing to cover what it considered transitory commodity inflation of around 8% at the beginning of the year [7][8] - A menu price increase of around 5% in late August did not deter restaurant sales growth, which remained at 4% [6] Labor and Expansion - The company has not seen any impact from layoffs or a lower willingness to spend in the areas where its restaurants are located [9][10] - First Watch opened 21 new restaurants in 14 states during the quarter and has been able to staff them effectively [10]