First Watch Restaurant (US:FWRG)2024-03-05 16:02Financial Data and Key Metrics Changes - In 2023, total revenues grew by 22% compared to 2022, and more than 100% compared to 2019, with systemwide sales surpassing $1 billion and adjusted EBITDA nearing $100 million [66][67] - Fourth quarter revenues reached $244.6 million, a 32% increase year-over-year, driven by 5% same-restaurant sales growth and the opening of 37 new restaurants [80][81] - Restaurant-level operating profit margin improved to 19.4% in the fourth quarter, up from 16.7% in the same period last year [84] Business Line Data and Key Metrics Changes - The company opened 51 systemwide restaurants in 2023, including 23 franchise conversions to company-owned, resulting in a total of 524 restaurants by year-end, an 11% increase from the previous year [65][66] - Same-restaurant sales grew by 7.6% for the year, with positive traffic recorded [66][67] Market Data and Key Metrics Changes - The company is expanding into new markets, specifically Las Vegas and New England, with significant long-term unit potential identified in these areas [71][78] - The company has completed the rollout of pay-at-the-table technology, enhancing customer experience and operational efficiency [72][73] Company Strategy and Development Direction - The company aims for low double-digit unit growth, targeting 2,200 domestic restaurants in the long term, leveraging its first-mover advantage in daytime dining [70][71] - The focus remains on maintaining operational excellence and enhancing customer experience through technology and strategic growth initiatives [76][78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth prospects despite a slow start to 2024 due to harsh weather and tough comparisons from the previous year [92][95] - The company anticipates total revenue growth of 18% to 20% in 2024, with same-restaurant sales growth expected between 1% to 3% [89][90] Other Important Information - The company reported a decline in same-restaurant traffic of 1.3% in the fourth quarter, attributed to a decrease in off-premises traffic, while dining room traffic showed improvement [82][84] - Adjusted EBITDA for the fourth quarter was $24.6 million, reflecting a margin of 10.1%, an increase from the previous year [87] Q&A Session Summary Question: Can you provide context on key metrics and labor efficiencies? - Management highlighted improvements in labor scheduling and turnover metrics, with management turnover dropping below 40% [99][110] Question: What is the current mix and strategy for the alcohol initiative? - The alcohol mix is between 5% and 6%, with plans to further innovate and optimize this platform [103][104] Question: How does the pay-at-the-table technology impact operations? - The technology is designed to reduce friction for both customers and employees, improving overall experience and potentially leading to repeat visits [123]