First Watch Restaurant Group (NASDAQ:FWRG – Get Free Report) posted its quarterly earnings results on Tuesday. The company reported $0.08 EPS for the quarter, topping analysts’ consensus estimates of $0.03 by $0.05, Zacks reports. First Watch Restaurant Group had a return on equity of 3.12% and a net margin of 1.45%. The company had revenue of $349.86 million for the quarter, compared to analysts’ expectations of $348.99 million. During the same period in the previous year, the firm earned $0.05 EPS. The firm’s revenue was up 10.7% compared to the same quarter last year.
Here are the key takeaways from First Watch Restaurant Group’s conference call:
- Third-quarter revenue increased 10.7% to $349.9 million, supported by 1.0% same-restaurant sales growth and contributions from 147 non-comparable restaurants. Same-restaurant traffic declined 1.9%, but the company highlighted an 8.1% two-year sales increase and 0.8% two-year traffic increase.
- Adjusted EBITDA rose 17% to $39.7 million, with margin expanding to 11.4% from 10.8% a year ago. G&A leverage improved by 60 basis points, although restaurant-level operating margin declined 30 basis points to 19.4% due to higher food and controllable costs.
- Management raised its full-year outlook for Adjusted EBITDA to approximately $136 million, at the high end of its previous range, and now expects revenue growth of about 13.5%. Full-year commodity inflation is expected to be roughly flat, while capital expenditures were reduced to approximately $145 million.
- First Watch opened 16 restaurants in the quarter and 53 year to date, and remains on track for approximately 60 net new systemwide restaurants in 2026 and 55 openings in 2027. Recent restaurant classes are exceeding sales and return targets, supporting continued confidence in the brand’s expansion opportunity.
- Management plans to preserve flexibility around unit growth beyond 2027 because of higher interest rates and floating-rate borrowing exposure, while raising its long-term Adjusted EBITDA growth target through 2028 to more than 15%. The company is also testing TikTok GO and local linear television to broaden awareness and generate traffic, but these initiatives remain early-stage.
First Watch Restaurant Group Stock Performance
Shares of FWRG traded down $0.56 during trading hours on Thursday, hitting $12.95. The stock had a trading volume of 661,234 shares, compared to its average volume of 1,485,602. The company has a debt-to-equity ratio of 0.44, a quick ratio of 0.22 and a current ratio of 0.27. The firm has a 50-day moving average price of $11.39 and a 200 day moving average price of $12.42. First Watch Restaurant Group has a fifty-two week low of $9.88 and a fifty-two week high of $18.77. The firm has a market capitalization of $798.84 million, a price-to-earnings ratio of 40.35, a PEG ratio of 61.56 and a beta of 1.00.
Analysts Set New Price Targets
FWRG has been the subject of a number of recent research reports. Weiss Ratings upgraded First Watch Restaurant Group from a “sell (d+)” rating to a “hold (c-)” rating in a report on Thursday, October 29th. Wall Street Zen raised First Watch Restaurant Group from a “strong sell” rating to a “sell” rating in a research report on Saturday, August 8th. Citigroup decreased their price target on shares of First Watch Restaurant Group from $20.00 to $19.00 and set a “buy” rating for the company in a report on Wednesday, October 21st. Stephens reiterated an “overweight” rating and issued a $18.00 price target on shares of First Watch Restaurant Group in a report on Wednesday. Finally, Raymond James Financial decreased their target price on shares of First Watch Restaurant Group from $20.00 to $18.00 and set a “strong-buy” rating for the company in a research report on Friday, October 16th. Two research analysts have rated the stock with a Strong Buy rating, eight have given a Buy rating and two have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, First Watch Restaurant Group currently has an average rating of “Buy” and a consensus price target of $17.90.
Check Out Our Latest Stock Report on FWRG
About First Watch Restaurant Group
First Watch Restaurant Group, Inc operates a daytime-focused restaurant concept serving breakfast, brunch and lunch. Its restaurants offer made-to-order meals such as omelets, pancakes, French toast, sandwiches, salads and bowls, along with fresh juices, coffee and other beverages. The company generally does not serve dinner, positioning its restaurants around the daytime dining occasion.
First Watch restaurants emphasize fresh preparation and seasonal menu offerings, including items made with eggs, fruits, vegetables and other ingredients prepared in the restaurant.
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