First Watch Restaurant Group reported first‑quarter 2026 results on May 5 2026, delivering total revenue of $330.96 million—a 17.3% year‑over‑year increase from $282.24 million. The company posted a net loss of $2.69 million, compared with a $0.8 million loss in the same quarter a year earlier, and an earnings‑per‑share loss of $0.04 versus analyst estimates of a $0.02 or $0.03 loss. Same‑restaurant sales grew 2.8% on a comparable‑restaurant basis, while 16 new system‑wide restaurants opened, bringing the total to 648 units across 32 states.
The adjusted EBITDA for the quarter rose to $27.8 million, up from $22.8 million a year earlier, and the restaurant‑level operating profit margin improved to 18.5% from 16.5% in 2025. The margin expansion reflects stronger pricing and menu mix at individual locations, offsetting higher corporate expenses such as general and administrative costs, depreciation, and interest. The company’s operating income margin, however, slipped to 0.3% from 0.4% year‑over‑year, indicating that corporate‑level cost increases are weighing on overall profitability.
Management reiterated its 2026 outlook, raising the lower end of the adjusted EBITDA guidance to $133 million–$140 million from a previous $132 million–$140 million range. The company also reaffirmed same‑restaurant sales growth of 1%–3% and total revenue growth of 12%–14%, and projected 59–63 net new system‑wide restaurants for the year. Capital expenditures were guided at $150 million–$160 million, reflecting continued investment in expansion and digital marketing initiatives.
"I am proud of our teams for delivering solid results, exemplified by Same Restaurant Sales growth of 2.8% and expanded restaurant‑level operating profit versus a year ago," said CEO Chris Tomasso. CFO Mel Hope added, "Same‑restaurant traffic growth was negative 2%, with weather negatively affecting the quarter by around 100 basis points in addition to our customary planned sales transfer." Tomasso also noted, "We expanded the rollout of our digital marketing campaign to approximately 75% of our restaurant base, up from roughly 1/3 in 2025."
Investors reacted to the EPS miss, but the revenue beat and margin improvement helped temper the initial negative sentiment. The company’s guidance, particularly the raised lower end of the adjusted EBITDA range, signals management confidence in sustaining growth despite ongoing commodity and labor cost pressures. The market’s response underscores the importance of earnings quality and forward guidance in shaping investor perception.
First Watch’s results highlight the trade‑off between aggressive expansion and profitability. While new restaurant openings and digital marketing expansion drive top‑line growth, the widening net loss and negative same‑restaurant traffic growth point to short‑term challenges. The company’s focus on improving unit economics—evidenced by the restaurant‑level margin increase—and its commitment to a robust 2026 outlook suggest that management believes the expansion strategy will ultimately strengthen the business’s competitive position in the casual dining sector.
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