First Watch Restaurant Group (NASDAQ: FWRG) reported its Q4 2025 earnings for the thirteen weeks ended December 28, 2025, and the 52‑week fiscal year ended December 28, 2025. The company posted earnings per share of $0.24, a 200% surprise over the consensus estimate of $0.08, driven by disciplined cost management and a modest lift in same‑restaurant sales. Revenue reached $316.4 million, slightly below the $315.11 million consensus but essentially in line with the $316.3–$316.93 million range cited by analysts, reflecting a 20.2% year‑over‑year increase from $263.3 million in Q4 2024.
Same‑restaurant sales grew 3.1% to $94.5 million, while same‑restaurant traffic fell 1.9% to 2.9 million visits, indicating that pricing power helped offset a modest decline in footfall. Income from operations rose to $9.0 million, up from $3.9 million in Q4 2024, and the margin improved to 2.9% from 1.5%. Restaurant‑level operating profit margin expanded to 19.0% from 18.8%, and adjusted EBITDA climbed 38.7% to $33.7 million.
For the full year, revenue increased 20.3% to $1.2 billion, and system‑wide sales grew 16.1% to $1.4 billion. Same‑restaurant sales grew 3.6% and traffic grew 0.5%, but income from operations fell to $27.5 million, a margin of 2.3% versus 3.9% in 2024, reflecting higher commodity and labor costs. Adjusted EBITDA for the year rose to $120.9 million from $113.8 million.
Management highlighted that carried pricing of about 4% in the first half of the year, blending to roughly 2% for the full year, helped offset labor inflation. The company also opened 64 new system‑wide restaurants in 2025, a record, and plans to add 59–63 net new locations in 2026.
Looking ahead, First Watch guided for 2026 total revenue growth of 12%–14% and same‑restaurant sales growth of 1%–3%. Adjusted EBITDA guidance is $132 million–$140 million. The company cautioned that a cautious consumer environment and commodity inflation could temper growth, which explains the more conservative outlook compared to the robust 2025 performance.
The market reaction was tempered by the revenue miss and the cautious 2026 guidance, despite the strong EPS beat. Investors also noted the announced retirement of CFO Mel Hope later in the year, adding an element of uncertainty to the company’s financial leadership.
Overall, First Watch’s Q4 2025 results demonstrate solid operational efficiency and a strong earnings beat, but the slight revenue miss and conservative guidance signal management’s awareness of headwinds such as commodity inflation, labor costs, and a cautious consumer environment. The company’s continued expansion and pricing strategy suggest a focus on sustaining profitability while navigating a challenging macro backdrop.
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