First Watch Restaurant Group, Inc.

Second-quarter revenue increased 15.2% to $354.7 million. Same-restaurant sales grew 3.4%, while same-restaurant traffic was negative 0.4% and restaurant-level operating profit margin improved to 18.8%. Food and beverage expense was 23.5% of sales, down 10 basis points year over year, labor and other related expenses were 32.9% of sales, and adjusted EBITDA increased 13.5% to $34.5 million, or 9.7% margin; net income was $2.3 million. For 2026, management raised same-restaurant sales growth to 1.5% to 3%, revenue growth to 12.5% to 14%, adjusted EBITDA to $133 million to $136 million, and lowered capex guidance to $145 million to $150 million. They now expect 60 to 62 net new system-wide restaurants and said Q3 same-store sales should still be positive but likely at or below the low end of the full-year range.

Chris Tomasso framed the quarter as evidence that marketing, menu changes and unit growth are all working together, saying the company is seeing improved traffic, stronger awareness and positive responses to the new core menu and seasonal LTOs. He emphasized that the brand is still early in building awareness, but that First Watch has a large long-term runway, a robust pipeline and a clear position as the leader in daytime dining. His tone was confident and strategic, with a clear focus on balancing growth with long-term relevance and capital discipline.

Ashlee Weisser highlighted the company’s financial strength, pointing to $354.7 million of revenue, 18.8% restaurant-level operating margin, $34.5 million of adjusted EBITDA and $2.3 million of net income. She said food and beverage cost was 23.5% of sales, helped by 3.7% carried pricing and 1.6% commodity deflation, but offset by heavier-than-expected beef mix from premium LTOs; labor and other related expenses improved to 32.9% of sales, aided by staffing changes and sales leverage despite 4.1% wage inflation. She also noted G&A was $38.7 million, marketing is running around 2% of revenue, Q3 G&A should be about $1 million below Q2, and capex guidance was reduced to $145 million to $150 million.

Analysts focused on the Q3 traffic outlook, the beef-related cost pressure, and how much marketing is actually driving traffic. Management said it still expects positive same-store sales in every quarter, including the tougher Q3 comparison, but would not separate out the exact traffic contribution from marketing or sales transfer; they did say traffic would have been positive excluding sales transfer. On costs, management said the beef headwind should moderate as the current LTO ends, and explained that the temporary mix impact was larger than planned because demand for the beef items outperformed test results. They also said influencer and organic social are becoming a bigger part of the paid media mix and should continue growing.