First Watch Restaurant Group Fourth Quarter Report

by Warren Seah

In the latest financial report, First Watch Restaurant Group announced a significant turnaround, shifting to a profit in the fourth quarter. The breakfast, brunch, and lunch chain experienced a notable sales increase of 31% while effectively lowering costs.

Financial Results

The Bradenton, Fla.-based restaurant group reported earnings of $2.7 million, or 4 cents per share, in comparison to a loss of $486,000, or 1 cent per share, in the previous year. Analysts had anticipated earnings of 4 cents per share, making this a positive outcome for the company.

Sales also saw a substantial growth, reaching $244.6 million from $185.8 million in the prior year. This surpassed analyst expectations of $237.2 million.

Factors Driving Growth

First Watch attributed its sales boost to a combination of price increases, revenue from newly acquired restaurants, and the presence of an additional week in the fiscal year. Despite experiencing a 1.3% decrease in traffic, same-store sales managed to grow by 5% during the fourth quarter.

Future Projections

Looking ahead, First Watch anticipates continued growth for the year ending Dec. 29. The company projects a revenue increase of 18% to 20% from the previous year’s $891.6 million. Additionally, same-restaurant sales are forecasted to grow between 1% and 3%, as First Watch plans to expand its footprint by adding 51 to 57 new locations.

Expansion Progress

As of 2023, First Watch has a total of 524 restaurants, which includes 99 franchise-owned locations. This expansion aligns with the company’s strategic plans and signifies a positive trajectory for future growth.

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