Breakfast restaurant chain First Watch Restaurant Group (NASDAQ:FWRG) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 16.4% year on year to $282.2 million. Its GAAP loss of $0.01 per share was significantly below analysts’ consensus estimates.
Is now the time to buy First Watch? Find out in our full research report.
-
Revenue: $282.2 million vs analyst estimates of $283.5 million (16.4% year-on-year growth, in line)
-
EPS (GAAP): -$0.01 vs analyst estimates of $0.03 (significant miss)
-
Adjusted EBITDA: $22.75 million vs analyst estimates of $25.81 million (8.1% margin, 11.9% miss)
-
EBITDA guidance for the full year is $116.5 million at the midpoint, below analyst estimates of $125 million
-
Operating Margin: 0.4%, down from 5.1% in the same quarter last year
-
Locations: 584 at quarter end, up from 531 in the same quarter last year
-
Same-Store Sales were flat year on year, in line with the same quarter last year
-
Market Capitalization: $1.13 billion
“First quarter same restaurant traffic results are encouraging and continued the trends we experienced exiting 2024, demonstrating both the strength and the resilience of the First Watch brand,” said Chris Tomasso, CEO and President of First Watch.
Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ:FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $1.06 billion in revenue over the past 12 months, First Watch is a mid-sized restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.
As you can see below, First Watch grew its sales at an exceptional 19.2% compounded annual growth rate over the last five years (we compare to 2019 to normalize for COVID-19 impacts) as it opened new restaurants and increased sales at existing, established dining locations.
This quarter, First Watch’s year-on-year revenue growth was 16.4%, and its $282.2 million of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 20% over the next 12 months, similar to its five-year rate. This projection is admirable and suggests the market is baking in success for its menu offerings.
