First Watch Restaurant Group (FWRG) Q1 2025 earnings summary

Executive summary

• Total revenues grew 16.4% year-over-year to $282.2 million in Q1 2025, with system-wide sales up 11.5% to $323.0 million and 13 new system-wide openings, bringing the total to 584 locations across 30 states.

• Net loss of $0.8 million, or $(0.01) per diluted share, compared to net income of $7.2 million, or $0.12 per share, in Q1 2024.

• Adjusted EBITDA decreased to $22.8 million from $28.6 million year-over-year.

• Sequential improvement in same restaurant traffic, with April posting the best monthly result in over two years.

• Strategic marketing campaigns and operational efficiencies contributed to improved traffic and customer engagement.

Financial highlights

• Restaurant sales grew 16.8% to $279.6 million; franchise revenues declined 15.7% to $2.6 million.

• Same-restaurant sales grew 0.7%; same-restaurant traffic declined 0.7%.

• Restaurant-level operating profit margin was 16.5%, down from 20.8% last year.

• Adjusted EBITDA margin was 8.1%, down from 11.8% in Q1 2024.

• Income from operations margin dropped to 0.4% from 5.1% in Q1 2024; net loss margin was (0.3)% versus 3.0% prior year.

Outlook and guidance

• Fiscal 2025 Adjusted EBITDA expected between $114.0 million and $119.0 million, reflecting cost pressures and Q1 underperformance.

• Total revenue growth projected at approximately 20% for the year.

• Same-restaurant sales growth anticipated in the positive low-single digits, with flat to slightly positive traffic.

• Plans for 59 to 64 new system-wide restaurants (net of closures) and $150-$160 million in capital expenditures, excluding franchise acquisitions.

• Commodity inflation expected in the high single digits, peaking in Q2, with tariffs projected to increase food and beverage costs by 0.1% and supplies by 0.2% of sales for 2025.