First Watch Revenue Rises 10.7% to $349.9 Million in Third Quarter
Key Facts
First Watch Restaurant Group reported a 10.7% year-over-year increase in revenue to $349.9 million in the third quarter of 2026, compared with $316.0 million in the same period of 2025. Net income rose to $4.8 million, or $0.08 per diluted share, from $3.0 million, or $0.05 per share, a year earlier. The company reported the results on November 3 and said comparable restaurant sales grew 1.0% during the quarter. But customer traffic at those restaurants fell 1.9%, showing a divergence between sales growth and a decline in visits. Adjusted EBITDA rose to $39.7 million from $34.1 million a year earlier.
Chief Executive Chris Tomasso said adjusted EBITDA growth exceeded management's expectations. He added: "Our teams continue to execute at a high level, delivering adjusted EBITDA growth above our expectations." The company linked the performance to its decision to raise its annual forecast, after comparable restaurant sales grew despite what Tomasso described as the toughest year-over-year comparison the company faced during the year. That puts the performance of existing restaurants alongside growth in total revenue, which increased at a faster pace than comparable restaurant sales in the quarter. The company did not disclose in the information available here how much new and existing restaurants each contributed to the overall revenue increase.
First Watch raised its fiscal 2026 adjusted EBITDA forecast to about $136.0 million, the top of the range it announced after its second-quarter results. The previous range was $133.0 million to $136.0 million. The company kept its total revenue growth forecast at about 13.5% and set comparable restaurant sales growth at about 2.0% for the fiscal year. Its previous guidance had projected revenue growth of 12.5% to 14.0%. The new adjusted EBITDA forecast puts the annual figure at the top of the previous range, while expected revenue growth remains within the range it had previously announced.
The chain expanded during the quarter, opening 16 restaurants in 11 states and bringing its total to 681 restaurants in 33 states. The total included 601 company-owned restaurants and 80 franchisee-owned restaurants. The company expected to add 60 net restaurants to its network during fiscal 2026, including the planned closure of two company-owned restaurants. It also estimated capital expenditures of about $145.0 million. These figures provide a picture of its announced expansion and investment plans alongside its annual revenue and earnings growth targets.
In the second quarter of 2026, comparable restaurant sales grew 3.4%, and revenue rose 15.2% year over year to $354.7 million, while net income was $2.3 million. In the third quarter, revenue was $349.9 million, up 10.7% year over year, and net income was $4.8 million. These results place the two quarters in sequence, with different year-over-year comparisons for each period. The 15.2% revenue growth the company reported for the second quarter was year over year, not a change from the previous quarter. First Watch shares, trading under the ticker FWRG, closed at $12.95 on November 2, before the results were announced.
The company had scheduled its third-quarter results conference call for November 3, 2026, at 8:00 a.m. Eastern time. The revised fiscal-year guidance included expected comparable restaurant sales growth of about 2.0% and revenue growth of about 13.5%. It also put adjusted EBITDA at about $136.0 million. Alongside these targets, the annual plan includes 60 net restaurant additions, the closure of two company-owned restaurants and capital expenditures of about $145.0 million. These figures remain the company's forecasts for fiscal 2026, alongside the third-quarter results it reported on November 3.