First Watch Restaurant Group, Inc. Provides Status of Company Restaurants Affected by Hurricane Milton

Rhea-AI Summary

First Watch Restaurant Group (NASDAQ: FWRG) provides an update on the impact of Hurricane Milton on its operations. From October 8-13, 2024, 85 Company-owned restaurants were closed for at least one day due to the hurricane. As of October 14th, 77 of these restaurants have reopened, with management assessing the reopening timeline for the remaining 8 affected locations.

Additionally, Hurricane Helene affected less than 10 Company-owned restaurants, with only one closed for more than three days. First Watch maintains comprehensive insurance coverage, including property, flood, and business interruption. The company is working with insurance providers to assess the overall impact, which is expected to take several weeks to complete.

Positive

• 77 out of 85 affected restaurants reopened within a week
• Comprehensive insurance coverage in place for property, flood, and business interruption

Negative

• 85 Company-owned restaurants closed for at least one day due to Hurricane Milton
• 8 restaurants still closed with uncertain reopening timeline
• Potential financial impact from hurricanes yet to be determined

Insights

Financial Analyst

Hurricane Milton's impact on First Watch Restaurant Group (FWRG) appears to be relatively contained. With 85 out of 462 company-owned restaurants affected, representing about 18% of their locations, the disruption is significant but not catastrophic. The quick reopening of 77 restaurants within a week demonstrates efficient crisis management.

The financial impact will likely be reflected in Q4 2024 earnings, potentially affecting revenue and same-store sales growth. However, the presence of comprehensive insurance coverage, including business interruption, should mitigate some of the financial losses. Investors should watch for:

• The duration of closures for the remaining 8 restaurants
• Any supply chain disruptions affecting food costs
• Insurance claim outcomes and their impact on Q4 financials

While short-term results may see a slight dip, FWRG's swift response and insurance coverage suggest minimal long-term impact on the company's financial health.

Risk Management Expert

First Watch's handling of Hurricane Milton demonstrates robust risk management practices. Key observations:

• Proactive closures prioritizing employee safety and storm preparation
• Rapid reopening of 90.6% of affected restaurants within a week
• Comprehensive insurance coverage including property, flood and business interruption

The company's preparedness and quick response likely minimized potential damages and financial losses. The ongoing assessment with insurance providers is a critical step in quantifying the impact. Investors should note that the full extent of coverage applicability may take several weeks to determine, which could introduce some short-term uncertainty.

The minimal impact from Hurricane Helene further underscores FWRG's ability to navigate multiple concurrent weather events effectively. This resilience in the face of natural disasters is a positive indicator for the company's operational risk management.

BRADENTON, Fla., Oct. 14, 2024 (GLOBE NEWSWIRE) -- First Watch Restaurant Group, Inc. (NASDAQ: FWRG) (“First Watch” or the “Company”) provides the following information regarding Hurricane Milton.

From October 8, 2024 through October 13, 2024, 85 Company-owned restaurants in Hurricane Milton’s path were closed at least one business day for employee safety, storm preparation, utility outage, damage assessment and re-stocking. By Monday, October 14^th, 77 of those restaurants had been reopened. Management is ascertaining the reopening timetable for the remaining 8 affected restaurants.

Chief Executive Officer and President, Chris Tomasso, said, “We are grateful that our team members and their families are safe in the aftermath of Milton and that we have been able to resume operations at nearly all of our restaurants.”

Separately, due to Hurricane Helene, less than 10 of First Watch’s Company-owned restaurants were closed for at least one business day and only one was closed for more than three days.

The Company maintains comprehensive insurance coverage on all of its restaurants, including property, flood and business interruption, and is currently working with its insurance providers to assess the overall impact from the storms. First Watch expects the assessment will take at least several weeks to complete and determine the extent, if any, to which the coverages apply.

About First Watch

First Watch is the leading Daytime Dining concept serving made-to-order breakfast, brunch and lunch using fresh ingredients. A recipient of hundreds of local “Best Breakfast” and “Best Brunch” accolades, First Watch's chef-driven menu rotates five times a year and includes elevated executions of classic favorites alongside specialties such as its Quinoa Power Bowl, Lemon Ricotta Pancakes, Chickichanga, Morning Meditation fresh juice and signature Million Dollar Bacon. After first appearing on the list in 2022 and 2023, First Watch was named 2024’s #1 Most Loved Workplace^® in America by Newsweek and the Best Practice Institute. In 2023, First Watch was named the top restaurant brand in Yelp’s inaugural list of the top 50 most-loved brands in the U.S. In 2022, First Watch was awarded a sought-after MenuMasters honor by Nation's Restaurant News for its seasonal Braised Short Rib Omelet. First Watch operates more than 535 First Watch restaurants in 29 states, including 125 in the state of Florida. For more information, visit www.firstwatch.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from the statements made herein. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our hurricane damage and insurance coverage assessments, financial position, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to any historical or current facts. These statements may include words such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “outlook,” “potential,” “project,” “projection,” “plan,” “seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other similar expressions. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed herein, in our Annual Report on Form 10-K as of and for the year ended December 31, 2023, including under Part I. Item 1A. “Risk Factors” and Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our other filings with the Securities and Exchange Commission (the “SEC”), accessible on the SEC’s website at www.sec.gov and the Investors Relations section of the Company’s website at https://investors.firstwatch.com/financial-information/sec-filings. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the following: uncertainty regarding the Russia and Ukraine war, Israel-Hamas war and the related impact on macroeconomic conditions, including inflation, as a result of such conflicts or other related events; our vulnerability to changes in economic conditions and consumer preferences; our inability to successfully open new restaurants or establish new markets; our inability to effectively manage our growth; potential negative impacts on sales at our and our franchisees’ restaurants as a result of our opening new restaurants; a decline in visitors to any of the retail centers, lifestyle centers, or entertainment centers where our restaurants are located; lower than expected same-restaurant sales growth; unsuccessful marketing programs and limited time new offerings; changes in the cost of food; unprofitability or closure of new restaurants or lower than previously experienced performance in existing restaurants; our inability to compete effectively for customers; unsuccessful financial performance of our franchisees; our limited control over our franchisees’ operations; our inability to maintain good relationships with our franchisees; conflicts of interest with our franchisees; the geographic concentration of our system-wide restaurant base in the southeast portion of the United States; damage to our reputation and negative publicity; our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media; our limited number of suppliers and distributors for several of our frequently used ingredients and shortages or disruptions in the supply or delivery of such ingredients; information technology system failures or breaches of our network security; our failure to comply with federal and state laws and regulations relating to privacy, data protection, advertising and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection, advertising and consumer protection; our potential liability with our gift cards under the property laws of some states; our failure to enforce and maintain our trademarks and protect our other intellectual property; litigation with respect to intellectual property assets; our dependence on our executive officers and certain other key employees; our inability to identify, hire, train and retain qualified individuals for our workforce; our failure to obtain or to properly verify the employment eligibility of our employees; our failure to maintain our corporate culture as we grow; unionization activities among our employees; employment and labor law proceedings; labor shortages or increased labor costs or health care costs; risks associated with leasing property subject to long-term and non-cancelable leases; risks related to our sale of alcoholic beverages; costly and complex compliance with federal, state and local laws; changes in accounting principles applicable to us; our vulnerability to natural disasters, unusual weather conditions, pandemic outbreaks, political events, war and terrorism; our inability to secure additional capital to support business growth; our level of indebtedness; failure to comply with covenants under our credit facility; and the interests of our largest stockholder may differ from those of public stockholders.

The forward-looking statements included in this press release are made only as of the date hereof and are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Investor Relations Contact

Steven L. Marotta
941-500-1918
investors@firstwatch.com

Media Relations Contact:

Jenni Glester
407-864-5823
jglester@firstwatch.com

FAQ

How many First Watch restaurants were affected by Hurricane Milton?

85 Company-owned First Watch restaurants were affected by Hurricane Milton, closing for at least one business day from October 8-13, 2024.

How many First Watch restaurants have reopened after Hurricane Milton?

As of October 14, 2024, 77 out of the 85 affected First Watch restaurants have reopened following Hurricane Milton.

What type of insurance coverage does First Watch (FWRG) have for hurricane damage?

First Watch maintains comprehensive insurance coverage on all its restaurants, including property, flood, and business interruption insurance.

How long will it take First Watch to assess the impact of the hurricanes?

First Watch expects the assessment of the hurricanes' impact to take at least several weeks to complete and determine the extent of insurance coverage applicability.