First Watch Restaurant Group, Inc. Reports 2024 Financial Results and Provides Outlook for 2025
First Watch Restaurant Group (NASDAQ: FWRG) reported its 2024 financial results, marking a pivotal year with total revenues exceeding $1.0 billion, up 13.9% year-over-year, and system-wide sales reaching $1.2 billion, up 7.4%.
Key financial metrics include:
- Net income of $18.9 million
- Adjusted EBITDA of $113.8 million
- Income from operations margin of 3.9%
- Restaurant level operating profit margin of 20.1%
The company expanded its footprint with 50 new system-wide restaurants across 19 states in 2024, reaching a total of 572 locations. For 2025, First Watch projects total revenue growth of ~20.0% and plans to open 59-64 new system-wide restaurants. The company maintains its long-term vision of potentially operating more than 2,200 restaurants in the United States.
First Watch Restaurant Group (NASDAQ: FWRG) ha riportato i risultati finanziari per il 2024, segnando un anno decisivo con ricavi totali superiori a 1,0 miliardi di dollari, in aumento del 13,9% rispetto all'anno precedente, e vendite a livello di sistema che hanno raggiunto 1,2 miliardi di dollari, in aumento del 7,4%.
I principali indicatori finanziari includono:
- Utile netto di 18,9 milioni di dollari
- EBITDA rettificato di 113,8 milioni di dollari
- Margine di reddito operativo del 3,9%
- Margine di profitto operativo a livello di ristorante del 20,1%
L'azienda ha ampliato la propria presenza con 50 nuovi ristoranti a livello di sistema in 19 stati nel 2024, raggiungendo un totale di 572 sedi. Per il 2025, First Watch prevede una crescita dei ricavi totali di circa il 20,0% e pianifica di aprire tra 59 e 64 nuovi ristoranti a livello di sistema. L'azienda mantiene la sua visione a lungo termine di operare potenzialmente più di 2.200 ristoranti negli Stati Uniti.
First Watch Restaurant Group (NASDAQ: FWRG) informó sus resultados financieros de 2024, marcando un año clave con ingresos totales que superaron $1.0 mil millones, un aumento del 13.9% en comparación con el año anterior, y ventas a nivel de sistema alcanzando $1.2 mil millones, un aumento del 7.4%.
Los principales indicadores financieros incluyen:
- Ingreso neto de $18.9 millones
- EBITDA ajustado de $113.8 millones
- Margen de ingreso operativo del 3.9%
- Margen de beneficio operativo a nivel de restaurante del 20.1%
La empresa amplió su presencia con 50 nuevos restaurantes a nivel de sistema en 19 estados en 2024, alcanzando un total de 572 ubicaciones. Para 2025, First Watch proyecta un crecimiento de ingresos totales de aproximadamente el 20.0% y planea abrir entre 59 y 64 nuevos restaurantes a nivel de sistema. La empresa mantiene su visión a largo plazo de operar potencialmente más de 2,200 restaurantes en los Estados Unidos.
퍼스트 워치 레스토랑 그룹 (NASDAQ: FWRG)는 2024년 재무 결과를 발표하며, 총 수익이 10억 달러를 초과하고, 전년 대비 13.9% 증가했으며, 시스템 전체 매출이 12억 달러에 도달하여 7.4% 증가한 중요한 해가 되었다고 밝혔습니다.
주요 재무 지표는 다음과 같습니다:
- 순이익 1,890만 달러
- 조정 EBITDA 1억 1,380만 달러
- 영업 이익률 3.9%
- 레스토랑 수준 운영 이익률 20.1%
회사는 2024년 19개 주에 걸쳐 50개의 새로운 시스템 전체 레스토랑을 확장하여 총 572개 위치에 도달했습니다. 2025년에는 퍼스트 워치가 약 20.0%의 총 수익 성장률을 예상하고, 59~64개의 새로운 시스템 전체 레스토랑을 열 계획입니다. 회사는 미국에서 2,200개 이상의 레스토랑을 운영할 수 있는 장기 비전을 유지하고 있습니다.
First Watch Restaurant Group (NASDAQ: FWRG) a annoncé ses résultats financiers pour 2024, marquant une année décisive avec des revenus totaux dépassant 1,0 milliard de dollars, en hausse de 13,9 % par rapport à l'année précédente, et des ventes à l'échelle du système atteignant 1,2 milliard de dollars, en hausse de 7,4 %.
Les principaux indicateurs financiers incluent :
- Revenu net de 18,9 millions de dollars
- EBITDA ajusté de 113,8 millions de dollars
- Marge de revenu d'exploitation de 3,9 %
- Marge de bénéfice opérationnel au niveau du restaurant de 20,1 %
L'entreprise a élargi sa présence avec 50 nouveaux restaurants à l'échelle du système dans 19 États en 2024, atteignant un total de 572 emplacements. Pour 2025, First Watch prévoit une croissance des revenus totaux d'environ 20,0 % et prévoit d'ouvrir entre 59 et 64 nouveaux restaurants à l'échelle du système. L'entreprise maintient sa vision à long terme d'opérer potentiellement plus de 2 200 restaurants aux États-Unis.
First Watch Restaurant Group (NASDAQ: FWRG) hat seine finanziellen Ergebnisse für 2024 veröffentlicht und ein entscheidendes Jahr markiert, in dem die Gesamteinnahmen 1,0 Milliarden Dollar überstiegen, was einem Anstieg von 13,9% im Vergleich zum Vorjahr entspricht, und die systemweiten Verkäufe 1,2 Milliarden Dollar erreichten, was einem Anstieg von 7,4% entspricht.
Wichtige Finanzkennzahlen umfassen:
- Nettoeinkommen von 18,9 Millionen Dollar
- Bereinigtes EBITDA von 113,8 Millionen Dollar
- Betriebsgewinnmarge von 3,9%
- Gewinnmarge auf Restaurantebene von 20,1%
Das Unternehmen hat seine Präsenz mit 50 neuen systemweiten Restaurants in 19 Bundesstaaten im Jahr 2024 erweitert und erreicht insgesamt 572 Standorte. Für 2025 prognostiziert First Watch ein Umsatzwachstum von etwa 20,0% und plant, 59 bis 64 neue systemweite Restaurants zu eröffnen. Das Unternehmen hält an seiner langfristigen Vision fest, potenziell mehr als 2.200 Restaurants in den Vereinigten Staaten zu betreiben.
- Total revenues surpassed $1 billion milestone, up 13.9% YoY
- System-wide sales increased to $1.2 billion
- Adjusted EBITDA grew to $113.8 million from $99.5 million
- Restaurant level operating profit margin improved to 20.1%
- Significant expansion with 50 new restaurants opened in 2024
- Projected 20% revenue growth for 2025
- Net income decreased to $18.9 million from $25.4 million
- Same-restaurant sales declined 0.5% in 2024
- Same-restaurant traffic dropped 4.0%
- Income from operations margin decreased to 3.9% from 4.7%
- Q4 2024 net income declined to $0.7M from $2.6M in Q4 2023
Insights
First Watch's fiscal 2024 results present a mixed financial picture with both significant achievements and concerning trends. The company crossed two critical milestones: $1.0 billion in total revenues (up 13.9%) and $113.8 million in Adjusted EBITDA (up from $99.5 million). However, these headline figures mask underlying challenges in the core business.
The negative 0.5% same-restaurant sales and more worrying negative 4.0% same-restaurant traffic indicate existing locations are losing customers despite price increases offsetting some of the traffic decline. This suggests potential market saturation or competitive pressures in established markets.
Revenue growth is primarily driven by the aggressive expansion strategy with 50 new system-wide restaurants opened in 2024, not operational improvements at existing locations. The decreased net income ($18.9 million vs $25.4 million prior year) and lower operating margin (3.9% vs 4.7%) reflect higher costs cutting into profitability.
For 2025, management projects ~20% revenue growth and further expansion with 59-64 new system-wide restaurants planned. The forecast for positive low-single digit same-restaurant sales with flat-to-slightly positive traffic suggests they believe they can reverse the negative traffic trend, though this appears optimistic given recent performance.
First Watch's long-term vision of over 2,200 potential U.S. locations (versus current 572) confirms their growth-through-expansion strategy. Investors should monitor whether this expansion can maintain profitability metrics during a potentially challenging consumer environment.
First Watch's 2024 performance reveals a company successfully executing an aggressive unit growth strategy while experiencing operational challenges at existing locations. The 4.0% same-restaurant traffic decline is particularly concerning as it exceeds industry averages and indicates potential market share loss in established markets, despite management highlighting improved operational KPIs.
The company's breakfast-brunch-lunch focus positions it uniquely in the casual dining segment, traditionally allowing for higher margins (20.1% restaurant-level operating profit) than dinner-focused competitors due to lower alcohol inventory costs and faster table turns. This model continues delivering strong unit economics despite traffic headwinds.
First Watch's ability to open 50 restaurants across 19 states during challenging industry conditions demonstrates strong real estate strategy and brand appeal in new markets. Their continued acceleration to 59-64 planned openings for 2025 suggests confidence in unit economics and development pipeline.
Management's outlook for reversing traffic declines in 2025 will require successful implementation of their operational improvements and potentially menu innovation. The 3.5% long-term same-restaurant sales growth target depends on rebuilding traffic while maintaining pricing power.
The $8 million Adjusted EBITDA boost from acquisitions suggests First Watch is opportunistically acquiring franchise locations, potentially indicating strong corporate operations relative to franchise performance or distress among some franchisees. This strategy consolidates revenue and profit but increases corporate capital requirements.
- Total revenues of
$1.0 billion , up13.9% and System-wide sales of$1.2 billion , up7.4% - Income from operations margin of
3.9% and Restaurant level operating profit margin of20.1% - Net income of
$18.9 million and Adjusted EBITDA of$113.8 million - 50 system-wide restaurants opened across 19 states
BRADENTON, Fla., March 11, 2025 (GLOBE NEWSWIRE) -- First Watch Restaurant Group, Inc. (NASDAQ: FWRG) (“First Watch” or the “Company”), the leading Daytime Dining concept serving breakfast, brunch and lunch, today reported financial results for the thirteen weeks ended December 29, 2024 (“Q4 2024”) and the 52-week fiscal year ended December 29, 2024 (“2024”) compared to the fourteen weeks ended December 31, 2023 (“Q4 2023”) and the 53-week fiscal year ended December 31, 2023 (“2023”) and provided an outlook for the 52-week fiscal year ending December 28, 2025 (“2025”).
“2024 was a pivotal year as we surpassed
Highlights for Q4 2024 (13-week quarter) compared to Q4 2023 (14-week quarter)
- Total revenues increased
7.6% to$263.3 million in Q4 2024 from$244.6 million in Q4 2023 - System-wide sales increased
2.6% to$304.1 million in Q4 2024 from$296.5 million in Q4 2023 - Same-restaurant sales growth of negative
0.3% * - Same-restaurant traffic growth of negative
3.0% * - Income from operations decreased to
$3.9 million in Q4 2024 from$6.9 million in Q4 2023 - Income from operations margin decreased to
1.5% in Q4 2024 from2.8% in Q4 2023 - Restaurant level operating profit** increased to
$49.0 million in Q4 2024 from$46.8 million in Q4 2023 - Restaurant level operating profit margin** decreased to
18.8% in Q4 2024 from19.4% in Q4 2023 - Net income of
$0.7 million in Q4 2024 compared to Net income of$2.6 million in Q4 2023 - Adjusted EBITDA** decreased to
$24.3 million in Q4 2024 from$24.6 million in Q4 2023 - Opened 25 system-wide restaurants (23 company-owned and 2 franchise-owned) across 12 states
________________________
*Comparison to the 13-weeks ended December 31, 2023, is provided for enhanced comparability.
**See Non-GAAP Financial Measures Reconciliations section below.
Highlights for 2024 (52-week fiscal year) compared to 2023 (53-week fiscal year):
- Total revenues increased
13.9% to$1.0 billion from$891.6 million in 2023 - System-wide sales increased to
$1.2 billion from$1.1 billion in 2023 - Same-restaurant sales growth of negative
0.5% * - Same-restaurant traffic growth of negative
4.0% * - Income from operations decreased to
$38.9 million from$41.3 million in 2023 - Income from operations margin decreased to
3.9% from4.7% in 2023 - Restaurant level operating profit** increased to
$201.8 million from$175.7 million in 2023 - Restaurant level operating profit margin** increased to
20.1% from20.0% in 2023 - Net income decreased to
$18.9 million from$25.4 million in 2023 - Adjusted EBITDA** increased to
$113.8 million from$99.5 million in 2023 - Opened 50 system-wide restaurants (43 company-owned and 7 franchise-owned) across 19 states resulting in a total of 572 system-wide restaurants (489 company-owned and 83 franchise-owned) across 29 states
________________________
*Comparison to the 52-weeks ended December 31, 2023, is provided for enhanced comparability.
**See Non-GAAP Financial Measures Reconciliations section below.
Outlook Fiscal Year 2025
The Company provides the following outlook for the 52-week fiscal year ended December 28, 2025:
- Same-restaurant sales growth in the positive low-single digits with flat-to-slightly positive same-restaurant traffic growth
- Total revenue growth of ~
20.0% (1) - Adjusted EBITDA* in the range of
$124.0 million to$130.0 million (1) - Blended tax rate in the range of
31.0% to33.0% - Total of 59 to 64 new system-wide restaurants, net of 3 company-owned restaurant closures (55 to 58 new company-owned restaurants and 7 to 9 new franchise-owned restaurants)
- Capital expenditures in the range of
$150.0 million to$160.0 million invested primarily in new restaurant projects and planned remodels(2)
The Company reiterates its long-term annual financial targets as follows:
- Percentage unit growth in the low double digits
- Same-restaurant sales growth of ~
3.5% - Restaurant sales growth in the mid-teens
- Adjusted EBITDA percentage growth in the mid-teens
The Company also believes that the brand has the potential for more than 2,200 restaurants in the United States.
______________________
(1) Includes net impact approximately
(2) Does not include the capital outlays associated with the acquisition of franchise-owned restaurants
*We have not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measure is not available without unreasonable effort.
Conference Call and Webcast
Chris Tomasso, Chief Executive Officer and President, and Mel Hope, Chief Financial Officer, will host a conference call and webcast today to discuss these financial results for Q4 2024 at 8:00 AM ET.
Interested parties may listen to the conference call via any one of two options:
- Dial 201-389-0914, which will be answered by an operator
- Join the webcast at https://investors.firstwatch.com/news-and-events/events
The webcast will be archived shortly after the call has concluded.
Definitions
The following definitions apply to these terms as used in this release:
System-wide restaurants: the total number of restaurants, including all company-owned and franchise-owned restaurants.
System-wide sales: consists of restaurant sales from our company-owned restaurants and franchise-owned restaurants. We do not recognize the restaurant sales from our franchise-owned restaurants as revenue.
Same-restaurant sales growth: the percentage change in year-over-year restaurant sales (excluding gift card breakage) for the comparable restaurant base, which we define as the number of company-owned First Watch branded restaurants open for 18 months or longer as of the beginning of the fiscal year (“Comparable Restaurant Base”). For the year ended 2024, this operating metric compares the 52-week period ended December 29, 2024 with the 52-week period ended December 31, 2023, versus the 53-week fiscal year ended December 31, 2023, in order to compare like-for-like periods. For the 52-weeks ended December 29, 2024 and December 31, 2023, there were 344 restaurants and 327 restaurants in our Comparable Restaurant Base. Measuring our same-restaurant sales growth allows Management to evaluate the performance of our existing restaurant base. We believe this measure is useful for investors to provide a consistent comparison of restaurant sales results and trends across periods within our core, established restaurant base, unaffected by results of store openings, closings and other transitional changes.
Same-restaurant traffic growth: the percentage change in traffic counts for the 52-week period ended December 29, 2024 as compared to the 52-week ended December 31, 2023 using the Comparable Restaurant Base, versus the 53-week fiscal year ended December 31, 2023 in order to compare like-for-like periods. Measuring our same-restaurant traffic growth allows Management to evaluate the performance of our existing restaurant base. We believe this measure is useful for investors because same-restaurant traffic provides an indicator as to the development of our brand and the effectiveness of our marketing strategy.
Adjusted EBITDA: a non-GAAP measure, is defined as net income (loss) before depreciation and amortization, interest expense, income taxes and items that the Company does not consider in the evaluation of its ongoing core operating performance.
Adjusted EBITDA margin: a non-GAAP measure, is defined as Adjusted EBITDA as a percentage of total revenues.
Restaurant level operating profit: a non-GAAP measure, is defined as restaurant sales, less restaurant operating expenses, which include food and beverage costs, labor and other related expenses, other restaurant operating expenses, pre-opening expenses and occupancy expenses. Restaurant level operating profit excludes corporate-level expenses and other items that we do not consider in the evaluation of the ongoing core operating performance.
Restaurant level operating profit margin: a non-GAAP measure, is defined as Restaurant level operating profit as a percentage of restaurant sales.
About First Watch
First Watch is an award-winning 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 award-winning 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 570 First Watch restaurants in 30 states. 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 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, including “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our other filings with 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-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 majority stockholder may differ from those of public stockholders. For additional discussion of factors that could impact our operational and financial results, please refer to our filings with 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. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual financial condition, results of operations, future performance and business may vary in material respects from the performance projected in these forward-looking statements.
Investor Relations Contact
Steven L. Marotta
941-500-1918
investors@firstwatch.com
Media Relations Contact
Jenni Glester
407-864-5823
jglester@firstwatch.com
Non-GAAP Financial Measures (Unaudited)
To supplement the consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we use the following non-GAAP measures, which present operating results on an adjusted basis: (i) Adjusted EBITDA, (ii) Adjusted EBITDA margin, (iii) Restaurant level operating profit and (iv) Restaurant level operating profit margin. Our presentation of these non-GAAP financial measures includes isolating the effects of some items that are either nonrecurring in nature or have no meaningful correlation to our ongoing core operating performance. These supplemental measures of performance are not required by or presented in accordance with GAAP. Management believes these non-GAAP measures provide investors with additional visibility into our operations, facilitate analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operating performance, help to identify operational trends and allow for greater transparency with respect to key metrics used by Management in our financial and operational decision making. Our non-GAAP measures may not be comparable to similarly titled measures used by other companies and have important limitations as analytical tools. These non-GAAP financial measures should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP as they may not provide a complete understanding of our performance. These non-GAAP financial measures should be reviewed in conjunction with our consolidated financial statements prepared in accordance with GAAP.
Adjusted EBITDA and Adjusted EBITDA Margin
Management uses Adjusted EBITDA and Adjusted EBITDA margin (i) as factors in evaluating management’s performance when determining incentive compensation, (ii) to evaluate the Company’s operating results and the effectiveness of our business strategies, (iii) internally as benchmarks to compare the Company’s performance to that of its competitors and (iv) to provide investors with additional transparency of the Company’s operations. The use of Adjusted EBITDA and Adjusted EBITDA margin as performance measures permit a comparative assessment of the Company’s operating performance relative to the Company’s performance based on the Company’s GAAP results, while isolating the effects of some items that are either nonrecurring in nature or vary from period to period without any correlation to the Company’s ongoing core operating performance.
The following tables reconcile Net income (loss) and Net income (loss) margin, the most directly comparable GAAP measures, to Adjusted EBITDA and Adjusted EBITDA margin for the periods indicated:
| FOURTH QUARTER | |||||||||||
| (in thousands) | 2024 | 2023 | 2022 | ||||||||
| Net income (loss) | $ | 699 | $ | 2,648 | $ | (486 | ) | ||||
| Depreciation and amortization | 15,755 | 12,231 | 8,928 | ||||||||
| Interest expense | 3,219 | 2,271 | 1,738 | ||||||||
| Income taxes | 39 | 2,857 | 742 | ||||||||
| EBITDA | 19,712 | 20,007 | 10,922 | ||||||||
| Stock-based compensation (1) | 2,131 | 2,218 | 2,553 | ||||||||
| Transaction expenses, net (2) | 818 | 604 | 537 | ||||||||
| Strategic transition costs (3) | 889 | 211 | 367 | ||||||||
| Impairments and loss on disposal of assets (4) | 139 | 741 | 348 | ||||||||
| Delaware Voluntary Disclosure Agreement Program (5) | 25 | 794 | 149 | ||||||||
| Recruiting and relocation costs (6) | 254 | 50 | 111 | ||||||||
| Insurance proceeds in connection with natural disasters, net (8) | 329 | — | 115 | ||||||||
| Adjusted EBITDA | $ | 24,297 | $ | 24,625 | $ | 15,102 | |||||
| Total revenues | $ | 263,291 | $ | 244,633 | $ | 185,745 | |||||
| Net income (loss) margin | 0.3 | % | 1.1 | % | (0.3 | )% | |||||
| Adjusted EBITDA margin | 9.2 | % | 10.1 | % | 8.1 | % | |||||
| Additional information | |||||||||||
| Deferred rent expense (9) | $ | 242 | $ | 515 | $ | 507 | |||||
| FISCAL YEAR | |||||||||||
| (in thousands) | 2024 | 2023 | 2022 | ||||||||
| Net income | $ | 18,925 | $ | 25,385 | $ | 6,907 | |||||
| Depreciation and amortization | 57,715 | 41,223 | 34,230 | ||||||||
| Interest expense | 12,640 | 8,063 | 5,232 | ||||||||
| Income taxes | 9,101 | 10,690 | 5,684 | ||||||||
| EBITDA | 98,381 | 85,361 | 52,053 | ||||||||
| Stock-based compensation (1) | 8,525 | 7,604 | 10,374 | ||||||||
| Transaction expenses, net (2) | 2,587 | 3,147 | 2,513 | ||||||||
| Strategic transition costs (3) | 1,843 | 892 | 2,318 | ||||||||
| Impairments and loss on disposal of assets (4) | 525 | 1,359 | 920 | ||||||||
| Delaware Voluntary Disclosure Agreement Program (5) | 126 | 1,250 | 149 | ||||||||
| Recruiting and relocation costs (6) | 888 | 465 | 681 | ||||||||
| Severance costs (7) | 204 | 26 | 155 | ||||||||
| Insurance proceeds in connection with natural disasters, net (8) | 329 | (621 | ) | 115 | |||||||
| Loss on extinguishment of debt | 428 | — | — | ||||||||
| Adjusted EBITDA | $ | 113,836 | $ | 99,483 | $ | 69,278 | |||||
| Total revenues | $ | 1,015,910 | $ | 891,551 | $ | 730,162 | |||||
| Net income margin | 1.9 | % | 2.8 | % | 0.9 | % | |||||
| Adjusted EBITDA margin | 11.2 | % | 11.2 | % | 9.5 | % | |||||
| Additional information | |||||||||||
| Deferred rent expense (9) | $ | 1,318 | $ | 2,090 | $ | 2,418 | |||||
___________________________
(1) Represents non-cash, stock-based compensation expense which is recorded within General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).
(2) Represents costs incurred in connection with the acquisition of franchise-owned restaurants, expenses related to debt, secondary offering costs, costs related to restaurant closures, gains or losses associated with lease or contract terminations and revaluations of contingent consideration liability.
(3) Represents costs related to process improvements and strategic initiatives. These costs are recorded within General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).
(4) Represents impairment charges and costs related to the disposal of assets due to retirements, replacements, restaurant closures and natural disasters.
(5) Represents professional service costs incurred in connection with the Delaware Voluntary Disclosure Agreement Program related to unclaimed or abandoned property. These costs are recorded in General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).
(6) Represents costs incurred for hiring qualified individuals. These costs are recorded within General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).
(7) Severance costs are recorded in General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).
(8) Represents insurance recoveries, net of costs incurred, in connection with hurricane damage, which were recorded in Other income, net on the Consolidated Statements of Operations and Comprehensive Income (Loss).
(9) Represents the non-cash portion of straight-line rent expense recorded within both Occupancy expenses and General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).
Restaurant level operating profit and Restaurant level operating profit margin
Restaurant level operating profit and Restaurant level operating profit margin are not indicative of our overall results, and because they exclude corporate-level expenses, do not accrue directly to the benefit of our stockholders. We will continue to incur such expenses in the future. Restaurant level operating profit and Restaurant level operating profit margin are important measures we use to evaluate the performance and profitability of each operating restaurant, individually and in the aggregate and to make decisions regarding future spending and other operational decisions. We believe that Restaurant level operating profit and Restaurant level operating profit margin provide useful information about our operating results, identify operational trends and allow for transparency with respect to key metrics used by us in our financial and operational decision-making.
The following tables reconcile Income from operations and Income from operations margin, the most directly comparable GAAP financial measures, to Restaurant level operating profit and Restaurant level operating profit margin for the periods indicated:
| FOURTH QUARTER | |||||||||||
| (in thousands) | 2024 | 2023 | 2022 | ||||||||
| Income from operations | $ | 3,861 | $ | 6,855 | $ | 1,479 | |||||
| Less: Franchise revenues | (2,666 | ) | (3,591 | ) | (2,893 | ) | |||||
| Add: | |||||||||||
| General and administrative expenses | 30,743 | 29,953 | 21,765 | ||||||||
| Depreciation and amortization | 15,755 | 12,231 | 8,928 | ||||||||
| Transaction expenses, net (1) | 818 | 604 | 537 | ||||||||
| Impairments and loss on disposal of assets (2) | 139 | 741 | 348 | ||||||||
| Costs in connection with natural disasters (3) | 312 | — | 382 | ||||||||
| Restaurant level operating profit | $ | 48,962 | $ | 46,793 | $ | 30,546 | |||||
| Restaurant sales | $ | 260,625 | $ | 241,042 | $ | 182,852 | |||||
| Income from operations margin | 1.5 | % | 2.8 | % | 0.8 | % | |||||
| Restaurant level operating profit margin | 18.8 | % | 19.4 | % | 16.7 | % | |||||
| Additional information | |||||||||||
| Deferred rent expense (4) | $ | 192 | $ | 466 | $ | 457 | |||||
| FISCAL YEAR | |||||||||||
| (in thousands) | 2024 | 2023 | 2022 | ||||||||
| Income from operations | $ | 38,907 | $ | 41,267 | $ | 16,913 | |||||
| Less: Franchise revenues | (11,555 | ) | (14,459 | ) | (10,981 | ) | |||||
| Add: | |||||||||||
| General and administrative expenses | 113,270 | 103,121 | 84,959 | ||||||||
| Depreciation and amortization | 57,715 | 41,223 | 34,230 | ||||||||
| Transaction expenses, net (1) | 2,587 | 3,147 | 2,513 | ||||||||
| Impairments and loss on disposal of assets (2) | 525 | 1,359 | 920 | ||||||||
| Costs in connection with natural disasters (3) | 312 | — | 382 | ||||||||
| Restaurant level operating profit | $ | 201,761 | $ | 175,658 | $ | 128,936 | |||||
| Restaurant sales | $ | 1,004,355 | $ | 877,092 | $ | 719,181 | |||||
| Income from operations margin | 3.9 | % | 4.7 | % | 2.4 | % | |||||
| Restaurant level operating profit margin | 20.1 | % | 20.0 | % | 17.9 | % | |||||
| Additional information | |||||||||||
| Deferred rent expense (4) | $ | 1,119 | $ | 1,891 | $ | 2,219 | |||||
____________________________
(1) Represents costs incurred in connection with the acquisition of franchise-owned restaurants, secondary offering costs, costs related to restaurant closures, gains or losses associated with lease or contract terminations and revaluations of contingent consideration liability.
(2) Represents impairment charges and costs related to the disposal of assets due to retirements, replacements, restaurant closures and natural disasters.
(3) Represents costs incurred in connection with hurricane damage. The costs include inventory spoilage and labor costs, which were recorded in Food and beverage costs and Labor and other expenses, respectively. on the Consolidated Statements of Operations and Comprehensive Income (Loss).
(4) Represents the non-cash portion of straight-line rent expense recorded within Occupancy expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).
| FIRST WATCH RESTAURANT GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (Unaudited) | |||||||||||
| Fourth Quarter | |||||||||||
| 2024 | 2023 | 2022 | |||||||||
| Revenues: | |||||||||||
| Restaurant sales | $ | 260,625 | $ | 241,042 | $ | 182,852 | |||||
| Franchise revenues | 2,666 | 3,591 | 2,893 | ||||||||
| Total revenues | 263,291 | 244,633 | 185,745 | ||||||||
| Operating costs and expenses: | |||||||||||
| Restaurant operating expenses (exclusive of depreciation and amortization shown below): | |||||||||||
| Food and beverage costs | 59,245 | 54,346 | 43,361 | ||||||||
| Labor and other related expenses | 87,706 | 81,698 | 63,166 | ||||||||
| Other restaurant operating expenses | 38,736 | 36,905 | 28,715 | ||||||||
| Occupancy expenses | 21,961 | 18,450 | 15,601 | ||||||||
| Pre-opening expenses | 4,327 | 2,850 | 1,845 | ||||||||
| General and administrative expenses | 30,743 | 29,953 | 21,765 | ||||||||
| Depreciation and amortization | 15,755 | 12,231 | 8,928 | ||||||||
| Impairments and loss on disposal of assets | 139 | 741 | 348 | ||||||||
| Transaction expenses, net | 818 | 604 | 537 | ||||||||
| Total operating costs and expenses | 259,430 | 237,778 | 184,266 | ||||||||
| Income from operations | 3,861 | 6,855 | 1,479 | ||||||||
| Interest expense | (3,219 | ) | (2,271 | ) | (1,738 | ) | |||||
| Other income, net | 96 | 921 | 515 | ||||||||
| Income before income taxes | 738 | 5,505 | 256 | ||||||||
| Income tax expense | (39 | ) | (2,857 | ) | (742 | ) | |||||
| Net income (loss) | $ | 699 | $ | 2,648 | $ | (486 | ) | ||||
| Net income (loss) | $ | 699 | $ | 2,648 | $ | (486 | ) | ||||
| Other comprehensive income (loss): | |||||||||||
| Unrealized gain (loss) on derivatives | 2,722 | (1,986 | ) | — | |||||||
| Income tax related to other comprehensive income (loss) | (679 | ) | 494 | — | |||||||
| Other comprehensive income (loss) | 2,043 | (1,492 | ) | — | |||||||
| Comprehensive income (loss) | $ | 2,742 | $ | 1,156 | $ | (486 | ) | ||||
| Net income (loss) per common share - basic | $ | 0.01 | $ | 0.04 | $ | (0.01 | ) | ||||
| Net income (loss) per common share - diluted | $ | 0.01 | $ | 0.04 | $ | (0.01 | ) | ||||
| Weighted average number of common shares outstanding - basic | 60,636,071 | 59,827,847 | 59,193,779 | ||||||||
| Weighted average number of common shares outstanding - diluted | 62,335,821 | 61,688,871 | 59,193,779 | ||||||||
| FIRST WATCH RESTAURANT GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | ||||||||||||
| FISCAL YEAR | ||||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Revenues: | ||||||||||||
| Restaurant sales | $ | 1,004,355 | $ | 877,092 | $ | 719,181 | ||||||
| Franchise revenues | 11,555 | 14,459 | 10,981 | |||||||||
| Total revenues | 1,015,910 | 891,551 | 730,162 | |||||||||
| Operating costs and expenses: | ||||||||||||
| Restaurant operating expenses (exclusive of depreciation and amortization shown below): | ||||||||||||
| Food and beverage costs | 223,097 | 197,374 | 172,561 | |||||||||
| Labor and other related expenses | 335,038 | 294,010 | 238,257 | |||||||||
| Other restaurant operating expenses | 151,968 | 134,477 | 114,476 | |||||||||
| Occupancy expenses | 82,694 | 68,400 | 59,919 | |||||||||
| Pre-opening expenses | 10,109 | 7,173 | 5,414 | |||||||||
| General and administrative expenses | 113,270 | 103,121 | 84,959 | |||||||||
| Depreciation and amortization | 57,715 | 41,223 | 34,230 | |||||||||
| Impairments and loss on disposal of assets | 525 | 1,359 | 920 | |||||||||
| Transaction expenses, net | 2,587 | 3,147 | 2,513 | |||||||||
| Total operating costs and expenses | 977,003 | 850,284 | 713,249 | |||||||||
| Income from operations | 38,907 | 41,267 | 16,913 | |||||||||
| Interest expense | (12,640 | ) | (8,063 | ) | (5,232 | ) | ||||||
| Other income, net | 1,759 | 2,871 | 910 | |||||||||
| Income before income taxes | 28,026 | 36,075 | 12,591 | |||||||||
| Income tax expense | (9,101 | ) | (10,690 | ) | (5,684 | ) | ||||||
| Net income | $ | 18,925 | $ | 25,385 | $ | 6,907 | ||||||
| Net income | $ | 18,925 | $ | 25,385 | $ | 6,907 | ||||||
| Other comprehensive income (loss): | ||||||||||||
| Unrealized gain (loss) on derivatives | 301 | (889 | ) | — | ||||||||
| Income tax related to other comprehensive income (loss) | (75 | ) | 222 | — | ||||||||
| Other comprehensive income (loss) | 226 | (667 | ) | — | ||||||||
| Comprehensive income | $ | 19,151 | $ | 24,718 | $ | 6,907 | ||||||
| Net income per common share - basic | $ | 0.31 | $ | 0.43 | $ | 0.12 | ||||||
| Net income per common share - diluted | $ | 0.30 | $ | 0.41 | $ | 0.11 | ||||||
| Weighted average number of common shares outstanding - basic | 60,365,393 | 59,531,404 | 59,097,512 | |||||||||
| Weighted average number of common shares outstanding - diluted | 62,351,222 | 61,191,613 | 60,140,045 | |||||||||
Same-Restaurant Sales Growth and Same-Restaurant Traffic Growth
| THIRTEEN WEEKS ENDED | SAME-RESTAURANT SALES GROWTH | SAME-RESTAURANT TRAFFIC GROWTH | COMPARABLE RESTAURANT BASE | |||||
| December 29, 2024 | (0.3 | )% | * | (3.0 | )% | * | 344 | |
| December 31, 2023 | 5.0 | % | ** | (1.3 | )% | ** | 327 | |
| December 25, 2022 | 7.7 | % | (0.6 | )% | 301 | |||
___________________
*Comparison to the 13 weeks ended December 31, 2023, is provided for enhanced comparability.
**Thirteen weeks ended December 31, 2023.
FAQ
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