First Watch delivered a stable first quarter, meeting Wall Street’s expectations for both revenue and adjusted earnings per share. Management attributed results to the rollout of its new core menu and a significant expansion of digital marketing initiatives, both of which aimed to enhance customer engagement and check averages. CEO Christopher Tomasso emphasized, “Customers are not only responding well to the updated menu, but also that the new design is encouraging them to explore deeper into our offerings,” highlighting positive shifts in consumer behavior despite mixed macroeconomic signals in the broader breakfast segment.
Is now the time to buy FWRG? Find out in our full research report (it’s free for active Edge members).
First Watch (FWRG) Q1 CY2026 Highlights:
- Revenue: $331 million vs analyst estimates of $329.7 million (17.3% year-on-year growth, in line)
- Adjusted EPS: -$0.02 vs analyst estimates of -$0.03 (in line)
- Adjusted EBITDA: $27.8 million vs analyst estimates of $25.29 million (8.4% margin, 9.9% beat)
- EBITDA guidance for the full year is $136.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 0.3%, in line with the same quarter last year
- Locations: 648 at quarter end, up from 584 in the same quarter last year
- Same-Store Sales rose 2.8% year on year (0.7% in the same quarter last year)
- Market Capitalization: $720 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From First Watch’s Q1 Earnings Call
- James Salera (Stephens Inc.) asked about First Watch’s resilience versus broader breakfast industry pressures. CEO Christopher Tomasso explained that the company’s focus on experience, value, and execution distinguishes it from quick-service competitors experiencing softness.
- Jeffrey Bernstein (Barclays) questioned the impact of rising gas prices on traffic trends. Tomasso responded that weather, not fuel prices, was the main driver of traffic pressure, while higher menu engagement offset macroeconomic concerns.
- Brian Vaccaro (Raymond James) inquired about the company’s philosophy on menu pricing versus peers. Tomasso reiterated a consumer-focused approach, preferring to build check through innovation, with any price increases subject to ongoing evaluation.
- Jon Tower (Citi) asked if new marketing efforts were attracting younger or less affluent guests. Tomasso confirmed an increase in millennial customers, noting that digital and social campaigns are intentionally targeting younger demographics.
- Chris O'Cull (Stifel) questioned the rationale for eliminating the COO role. Tomasso said the move brings him closer to operations and is expected to improve efficiency and execution by streamlining leadership.
Catalysts in Upcoming Quarters
In coming quarters, StockStory analysts will focus on (1) the sustained impact of expanded digital marketing on customer acquisition and frequency, (2) successful execution and customer response to the new core and seasonal menus, and (3) the pace and performance of new restaurant openings, especially as the development pipeline shifts to market densification. The company’s ability to manage inflation and calibrate pricing without hurting traffic will also be a key performance marker.
First Watch currently trades at $11.68, down from $12.21 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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