Q2 FY2026
Filed Aug 4, 2026First Watch Restaurant Group, Inc. Reports Q2 2026 Financial Results
Total revenues increased 15.2%, Same-Restaurant Sales Growth was 3.4%, and Adjusted EBITDA increased to $34.5 million. Restaurant Level Operating Profit Margin improved, while Same-Restaurant Traffic Growth remained negative and income from operations margin declined.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $354.7M | – | 15.2% |
| System-wide salesother | $397M | – | 14.7% |
| Same-Restaurant Sales Growthother | 3.4% | – | – |
| Same-Restaurant Traffic Growthother | negative 0.4% | – | – |
| Income from operations marginGAAP | 2.3% | – | – |
| Restaurant Level Operating Profit Marginnon-GAAP | 18.8% | – | – |
| Net incomeGAAP | $2.3M | – | – |
| Net income per diluted shareGAAP | $0.04 per diluted share | – | – |
| Adjusted EBITDAnon-GAAP | $34.5M | – | – |
| System-wide restaurantsother | 665 system-wide restaurants | – | – |
| Company-owned restaurantsother | 586 company-owned | – | – |
| Franchise-owned restaurantsother | 79 franchise-owned | – | – |
| Comparable Restaurant Baseother | 454 restaurants | – | – |
52-week fiscal year ending December 27, 2026 outlook
- RevenueTotal revenue growth of 12.5% to 14.0%
- NoteSame-Restaurant Sales Growth of 1.5% to 3.0%
- NoteAdjusted EBITDA of $133.0 million to $136.0 million
- Note60 to 62 net new System-wide restaurants, including 2 company-owned restaurant closures (53 to 54 new company-owned restaurants and 9 to 10 new franchise-owned restaurants)
- NoteCapital expenditures of $145.0 million to $150.0 million invested primarily in new restaurant projects and planned remodels
- NoteIncludes net impact of approximately 1% in total revenue growth and approximately $2 million in Adjusted EBITDA associated with completed acquisitions.
What drove it
- Same-Restaurant Sales Growth of 3.4% was driven by sequentially improving Same-Restaurant Traffic Growth, which turned positive in June.
- Total revenues increased 15.2% to $354.7 million.
- System-wide sales increased 14.7% to $397.0 million.
- The Company opened 18 system-wide restaurants in 15 states, with 1 planned closure.
Concerns
- Same-Restaurant Traffic Growth was negative 0.4%.
- Income from operations margin decreased to 2.3% as compared to 2.4% in the same period of 2025.
- Fiscal 2026 guidance includes 2 company-owned restaurant closures.
What to watch
- Whether Same-Restaurant Traffic Growth sustains the positive trend reported for June.
- Delivery against Same-Restaurant Sales Growth guidance of 1.5% to 3.0%.
- Execution of 60 to 62 net new System-wide restaurants, including 53 to 54 new company-owned restaurants and 9 to 10 new franchise-owned restaurants.
- Capital expenditures of $145.0 million to $150.0 million for new restaurant projects and planned remodels.
- The net impact of completed acquisitions, estimated at approximately 1% in total revenue growth and approximately $2 million in Adjusted EBITDA.
Analysis
First Watch reported a solid Q2 2026, with total revenues increasing 15.2% to $354.7 million and system-wide sales increasing 14.7% to $397.0 million. The Company reported Same-Restaurant Sales Growth of 3.4%, while management attributed the result to sequentially improving traffic that turned positive in June. The comparable restaurant base was 454 restaurants, compared with 382 restaurants for the corresponding 2025 periods described in the release.
Traffic remains the principal operating point requiring attention. Same-Restaurant Traffic Growth was negative 0.4% for the quarter despite management's statement that the measure turned positive in June. This makes the durability of the June improvement important for the balance of fiscal 2026, particularly as the Company guides to Same-Restaurant Sales Growth of 1.5% to 3.0%.
Restaurant-level profitability improved modestly, with Restaurant Level Operating Profit Margin increasing to 18.8% from 18.6%. However, income from operations margin decreased to 2.3% from 2.4%. Net income increased to $2.3 million from $2.1 million, or $0.04 per diluted share from $0.03 per diluted share, while Adjusted EBITDA increased to $34.5 million from $30.4 million.
Growth continued through restaurant development. The Company opened 18 system-wide restaurants in 15 states and had 1 planned closure, ending the quarter with 665 system-wide restaurants across 33 states. The system consisted of 586 company-owned restaurants and 79 franchise-owned restaurants. The fiscal 2026 development plan calls for 60 to 62 net new System-wide restaurants, including 2 company-owned restaurant closures.
The updated outlook calls for total revenue growth of 12.5% to 14.0% and Adjusted EBITDA of $133.0 million to $136.0 million for the 52-week fiscal year ending December 27, 2026. Guidance includes the net impact of completed acquisitions of approximately 1% in total revenue growth and approximately $2 million in Adjusted EBITDA. Capital expenditures of $145.0 million to $150.0 million are planned primarily for new restaurant projects and remodels, underscoring the investment intensity associated with the expansion plan.
Management, verbatim
We delivered a strong second quarter, highlighted by Same-Restaurant Sales Growth of 3.4% driven by sequentially improving Same-Restaurant Traffic Growth, which turned positive in June,
Chris Tomasso, CEO and President
This momentum underscores the enduring appeal of our differentiated brand, the discipline of our operating model and the outstanding performance of our teams across the system. I am grateful to our teams for their continued execution as we expand upon our position as the leading Daytime Dining concept.
Chris Tomasso, CEO and President
Not in the filing
stated, not guessed- Actual gross profit and gross margin
- Actual operating expenses
- Actual income from operations
- Adjusted EBITDA margin
- Operating cash flow
- Free cash flow
- Cash and cash equivalents
- Debt and borrowings
- Share repurchases
- Dividends
- Segment revenue and segment profitability
- Prior-quarter comparisons for reported metrics
- Prior fiscal 2026 outlook for comparison
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.