First Watch Financials: Revenue Hits $350M as Expansion Outpaces Traffic

First Watch reported third-quarter revenue of $349.9 million on Tuesday.

The 10.7% increase from the same period last year marks the company's strongest quarterly performance to date. This figure exceeds the $316 million recorded in the prior year's third quarter by approximately $33.9 million. The growth coincided with the opening of 16 new restaurants across 11 states during the quarter.

The company's total footprint now stands at 681 locations in 33 states. This includes 601 company-owned restaurants and 80 franchised locations. System-wide sales, which include revenue from franchisees that First Watch reports separately, reached $391.2 million. That total represents a 10.9% increase from $352.7 million a year earlier.

Customer behavior at established locations showed mixed signals during the quarter. Traffic at these restaurants declined by 1.9%, yet comparable sales rose by 1%. The company attributes this discrepancy to higher spending per visit, which offset the reduction in customer volume. First Watch calculates comparable sales using company-owned restaurants that have operated long enough to allow for consistent year-over-year analysis.

Profitability metrics revealed a complex picture. Net income increased to $4.8 million from $3 million in the prior year. Earnings per diluted share rose to 8 cents from 5 cents. Adjusted earnings before interest, taxes, depreciation and amortization climbed to $39.7 million, up from $34.1 million. This performance exceeded internal projections, prompting management to raise the full-year adjusted EBITDA outlook to approximately $136 million. Chris Tomasso, the company's president and CEO, stated that the team's execution drove this growth ahead of expectations.

While total operating profit increased to $67.3 million from $61.7 million, the restaurant-level operating profit margin slipped to 19.4% from 19.7% a year earlier. The company's overall operating profit margin held steady at 3.2%. Income from operations rose to approximately $11 million from $10.1 million in the comparable 2025 period.

For the first nine months of 2026, First Watch generated approximately $1.04 billion in revenue, surpassing the $906.1 million recorded in the same period last year. Net income for the nine-month period reached approximately $4.4 million, a slight increase from $4.3 million a year earlier. The company maintains its plan to add 60 net restaurants in 2026, consisting of 53 new company-owned sites and nine franchises, offset by two closures. It projects capital expenditures of approximately $145 million for the year, primarily for new development and remodels.