8-K: First Watch Reports Strong 2025 Operational Metrics

First Watch Restaurant Group announced preliminary operational results for Q4 and fiscal year 2025, highlighting record new restaurant openings and positive same-restaurant sales and traffic growth.

Summary

• Achieved a record 64 new system-wide restaurant openings across 23 states in fiscal year 2025.
• Reported same-restaurant sales growth of +3.6% for fiscal year 2025.
• Posted positive same-restaurant traffic growth of +0.5% for fiscal year 2025.
• For the fourth quarter of 2025, same-restaurant sales growth was +3.1%.
• Fourth quarter 2025 same-restaurant traffic growth was -1.9%.
• New restaurant classes from 2024 and 2025 continue to outperform the comparable restaurant base and underwriting expectations.
• A strong pipeline for 2026 restaurant development is in place.
• As of December 28, 2025, there were 633 system-wide restaurants, comprising 560 company-owned and 73 franchise-owned locations across 32 states.

Sentiment

Score: 8

Explanation: The filing reports strong operational achievements for the full fiscal year 2025, including record restaurant openings and positive same-restaurant sales and traffic growth. Management expresses high confidence in future strategy and pipeline. The only minor negative is Q4 traffic, but it is overshadowed by overall positive performance and outlook.

Positives

• Record 64 new system-wide restaurant openings in 2025, demonstrating significant expansion.
• Fiscal year 2025 same-restaurant sales growth of +3.6% indicates healthy revenue generation from existing locations.
• Positive same-restaurant traffic growth of +0.5% for fiscal year 2025 suggests increasing customer visits.
• New restaurant classes from 2024 and 2025 are outperforming comparable restaurant base and underwriting expectations, validating expansion strategy.
• A strong pipeline for 2026 indicates continued growth momentum.
• Expanded presence to 633 system-wide restaurants across 32 states, solidifying market leadership.

Negatives

• Fourth quarter 2025 same-restaurant traffic growth was negative at -1.9%.

Risks

• Vulnerability to changes in consumer preferences and economic conditions such as inflation and recession.
• Uncertainty regarding geopolitical conflicts (Russia/Ukraine war, Middle East unrest) and their related impact on macroeconomic conditions, including inflation.
• Inability to successfully open new restaurants or establish new markets.
• Inability to effectively manage growth.
• Potential negative impacts on sales at existing restaurants as a result of new openings.
• A decline in visitors to any of the retail, lifestyle, or entertainment centers where 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.
• Inability to compete effectively for customers.
• Unsuccessful financial performance of franchisees and limited control over their operations.
• Inability to maintain good relationships with franchisees and potential conflicts of interest.
• Geographic concentration of the system-wide restaurant base in the southeast portion of the United States.
• Damage to reputation and negative publicity, including inability to recognize, respond to, and effectively manage the accelerated impact of social media.
• Limited number of suppliers and distributors for several frequently used ingredients and potential shortages or disruptions in supply or delivery.
• Information technology system failures or breaches of network security.
• 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 enactment of new laws.
• Potential liability with gift cards under the property laws of some states.
• Failure to enforce and maintain trademarks and protect other intellectual property, and litigation with respect to intellectual property assets.
• Dependence on executive officers and certain other key employees.
• Inability to identify, hire, train, and retain qualified individuals for the workforce.
• Failure to obtain or to properly verify the employment eligibility of employees.
• Failure to maintain corporate culture as the company grows.
• Unionization activities among 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 the sale of alcoholic beverages.
• Costly and complex compliance with federal, state, and local laws, including trade and tax policies.
• Changes in accounting principles applicable to the company.
• Vulnerability to natural disasters, unusual weather conditions, pandemic outbreaks, political events, war, and terrorism.
• Inability to secure additional capital to support business growth.
• Level of indebtedness.
• Failure to comply with covenants under the credit facility.

Future Outlook

Management remains confident in the continued execution of its long-term strategy and extending its lead in Daytime Dining, supported by a strong pipeline for 2026 restaurant development.

Management Comments

• "Among our teams 2025 achievements were a record 64 new system-wide restaurant openings across 23 states as well as posting same restaurant sales growth of +3.6% and positive same restaurant traffic growth." Chris Tomasso, CEO and President.
• "Our 2024 and 2025 new restaurant classes combined continue to outperform the comparable restaurant base and our underwriting expectations, and our pipeline for 2026 is strong." Chris Tomasso, CEO and President.
• "We remain confident in the continued execution of our long-term strategy and extending our lead in Daytime Dining." Chris Tomasso, CEO and President.

Industry Context

First Watch, as a leading Daytime Dining concept, continues to demonstrate strong expansion and market penetration. The reported operational metrics, particularly the record new restaurant openings and positive full-year sales and traffic growth, suggest robust demand within this specific restaurant segment. The outperformance of new restaurant classes indicates effective market strategy and brand acceptance, reinforcing its position in a competitive dining landscape.

Comparison to Industry Standards

• NA

Stakeholder Impact

• Shareholders: Positive operational results and a strong growth trajectory could lead to increased shareholder value and confidence.
• Employees: Continued expansion and new restaurant openings imply job creation and potential career advancement opportunities.
• Customers: More restaurant locations and a focus on 'Daytime Dining' suggest increased accessibility and continued menu innovation.
• Franchisees: Successful new restaurant classes and system-wide growth indicate a healthy and expanding franchise system, potentially attracting new franchisees and benefiting existing ones.

Next Steps

• Chris Tomasso (CEO) and Mel Hope (CFO) will host a fireside chat at the 28th Annual ICR Conference on January 12, 2026, at 11:00 a.m. Eastern Time.
• Management will host meetings with institutional investors at the ICR Conference.
• Continue the execution of the long-term strategy to extend the lead in Daytime Dining.
• Pursue further restaurant development in 2026 based on a strong pipeline.

Key Dates

Recommendation

First Watch demonstrated robust operational execution in 2025 with record new restaurant openings and solid full-year same-restaurant sales and traffic growth. The outperformance of new restaurant classes and a strong 2026 pipeline indicate continued momentum and effective strategy. While Q4 traffic saw a slight dip, the overall picture is one of aggressive, successful expansion and market leadership in the Daytime Dining segment, suggesting significant upside potential for investors.

Keywords

First Watch, FWRG, Restaurant Group, Daytime Dining, Breakfast, Brunch, Lunch, Restaurant Openings, Same-Restaurant Sales, Traffic Growth, Financial Results, Q4 2025, Fiscal Year 2025, Operational Metrics