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Jun 30, 2024
First Watch Q2 2024 Earnings Report
First Watch reported an increase in total revenues and net income, with improved operating margins.
Key Takeaways
First Watch Restaurant Group reported a 19.5% increase in total revenues to $258.6 million and a 12% increase in net income to $8.9 million for Q2 2024. The company's income from operations margin and restaurant level operating profit margin also improved.
Total revenues increased by 19.5% to $258.6 million.
Net income increased by 12% to $8.9 million, or $0.14 per diluted share.
Adjusted EBITDA increased by 37% to $35.3 million.
System-wide, 7 new restaurants were opened in 6 states.
Forward Guidance
First Watch updated its guidance for the fiscal year ending December 29, 2024.
Positive Outlook
- Total revenue growth in the range of 17.0% to 19.0%.
- Adjusted EBITDA in the range of $106.0 million to $112.0 million.
- Capital expenditures in the range of $125.0 million to $135.0 million invested primarily in new restaurant projects and planned remodels.
- 52-56 new system-wide restaurants, net of 2 company-owned restaurant closures (45 to 48 new company-owned restaurants and 9 to 10 new franchise-owned restaurants)
- Same-restaurant sales growth in a range of negative 2.0%-to-flat with same restaurant traffic growth in the negative mid-single digits
Challenges Ahead
- Same restaurant sales growth in a range of negative 2.0%-to-flat with same restaurant traffic growth in the negative mid-single digits
- Blended tax rate of 31.0% to 33.0%
- Uncertainty regarding the Russia and Ukraine war, Israel-Hamas war and the related impact on macroeconomic conditions, including inflation, as a result of such conflicts or other related events
Historical Earnings Impact
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Avg. Return Before/After Earnings
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