First Watch Lowers Annual EBITDA Guidance Despite Revenue Growth
The restaurant group reported total revenues of $354.7 million for the second quarter.
First Watch Restaurant Group (FWRG), the day-dining operator, reported second-quarter total revenues of $354.7 million.
While the company grew its top line, the pace of expansion slowed. Revenue increased 15.2% year-over-year, a deceleration from the 17.3% growth reported in the first quarter.
Underlying store performance showed signs of recovery. Same-restaurant sales grew 3.4% in the second quarter, accelerating from 2.8% in the prior quarter. This improvement was supported by a shift in customer volume; same-restaurant traffic growth improved to negative 0.4% from negative 2.0% in the first quarter, and traffic turned positive in June.
Profitability at the store level remained resilient. Restaurant-level operating profit margin rose to 18.8%, up from 18.6% in the second quarter of 2025 and 18.5% in the first quarter of 2026. Adjusted EBITDA increased to $34.5 million, compared with $30.4 million in the prior-year period and $27.8 million in the first quarter.
Net income rose to $2.3 million from $2.1 million in the second quarter of 2025, reversing a net loss of $2.7 million in the first quarter. However, the income from operations margin decreased slightly to 2.3% from 2.4% in the second quarter of 2025.
First Watch lowered its full-year 2026 adjusted EBITDA guidance to a range of $133.0 million to $136.0 million, down from the $133 million to $140 million range provided in the first quarter. The company also reduced its capital expenditures guidance for the year to between $145.0 million and $150.0 million from the previous range of $150 million to $160 million.
The company continued its physical expansion by opening 18 system-wide restaurants during the quarter, an increase from the 16 locations opened in the first quarter.