First Watch Restaurant Group Reports 2024 Earnings: $1 Billion Revenue Milestone
- Hardik Shah
- Mar 11
- 2 min read
TLDR
Revenue milestone: First Watch reached $1 billion in total revenue, a 13.9% increase year-over-year.
Growth strategy: Opened 50 new restaurants, with plans to expand marketing and digital capabilities in 2025.
Profitability focus: Adjusted EBITDA grew to $113.8M despite cost pressures; margins remain strong.
Financial Results
First Watch Restaurant Group (NASDAQ: FWRG) is a leading daytime dining restaurant chain specializing in breakfast, brunch, and lunch. Operating in 29 states with 572 locations (489 company-owned, 83 franchised), the company focuses on fresh, made-to-order meals and a seasonal menu approach.
First Watch Earnings
Total Revenue: $1.015 billion (+13.9% YoY)
System-wide Sales: $1.2 billion (+7.4% YoY)
Same-Restaurant Sales Growth: -0.5% (Traffic: -4.0%)
Adjusted EBITDA: $113.8 million (+14.4% YoY)
Net Income: $18.9 million (vs. $25.4M in 2023)
Restaurant-Level Operating Profit Margin: 20.1%
Despite softening same-store traffic (-4.0%), First Watch saw revenue growth driven by new unit openings and acquisitions. CEO Chris Tomasso emphasized that the company remained disciplined, avoiding aggressive price promotions seen across the industry:
"We differentiated ourselves by refraining from aggressive price promotions, which were widespread across all dayparts." - Chris Tomasso, CEO
Management Outlook for 2025
First Watch remains optimistic about growth opportunities:
Revenue Growth: ~20% YoY
Same-Restaurant Sales: Low-single-digit positive growth
Adjusted EBITDA: $124M–$130M
New Restaurant Openings: 59–64 locations
With a focus on brand awareness, the company plans to increase marketing investments in 2025 while maintaining cost discipline.
Operational Performance
Industry & Market Trends
Inflationary pressures persist, particularly in eggs, pork, coffee, and avocados, due to supply chain disruptions.
Consumer discretionary spending remains pressured, though First Watch’s elevated value proposition provides resilience.
Increased marketing spend and tech-driven customer engagement strategies aim to boost traffic and frequency in 2025.
Key Business Milestones
Opened 50 new restaurants across 19 states in 2024, including a record 25 in Q4.
New restaurants outperform system AUVs by 20%, with projected cash-on-cash returns above 35%.
Expansion into New England and Las Vegas positions the brand for nationwide scale.
Challenges & Risks
Commodity Inflation: Egg prices remain volatile due to avian flu.
Labor Costs: Wage inflation (+4.3%) is a key pressure point.
Traffic Recovery: Marketing investments are expected to drive improved guest counts in 2025.
Strategic Initiatives
Brand Expansion: Targeting 2,200 potential U.S. locations over time.
Marketing Investments: Increased brand awareness campaigns to drive traffic and frequency.
Digital Enhancements: Planned launch of:
Custom waitlist experience
New ordering capabilities
Personalized offer wallet
"Scale is the difference between new restaurant openings at A locations in the epicenter of trade areas versus second-rate B or C locations." - Chris Tomasso, CEO
Capital Allocation
Capital Expenditures: $150M–$160M focused on new restaurant development and remodels.
Acquisition Strategy: Expecting M&A activity to contribute ~$8M to Adjusted EBITDA in 2025.
The Bottom Line
First Watch Restaurant Group capped off a milestone year, surpassing $1 billion in revenue while navigating macroeconomic headwinds. With disciplined pricing, strategic marketing, and aggressive expansion, the company aims for positive traffic growth in 2025 while maintaining its premium brand positioning in the daytime dining segment.
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