First Watch Restaurant Group, Inc. operates under the Daytime Dining concept, specifically catering to breakfast, brunch, and lunch. The company has established itself as a leading player in this niche, serving made-to-order meals using fresh ingredients across more than 570 locations in the United States.

In its most recent quarterly report for Q4 2024, First Watch reported total revenues of $263.3 million, marking a 7.6% increase from the prior year period, which reported revenues of $244.6 million. However, the company’s same-restaurant sales declined by 0.3%, with same-restaurant traffic declining by 3%. The income from operations for the fourth quarter decreased to $3.9 million with an operating margin of 1.5%, a decline from the previous year’s margin of 2.8%.

The restaurant-level operating profit was $49.0 million, up from $46.8 million year-over-year, demonstrating a slight margin decrease, from 19.4% to 18.8%. The Q4 adjusted EBITDA was reported at $24.3 million, slightly down from $24.6 million in the same period last year, resulting in an adjusted EBITDA margin of 9.2%, compared to 10.1% in Q4 2023. Net income for the quarter was $700,000, down from $2.6 million in the prior year.

First Watch opened a total of 25 new system-wide restaurants during the fourth quarter, contributing to a total of 572 restaurants at the close of Q4 2024, a significant milestone that includes both company-owned and franchise locations. The overall operating costs increased to 98.5% of total revenues, compared to 97.2% a year prior.

Looking ahead, First Watch provides guidance for 2025, forecasting same-restaurant sales growth in the positive low-single digits and total revenue growth of approximately 20%. The company anticipates adjusted EBITDA to fall within a range of $124 million to $130 million. There are plans to open between 59 to 64 net new system-wide restaurants while closing three company-owned locations due to lease expirations. First Watch’s capital expenditures are estimated between $150 million to $160 million, focused on new restaurant projects and remodel efforts.

In summary, while First Watch is experiencing negative same-restaurant sales and traffic metrics, it continues to expand its footprint and can report strong overall revenue growth alongside climbing operating profits, albeit with some margin pressure.