First Watch Raises Full-Year Earnings Target After Q3 Revenue Jump

First Watch raised its full-year adjusted earnings outlook to approximately $136 million following the release of its third-quarter financial results on Tuesday. The company set the new target at the upper end of its previous guidance range after reporting stronger performance than management had projected for the quarter.

The breakfast and lunch chain generated $349.9 million in revenue during the third quarter, a 10.7 percent increase from the $316 million reported in the same period last year. This represents an increase of approximately $33.9 million in quarterly sales. System-wide sales, which include franchised locations, rose 10.9 percent to $391.2 million, up from $352.7 million a year earlier.

First Watch expanded its footprint by opening 16 restaurants across 11 states during the quarter. The company now operates 681 locations nationwide, consisting of 601 company-owned restaurants and 80 franchised sites spread across 33 states. Net income for the quarter increased to $4.8 million from $3 million in the prior year, while earnings per diluted share rose to 8 cents from 5 cents.

Customer traffic at established restaurants declined by 1.9 percent during the quarter. However, comparable restaurant sales increased by 1 percent, indicating that higher spending per visit offset the lower number of customers. Operating profit rose to $67.3 million from $61.7 million, though the restaurant-level operating profit margin decreased slightly to 19.4 percent from 19.7 percent.

Chris Tomasso, president and CEO of First Watch, stated that teams drove adjusted EBITDA growth ahead of expectations. He said this performance gave the company the confidence to raise its full-year 2026 adjusted EBITDA outlook. The company’s overall operating profit margin remained steady at 3.2 percent, while income from operations increased to approximately $11 million.

For the first nine months of 2026, First Watch generated approximately $1.04 billion in revenue, surpassing the $1 billion mark for the first time in the year-to-date period. This compares with $906.1 million during the same timeframe last year. Net income for the nine-month period reached approximately $4.4 million, a modest increase from $4.3 million a year earlier.

The company expects full-year revenue to grow by approximately 13.5 percent, with comparable restaurant sales projected to increase about 2 percent. First Watch plans to add 60 net restaurants in 2026, including 53 new company-owned locations and nine franchised openings, offset by two closures. It also expects capital expenditures of approximately $145 million for new development and remodels.