Breakfast restaurant chain First Watch Restaurant Group (NASDAQ:FWRG) met Wall Street’s revenue expectations in Q3 2026, with revenue up 10.7% year on year to $349.9 million. Its GAAP profit of $0.08 per share was significantly above analysts’ consensus estimates.
For more on First Watch, read our free full research report.
First Watch (FWRG) Q3 2026 highlights:
- Revenue $349.9 million vs S&P analysts’ consensus estimates of $349 million (10.7% year-on-year growth, in line)
- EPS (GAAP) $0.08 vs analysts’ consensus estimates of $0.04 (significant beat)
- Adjusted EBITDA $39.75 million vs analysts’ consensus estimates of $33.82 million (11.4% margin, 17.5% beat)
- EBITDA guidance $136 million at the midpoint for the full year, above analysts’ consensus estimates of $133.5 million
- Operating margin 3.2%, in line with the same quarter last year
- Locations 681 at quarter end, up from 620 in the same quarter last year
- Same-store sales edged higher 1% year on year (7.1% in the same quarter last year)
- Market capitalization $799.2 million
"Our third-quarter performance is another encouraging proof point for the strength of First Watch. We delivered on our top-line plan, grew same-restaurant sales against our toughest comparison of the year and increased total revenue by 10.7%, all while opening 16 system-wide restaurants across 11 states,” said Chris Tomasso, CEO and President of First Watch. “Our teams continue to execute at a high level, driving Adjusted EBITDA growth ahead of our expectations and giving us the confidence to raise our full-year 2026 Adjusted EBITDA outlook to the high end of our previous guidance range."
Revenue growth
Examining a company’s long-term performance can provide clues about its quality. Any business can deliver a good quarter or two, but the best consistently grow over the long term.
With $1.35 billion in revenue over the past 12 months, First Watch is a mid-sized restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the positive side, it can still achieve high growth rates because it’s working from a smaller revenue base.
First Watch’s 18.2% annualized revenue growth over the last seven years was strong as it opened new restaurants and increased revenue at existing, established dining locations.
This quarter, First Watch’s year-on-year revenue growth was 10.7%, and its $349.9 million of revenue was in line with Wall Street’s consensus estimates.
Looking ahead, sell-side analysts expect revenue to grow 11.7% over the next 12 months, according to S&P, a deceleration versus the last seven years. Despite the slowdown, this projection remains strong and implies the market sees success for its menu offerings.
Restaurant performance
Number of restaurants
A restaurant chain’s total number of dining locations often determines how much revenue it can generate.
First Watch operated 681 locations in the latest quarter. It has opened new restaurants at a rapid pace over the last two years, averaging 10.8% annual growth, much faster than the broader restaurant sector. This gives it a chance to become a large, scaled business over time.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
Same-store sales
The change in a company’s restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales growth provides insight into this topic because it measures organic growth at restaurants open for at least a year.
First Watch’s demand has been healthy for a restaurant chain over the last two years. On average, the company has grown its same-store sales by 2.7% per year. This performance gives it the confidence to meaningfully expand its restaurant base.
In the latest quarter, First Watch’s same-store sales rose 1% year on year. This was a meaningful deceleration from its historical levels. The question is whether First Watch can reaccelerate growth.
Key takeaways from First Watch’s Q3 results
First Watch delivered a solid Q3, with EPS topping analysts’ consensus estimates and EBITDA beating Wall Street’s estimates by a wide margin. Those earnings beats were key positives for the quarter. Shares surged 5.1% to $13.61 immediately after the report.
First Watch had a solid quarter, but one earnings result doesn’t necessarily make the stock a buy. That decision should take into account valuation, business quality and the latest earnings. For more on First Watch, read our free full research report here.