What Happened?
Shares of breakfast restaurant chain First Watch Restaurant Group (NASDAQ: FWRG) jumped 3.5% in the afternoon session after the company announced strong preliminary operational results for its 2025 fiscal year, including record new restaurant openings and positive sales growth.
The daytime dining chain set a company record by opening 64 new restaurants across 23 states in 2025. For the full year, sales at restaurants open for at least a year grew by 3.6%, and customer traffic increased by 0.5%. While fourth-quarter sales also grew by 3.1%, traffic for that specific period saw a slight decline of 1.9%. CEO and President Chris Tomasso noted that the company's new restaurants were outperforming expectations and expressed confidence in the company's long-term strategy, with plans to continue growing its restaurant count by about 10% each year.
The shares closed the day at $16.48, up 5.8% from previous close.
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What Is The Market Telling Us
First Watch’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 19.4% on the news that the company reported weak first quarter 2025 results which featured a significant miss on full-year EBITDA guidance and EBITDA that fell short of Wall Street's estimates.
While revenue grew 16% and met estimates, same-restaurant sales barely rose, and traffic actually declined slightly, underscoring a more cautious consumer and softer in-store trends. Overall, this was a weaker quarter.
First Watch is up 7.2% since the beginning of the year, but at $16.48 per share, it is still trading 25.9% below its 52-week high of $22.23 from February 2025. Investors who bought $1,000 worth of First Watch’s shares at the IPO in September 2021 would now be looking at an investment worth $744.69.
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