Breakfast restaurant chain First Watch Restaurant Group (NASDAQ: FWRG) met Wall Street’s revenue expectations in Q1 CY2026, with sales up 17.3% year on year to $331 million. Its GAAP loss of $0.04 per share was $0.01 below analysts’ consensus estimates.

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"I am proud of our teams for delivering solid results, exemplified by Same Restaurant Sales growth of 2.8% and expanded restaurant-level operating profit versus a year ago. Our track record of rapid unit growth continued this quarter with 16 new restaurants added, bringing to 67 the total number of new restaurants opened over the past twelve months,” stated Chris Tomasso, CEO and President of First Watch.

Company Overview

Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ: FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years.

With $1.27 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 bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, First Watch’s sales grew at an exceptional 19.4% compounded annual growth rate over the last six years as it opened new restaurants and increased sales at existing, established dining locations.

This quarter, First Watch’s year-on-year revenue growth was 17.3%, and its $331 million of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 12.3% over the next 12 months, a deceleration versus the last six years. Still, this projection is noteworthy and implies the market is baking in success for its menu offerings.

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Restaurant Performance

Number of Restaurants

First Watch sported 648 locations in the latest quarter. Over the last two years, it has opened new restaurants at a rapid clip by averaging 10.4% annual growth, among the fastest in the 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 provides a deeper understanding of this issue because it measures organic growth at restaurants open for at least a year.

First Watch’s demand within its existing dining locations has been relatively stable over the last two years but was below most restaurant chains. On average, the company’s same-store sales have grown by 1.8% per year. This performance suggests it should consider improving its foot traffic and efficiency before expanding its restaurant base.

In the latest quarter, First Watch’s same-store sales rose 2.8% year on year. This performance was more or less in line with its historical levels.

Key Takeaways from First Watch’s Q1 Results

We were impressed by how significantly First Watch blew past analysts’ EBITDA expectations this quarter. We were also glad its same-store sales outperformed Wall Street’s estimates. On the other hand, its EPS was in line. Overall, this print had some key positives. The stock traded up 2.2% to $12.48 immediately following the results.

Big picture, is First Watch a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).