First Watch Restaurant Group Q1 2026 Earnings Snapshot

First Watch Restaurant Group (FWRG) opened Q1 2026 with recent quarterly revenue of US$316.4 million and basic EPS of US$0.25, setting the tone for how investors are reading the latest numbers against prior momentum. The company reported revenue of US$263.3 million in Q4 2024 and US$316.4 million in Q4 2025, while quarterly basic EPS shifted from roughly US$0.01 to US$0.25 over the same period, providing a clear view of the recent top and bottom line profile. With a trailing twelve month net profit margin of 1.6% that includes a US$6.1 million one off loss, the focus now is on how sustainably First Watch can defend and improve its profitability from here.

See our full analysis for First Watch Restaurant Group.

With the headline figures on the table, the next step is to see how these results line up with the most common narratives around First Watch, both from the market and the Simply Wall St community, and where those stories might need to be adjusted.

Same Restaurant Growth and New Openings in Focus

• First Watch exited 2025 with 633 restaurants and trailing twelve month same restaurant sales growth of 3.6%, compared with quarterly same restaurant sales growth figures of 0.7% in Q1 2025, 3.5% in Q2 2025 and 7.1% in Q3 2025 across 584 to 620 restaurants.
• Consensus narrative expects the expanding footprint and focus on daytime dining to support long term revenue and earnings, yet the mix of same restaurant sales growth rates shows that performance is not linear across quarters. This means investors need to look at how new units and existing stores together are driving the 10.9% trailing revenue growth rather than assuming every restaurant follows the same path.
  • Analysts in the data see revenue growing 13.1% a year with earnings reaching US$22.4 million by about 2029, while recent quarterly net income excluding extra items ranged from a loss of US$0.8 million in Q1 2025 to US$15.2 million in Q4 2025.
  • This pattern gives some support to the idea of a scalable model, but it also shows that timing of openings, seasonality and cost timing can make individual quarters look very different from the trailing picture.

Margins at 1.6% and Bullish Growth Story

• Over the last twelve months, net profit margin was 1.6% on US$1.2b of revenue, compared with 1.9% a year earlier, and this period includes a US$6.1 million one off loss that weighs on reported profitability.
• Bulls argue that heavy investment in new units, digital marketing and menu changes can support future growth in profit, and the trailing numbers partly support that but also highlight the pressure points to watch.
  • Record 2025 openings and a 64 unit class that is tracking 19% above its underwriting sales target line up with trailing revenue of US$1.2b and give some context for why analysts model earnings growth around 40.7% a year, even with current margins at 1.6%.
  • At the same time, management expects 2026 commodity inflation of 1% to 3% and restaurant level labor inflation of 3% to 5%, while choosing not to raise prices at the start of 2026. This helps explain why profit margins in the forecasts are assumed to be close to or below the current level rather than expanding sharply.

Bulls point to record openings and analyst growth forecasts as backing a long runway, but the 1.6% margin and one off loss make it worth reading the fuller optimistic case before leaning too hard on that view. 🐂 First Watch Restaurant Group Bull Case

Rich P/E Multiple and Bear Concerns

• First Watch trades on a trailing P/E of 38.6x against a peer average of 20.2x and a US Hospitality industry average of 20.8x, while a DCF fair value in the data is US$0.99 per share compared with a current share price of US$12.18 and an analyst consensus price target of US$19.17.
• Bears focus on this valuation gap and on modest trailing earnings growth of 2.6% over the last year, and the numbers in the dataset give them several concrete data points to work with alongside some counterpoints.
  • Industry traffic data cited in the narratives points to a 3% same restaurant traffic decline for 2026 and First Watch reported a 1.9% same restaurant traffic decline in Q4 2025. This sits uneasily next to a 10.9% trailing revenue growth rate and raises questions about how much of that growth is coming from new units versus existing restaurant traffic.
  • At the same time, bears highlight that to reach analysts’ longer term earnings assumptions and justify the consensus target above today’s US$12.18 share price, the company would still be valued on P/E multiples above current industry levels. This means any sustained pressure on margins or traffic would matter more for a stock already priced well above peers on a trailing basis.

Skeptics point to the 38.6x P/E and softer recent margin as reasons for caution, and if those concerns resonate it is worth reviewing the full cautious case before deciding how comfortable you are with that premium. 🐻 First Watch Restaurant Group Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for First Watch Restaurant Group on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With mixed signals on growth, margins and valuation running through this story, it makes sense to review the numbers yourself and move promptly while forming an independent view. A useful starting point is the 3 key rewards and 2 important warning signs.

See What Else Is Out There

First Watch carries a 38.6x P/E, a thin 1.6% margin and traffic softness, which together raise questions about paying a premium for its growth story.

If that premium and margin pressure make you uneasy, it is worth balancing your watchlist with companies screened for 51 high quality undervalued stocks that could offer a more value-focused profile.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.