First Watch reports higher sales, raises outlook after solid Q2

First Watch, a full-service breakfast chain based in Bradenton, Florida, reported a solid second quarter with a 15.2% increase in revenue, reaching $354.7 million. Same-store sales also rose by 3.4%, primarily attributed to an expanded marketing strategy that enhanced brand awareness, alongside a 3.7% pricing uptick and stabilization in supply chain costs. The chain noted improved customer traffic trends, particularly in June, despite an overall flat traffic count for the quarter.

CEO Chris Tomasso highlighted that the uptick in same-restaurant sales was significantly influenced by the enhanced marketing initiatives initiated early last year. He stated, “Benefits from our marketing investments were a significant contributor to our Q2 performance… our marketing objectives are focused on driving at least one more visit from existing customers, while also positioning First Watch squarely in the consideration set for new customers.” Additionally, the brand's limited time offer (LTO) menu, featuring the Chimichurri Steak and Eggs Hash, performed exceptionally well, marking the highest sales of any LTO item in the company’s history.

As part of its growth strategy, First Watch has a robust pipeline of 100 new store openings and recently opened 18 locations across 15 states. The company ended the quarter with a total of 665 restaurants in operation across 33 states and aims to open 53 or 54 more locations in 2026, ultimately targeting a long-term total of 2,200 units.

In terms of financial health, net income for the quarter rose to $2.3 million, or $0.04 per share, compared to $2.1 million, or $0.02 per share, in the corresponding quarter of 2025. The brand has also raised its outlook for same-store sales growth from a range of 1% to 3% to a more optimistic 1.5% to 3%, reflecting confidence in overall performance and effective cost management strategies.

The pace of First Watch's expansion and its marketing effectiveness may indicate a strong health signal for the brand's system, particularly as it navigates toward its ambitious long-term growth target. Whether the brand can sustain this pace through Q3 will depend on its continued marketing success and operational execution.