Bradenton-based First Watch opened 16 restaurants across 11 states during the third quarter, bringing its nationwide footprint to 681 locations as revenue increased 10.7% to $349.9 million, according to financial results released Tuesday. The breakfast, brunch and lunch chain generated approximately $33.9 million more in revenue than it did during the same period last year, when quarterly revenue totaled $316 million.
The expansion brought First Watch to 601 company-owned restaurants and 80 franchised locations across 33 states, extending a national operation that generated $391.2 million in system-wide sales during the quarter, an increase of 10.9% from $352.7 million a year earlier. That figure includes sales at franchised restaurants, which First Watch reports separately from its own revenue because those locations are operated by franchisees.
Customer traffic at established First Watch restaurants declined 1.9% during the quarter, although comparable restaurant sales increased 1%, suggesting that higher spending per visit helped offset the reduction in customers. The company measures comparable sales using company-owned restaurants that have been operating long enough to provide a consistent year-over-year comparison, allowing management to examine the performance of established locations independently of its expanding restaurant network.
First Watch also reported stronger quarterly earnings, with net income increasing to $4.8 million from $3 million a year earlier, while earnings per diluted share rose to 8 cents from 5 cents. Adjusted earnings before interest, taxes, depreciation and amortization increased to $39.7 million from $34.1 million, exceeding management’s expectations and prompting the company to raise its full-year adjusted earnings outlook to approximately $136 million, the upper end of its previous guidance range.
“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,” said Chris Tomasso, the company’s president and CEO.
Profitability at the restaurant level showed a more complicated picture, with operating profit increasing to $67.3 million from $61.7 million even as the restaurant-level operating profit margin declined to 19.4% from 19.7% a year earlier. The company’s overall operating profit margin remained unchanged at 3.2%, while income from operations increased to approximately $11 million from $10.1 million during the comparable quarter of 2025.
Through the first nine months of 2026, First Watch generated approximately $1.04 billion in revenue, up from $906.1 million during the same period last year, pushing year-to-date sales above $1 billion. Net income increased more modestly, reaching approximately $4.4 million compared with $4.3 million a year earlier, as operating costs and expenses also increased during the period.
First Watch expects full-year revenue to increase approximately 13.5%, with comparable restaurant sales projected to grow about 2% as the company enters the final quarter of 2026. Its updated financial outlook also calls for approximately $136 million in adjusted earnings before interest, taxes, depreciation and amortization, reflecting management’s stronger expectations following the third-quarter results.
The company is maintaining its plan to add 60 net restaurants during 2026, consisting of 53 new company-owned locations and nine franchised openings, offset by two company-owned closures. First Watch also expects approximately $145 million in capital expenditures for the year, primarily for new restaurant development and planned remodels, excluding the additional costs of acquiring existing franchised restaurants.