First Watch Restaurant Group (NASDAQ: FWRG) reported impressive second-quarter sales growth, offsetting subdued FY24 guidance, with profits just a penny higher than a year ago. Knee-jerk reaction to guidance sent shares lower pre-market, but The company has since staged an impressive rebound, ending a three-day losing streak with double-digit gains.
Chief Executive Officer Chris Tomasso said: “Against what we believe to be a temporary and challenging backdrop, we are operating our restaurants at a very high level and with great efficiency, as evidenced by our adjusted EBITDA growth.” He added that the The company plans to open 130 new restaurant locations and exceed its average unit sales target.
System-wide sales increased by 10.1% compared with the same period last year, same-store sales grew by 0.3%, same-store customer traffic decreased by 4% compared with the same period last year, while total revenue increased by 19.5%, reaching US$258.6 million, exceeding expectations by US$950,000. This increased restaurant-level operating margin to 21.9% and revenue operating margin to 6.4%. Adjusted EBITDA increased $9.5 million to $35.3 million.
For fiscal 2024, First Watch Restaurant (FWRG) updated its guidance for same-store sales growth, now at negative 2.0% to flat, with same-store traffic growth in the negative mid-single digits, from previous guidance of flat to growing same-restaurant sales The amount increased by 2%, and the number of customers in the same restaurant increased by negative low single digits.
Total revenue in fiscal 2024 is expected to grow 17% to 19%, with an adjusted EBITDA target of $106 million to $112 million. Both are unchanged from previous guidance. Capital expenditures are still likely to be between US$125 million and US$135 million.
