First Watch Posts 1% Same-Store Sales Growth, Trims 2027 Openings

First Watch grew same-store sales 1% in the third quarter, but traffic fell 1.9%. The quarter ended Sept. 27. The company called the consumer environment "challenging."

The result sits on top of a 7.1% same-store sales gain a year ago. Pricing added 3.6%. Mix subtracted 0.7%. Executives attributed the traffic decline to "planned sales transfer" as the brand densifies existing markets with new units.

Revenue rose 10.7% year over year, to $349.9 million. Adjusted EBITDA climbed 16%, to $39.7 million. Management credited disciplined expense management and improved productivity for the EBITDA gain.

"We believe that our top-line results effectively demonstrate the long-term resilience of our business model," CEO Chris Tomasso said during Tuesday's earnings call. He added that same-store sales growth matched internal expectations. Resilience is the claim; a 1.9% traffic decline is the caveat that travels with it.

Where did margins land?

Restaurant-level profit margin contracted 30 basis points, to 19.4%. Higher food costs drove most of the squeeze. Commodity costs rose roughly 10 basis points, led by turkey sausage prices and a steak limited-time offer that ran through mid-August. Labor and related expenses held flat at 32.6% of sales — a flat labor line that few full-service peers can currently claim.

The steak LTO shows the standard menu-engineering trade-off. It supported traffic and check, then fed directly into cost of goods.

What changes in guidance and development?

First Watch narrowed its full-year outlook. It now expects same-store sales growth of about 2%, down from a prior range of 1.5% to 3%. It expects revenue growth of 13.5%, the midpoint of its previous 12.5% to 14% range.

The bigger shift is in unit growth. The Bradenton, Florida-based company plans 55 new locations in 2027, down from 62 this year. The stated goals: lower costs, boost cash flow, and redeploy labor toward existing new stores.

Fewer openings should also reduce cannibalization. Tomasso said as much directly. During the quarter, First Watch opened 16 restaurants across 11 states, bringing the year's additions to roughly 50 locations and the system total to 681.

Can marketing move traffic?

Two pilots aim at demand. First Watch launched linear TV advertising earlier this year in a market where brand awareness has historically lagged. Results were encouraging enough to expand the pilot to a second market, with similar outcomes.

"We believe linear television could provide another efficient way to build awareness and support traffic in select markets," Tomasso said. Linear TV is an unusual bet for a growth chain in 2025. The company did not disclose the markets, the spend, or who bears the cost beyond corporate marketing budgets.

The second test is TikTok Go, a new in-app feature that lets users discover and book restaurants and other experiences. First Watch is among the first restaurant operators in the pilot. Management believes it will introduce the brand to a new audience. Both tests run alongside the company's existing data-driven digital marketing program.

What comes next?

The near-term math is straightforward. Pricing of 3.6% is carrying a comp that traffic no longer supports, and 2027's slower build schedule buys margin back at the cost of unit growth. Whether linear TV and TikTok Go can convert awareness into visits will shape whether the 2% full-year comp holds without further price.