FWRG Stock Forecast & Price Target

First Watch Restaurant Group Inc. reported a total revenue of $263.3 million for Q4 2024, reflecting a year-over-year increase of 7.6%, alongside an EBITDA growth to $155.0 million, supported by lower-than-expected general and administrative expenses. Despite a slight decline in same-store sales of 0.3%, the company experienced improvements in traffic trends and is positioning itself for future gains through increased marketing investments and an enhanced digital strategy. Additionally, the firm anticipates positive low-single-digit percentage growth in same-store sales for FY25, indicating a favorable outlook driven by improved dining experiences and expanded limited-time offers.

First Watch Restaurant Group Inc. is facing significant headwinds due to declining restaurant-level margins, which fell by approximately 30 basis points year-over-year in 4Q24, despite meeting expectations. The company anticipates a substantial drop in adjusted EBITDA for 1Q25, estimated to be about $4 million lower than 1Q24, primarily due to escalating commodity costs, persistent labor inflation, and challenges associated with new unit openings. Moreover, macroeconomic pressures could adversely impact same-store sales, which may land at the lower end of the long-term growth algorithm, coupled with ongoing commodity inflation resulting in an estimated $10 million negative impact on adjusted earnings for FY25.