GET DAILY SIGNALSFirst Watch Restaurant Group (FWRG) Reports +10.7% Revenue Growth in Q3 2026
Key Takeaways
- First Watch Restaurant Group (FWRG) reported third-quarter 2026 revenue of $349.9 million, up 10.7% from $316.0 million a year earlier and roughly in line with consensus expectations near $349 million.
- Diluted earnings per share (EPS) came in at $0.08, up from $0.05 in the prior-year quarter and well above the consensus estimate of $0.04.
- Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 17% to $39.7 million, with the margin expanding to 11.4% from 10.8%.
- Same-restaurant sales grew 1.0%, while same-restaurant traffic declined 1.9%, largely reflecting planned sales transfer from new restaurant openings.
- Management raised its full-year 2026 outlook, including adjusted EBITDA of approximately $136 million, at the high end of its prior range.
- The company opened 16 system-wide restaurants during the quarter, bringing its total footprint to 681 locations across 33 states.
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Putting the Results in Context
First Watch Restaurant Group is a leading daytime dining chain focused on made-to-order breakfast, brunch, and lunch. Its third-quarter 2026 results, for the period ended September 27, 2026, came against the toughest same-restaurant sales comparison of the year after a 7.1% rise in the prior period. This made the quarter an important test of whether the company could maintain profitable growth amid cautious consumer spending. The results also matter for investors following the brand’s expansion plans, as new openings and their effect on same-store traffic remain central to the growth narrative. Management’s updated guidance and longer-term profitability targets provided a useful signal on margins and capital allocation going forward.
The Quarter’s Reported Figures
First Watch delivered total revenue of $349.9 million in the third quarter of 2026, a 10.7% increase from $316.0 million in the same period last year. The top-line result landed essentially in line with Wall Street consensus estimates of roughly $349 million. Net income rose to $4.8 million, or $0.08 per diluted share, compared with $3.0 million, or $0.05 per diluted share, a year earlier. The EPS figure significantly exceeded the consensus estimate of $0.04. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Adjusted EBITDA increased 17% to $39.7 million from $34.1 million, with the adjusted EBITDA margin improving to 11.4% from 10.8%. Same-restaurant sales rose 1.0% year over year, while same-restaurant traffic declined 1.9%, which management attributed largely to planned sales transfer associated with new locations. Restaurant-level operating profit margin dipped 30 basis points to 19.4%, reflecting higher food and beverage costs and controllable expenses. The company ended the quarter with 681 system-wide restaurants across 33 states, including 601 company-owned and 80 franchise locations.
Market Reaction and Investor Sentiment
Investors responded favorably to the report, with shares moving higher following the earnings beat and the raised guidance. The earnings surprise was driven primarily by EPS and adjusted EBITDA coming in above consensus, while revenue landed in line with expectations. Market attention also centered on management’s decision to lift its full-year adjusted EBITDA outlook to the high end of its previous range and to raise its longer-term adjusted EBITDA growth target through 2028 to greater than 15%. At the same time, the decline in same-restaurant traffic and the modest compression in restaurant-level margins kept sentiment measured, as investors weighed the company’s pricing-driven comparable sales against softer guest counts.
Forward Outlook and Key Factors to Monitor
Looking ahead, First Watch updated its full-year 2026 guidance, now expecting same-restaurant sales growth of approximately 2.0% and total revenue growth of approximately 13.5%. Adjusted EBITDA is guided to roughly $136 million, and capital expenditures are expected to be about $145 million. The company plans 60 net new system-wide restaurants in 2026 and roughly 55 openings in 2027.
Investors should watch several factors in the quarters ahead. Same-restaurant traffic remains a focal point, given the 1.9% decline this quarter and the question of whether pricing can continue to offset softer guest counts. Cost trends also matter, with wage inflation running around 4.1% and commodity costs moderating on lower bacon and avocado prices. Finally, management’s shift toward a more flexible development pace beyond 2027, driven partly by rising interest rates and floating-rate borrowing exposure, will be an important theme as the company balances unit growth against free cash flow generation and balance-sheet strength.
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In my own work, I frequently rely on Tickeron’s AI Screener to quickly filter stocks by technical patterns, fundamentals, and performance metrics. It helps surface ideas in sectors like restaurants more efficiently than manual methods and supports a more disciplined approach to identifying potential opportunities aligned with my strategy. The tool has become a regular part of how I cross-check earnings data and peer comparisons.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
FWRG in upward trend: 10-day moving average moved above 50-day moving average on October 20, 2026
The 10-day moving average for FWRG crossed bullishly above the 50-day moving average on October 20, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 16 of 20 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 80%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 29, 2026. You may want to consider a long position or call options on FWRG as a result. In 68 of 88 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 77%.
The Moving Average Convergence Divergence (MACD) for FWRG just turned positive on October 29, 2026. Looking at past instances where FWRG's MACD turned positive, the stock continued to rise in 36 of 47 cases over the following month. The odds of a continued upward trend are 77%.
FWRG moved above its 50-day moving average on October 28, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +3.52% 3-day Advance, the price is estimated to grow further. Considering data from situations where FWRG advanced for three days, in 209 of 281 cases, the price rose further within the following month. The odds of a continued upward trend are 74%.
The Aroon Indicator entered an Uptrend today. In 120 of 161 cases where FWRG Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 75%.
Bearish Trend Analysis
The 10-day RSI Indicator for FWRG moved out of overbought territory on October 16, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 27 similar instances where the indicator moved out of overbought territory. In 21 of the 27 cases, the stock moved lower in the following days. This puts the odds of a move lower at 78%.
The Stochastic Oscillator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where FWRG declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 77%.
FWRG broke above its upper Bollinger Band on October 15, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is 45 (best 1 - 100 worst), indicating steady price growth. FWRG’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 51 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.260) is normal, around the industry mean (-0.482). P/E Ratio (44.655) is within average values for comparable stocks, (17.524). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (7.754). Dividend Yield (0.000) settles around the average of (0.048) among similar stocks. P/S Ratio (0.493) is also within normal values, averaging (2.618).
The Tickeron SMR rating for this company is 88 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 96 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. FWRG’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 84, placing this stock worse than average.
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