First Watch Restaurant Group, Inc. reported a 13.9% increase in total revenues for the fiscal year ending December 29, 2024, reaching $1.0 billion, compared to $891.6 million in the previous year. System-wide sales also rose to $1.2 billion from $1.1 billion in 2023. However, the company experienced a decline in net income, which fell to $18.9 million from $25.4 million in 2023, resulting in a net income margin decrease to 1.9% from 2.8%. The income from operations decreased to $38.9 million, down from $41.3 million, reflecting a decrease in the income from operations margin to 3.9% from 4.7%.
In terms of operational developments, First Watch opened 50 new restaurants in 2024, comprising 43 company-owned and 7 franchise-owned locations, bringing the total to 572 system-wide restaurants across 29 states. The company also acquired 22 franchise-operated restaurants, further expanding its footprint. Despite these growth initiatives, the company reported a negative same-restaurant sales growth of 0.5% and a same-restaurant traffic decline of 4.0%, indicating challenges in customer engagement and retention.
The filing highlighted strategic changes, including the implementation of new technologies to enhance customer experience and operational efficiency. The company rolled out pay-at-the-table technology and improved its online ordering systems, which contributed to off-premises sales accounting for 17.5% of total restaurant sales. Additionally, First Watch's average unit volume (AUV) was reported at $2.2 million per restaurant, reflecting strong performance metrics despite the overall decline in same-restaurant sales.
Looking ahead, First Watch anticipates opening between 59 to 64 new system-wide restaurants in 2025, including 55 to 58 company-owned locations. The company expects commodity prices to rise by a high-single-digit percentage in 2025, which may impact profitability. Management remains focused on enhancing operational efficiencies and leveraging its "You First" culture to attract and retain talent, as well as to drive customer loyalty. The company is also addressing material weaknesses in its internal controls over financial reporting, which could affect its financial performance if not remediated effectively.
About First Watch Restaurant Group, Inc.
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