First Watch Restaurant Group reported a net income of $8.9m or $0.14 per diluted share in the second quarter (Q2) of the fiscal year 2024 (FY24), ending 30 June. This marks an 11.2% increase from the $8m or $0.13 per diluted share recorded in the same quarter of the previous year.
The company’s total revenues for the quarter reached $258.6m, a 19.5% rise from $216.3m in Q2 2023. Of the total revenue, restaurant sales accounted for $255.4m, with the remaining portion coming from franchises.
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The group’s system-wide sales saw a 10.1% increase to $299m in Q2 2024, up from $271.5m in the corresponding quarter of 2023.
The restaurant chain saw same-restaurant sales growth of negative 0.3% and a same-restaurant traffic decline of 4%.
Income from operations margin improved, rising to 6.4% in Q2 2024 from 5.3% in the same quarter of the previous year.
Adjusted EBITDA [earnings before interest, taxation, depreciation and amortisation] for the quarter stood at $35.3m, an increase from $25.8m in Q2 2023, with the adjusted EBITDA margin reaching 13.7% in Q2 2024, up from 11.9% in the previous year.
Total operating costs and expenses were reported at $242.1m in Q2 2024, compared to $204.9m in the same period of the previous year.
Within the quarter, First Watch opened seven new restaurants across six US states, bringing the total to 538 system-wide restaurants, which includes 459 company-owned and 79 franchise-owned locations across 29 states.
The company acquired 21 operating franchise restaurants.
Net income for the first half (H1) of 2024 was slightly down at $16.1m from $17.3m for the same period of the previous year, while revenue climbed to $501m from $427.7m in H1 2023. Adjusted EBITDA for the first half of the year was $63.9m, up from $53.2m in the previous year, with an adjusted EBITDA margin of 12.8%, compared to 12.4% in the same period of the previous year.
Comparing quarter-on-quarter, First Watch’s Q2 2024 net income grew by 23.6% from $7.2m in Q1 2024, with total revenues increasing by 6.6% from $242.4m, and adjusted EBITDA up by 23.4% from $28.6m.
Looking ahead to the 52-week fiscal year ending 29 December 2024, the company expects total revenue growth in the range of 17.0% to 19.0%, with adjusted EBITDA projected to be between $106m and $112m. Capital expenditures are anticipated to be in the range of $125m to $135m, primarily invested in new restaurant projects and planned remodels.
Its share price closed on 6 August at $15.86, up by 11.06%.
