First Watch’s first quarter offered a clear look at what the brand believes will define its next phase of growth, and the early returns suggest the strategy is gaining traction.
The daytime dining chain reported same-restaurant sales growth of 2.8 percent in Q1, alongside a 2 percent improvement in restaurant-level operating margin to 18.5 percent. Total revenue rose 17.3 percent to $331 million, supported by comparable sales and new unit expansion, as the system grew to 648 restaurants with 16 new openings in the quarter.
One of the primary initiatives is a stepped-up push into digital marketing, an area First Watch began investing in last year and accelerated significantly in early 2026. The company expanded its digital campaign to roughly 75 percent of its restaurant base, up from about one-third in 2025, using a multichannel approach spanning paid social, online video, paid search, and connected TV.
“Based on early analytics, we are already realizing a positive ROI on the increased expense,” said CEO Chris Tomasso.
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The effort is designed not just to drive traffic, but to reshape how the brand engages with consumers. Early results suggest it is working across multiple fronts—bringing in new guests, reactivating lapsed ones, and increasing visit frequency among existing customers.
Additionally, the campaign is strengthening brand health metrics that tend to lag behind traffic gains, including improvements in unaided awareness and future purchase intent. Those signals have been strong enough to prompt the company to accelerate its investment timeline, to the tune of “several million dollars of marketing spend.”
The company is also seeing evidence that the benefits of digital marketing build over time. Markets that received enhanced marketing support in 2025 continue to show sustained lift, reinforcing the idea that repeated exposure compounds impact rather than delivering a one-time boost.
While digital marketing is expanding the top of the funnel, much of the heavy lifting inside the restaurant is being done by menu innovation. First Watch rolled out its first comprehensive core menu update in more than a decade during the quarter, following an extended testing period throughout 2025. The goal was twofold: elevate the guest experience and simplify execution for operators.
Early performance suggests the update is accomplishing both objectives. Signature items such as the Barbacoa Breakfast Tacos and Barbacoa Chilaquiles Breakfast Bowl are exceeding expectations and delivering higher margins, and the broader menu redesign is encouraging guests to explore more of the offering.
“We’re seeing higher attachment rates and more frequent trade-ups, which have translated into per person check average growth in the first quarter that was incremental to our carried pricing,” Tomasso said.
That distinction is important in the current environment. Instead of relying solely on pricing to offset inflation, First Watch is growing check through mix—driven by add-ons, beverages, and premium items that customers are choosing organically.
“That dynamic indicates that customers are not only responding well to the updated menu, but also that the new design is encouraging them to explore deeper into our offerings,” Tomasso said.
Seasonal offerings are playing a larger role in the strategy too. The company extended its Jumpstart seasonal menu from a traditional 10-week run to 20 weeks, allowing for greater operational consistency and the ability to test longer marketing cycles.
The move has already produced notable results. The Chimichurri Steak & Eggs Hash has become the highest-performing seasonal entrée in the brand’s history, and returning items like the Bacon Egg and Cheddar sandwich and Strawberry Tres Leches French Toast are helping drive engagement.
The long-term goal is to create a pipeline where successful seasonal items and test concepts can graduate into the core menu, boosting the brand over time and maintaining a steady cadence of innovation.
Taken together, the menu and marketing strategies are working in tandem—one bringing guests in, the other encouraging them to spend more once they arrive. That combination has helped offset some external pressures, including modest traffic declines influenced in part by weather during the quarter.
Even so, leadership remains confident in the underlying health of the business, pointing to strong consumer engagement and favorable mix trends.
“I think for us, it comes down to really three things: experience, execution, and value,” Tomasso said.
The company’s ability to deliver on those factors has been supported by its development strategy, which continues to be a major driver of overall growth. First Watch remains one of the fastest-growing full-service restaurant brands in the U.S., with new restaurant performance consistently exceeding expectations.
The class of 2025’s annualized sales remains ahead of underwriting targets and the comp base. Early returns from the 2026 class are even stronger.
That outperformance is the result of steady refinement of the company’s development playbook, from site selection and prototype design to pre-opening marketing and operational execution. Each new class of restaurants has built on lessons from the previous one, leading to improved productivity and more consistent openings.
“We’re just constantly getting better,” Tomasso said.
Pre-opening marketing, in particular, is becoming an increasingly important lever, helping build anticipation and drive early traffic in new markets. The company is also leaning more heavily into market densification, opening additional restaurants within existing regions to build brand awareness, improve efficiency, and capture incremental demand.
The results give First Watch confidence that it can work in a wide range of geographies, whether it’s core, emerging, or new markets.
Looking ahead, the company is maintaining its full-year guidance for same-restaurant sales growth of 1 to 3 percent and total revenue growth of 12 to 14 percent. The brand raised the low end of its adjusted EBITDA outlook as well. It also plans to open between 59 and 63 net new restaurants in 2026, with development weighted toward the back half of the year.
