First Watch RestaurantNASDAQ: FWRG

Investors need to pay close attention to First Watch (FWRG) stock based on the movements in the options market lately.

Shares of First Watch Restaurant Group Inc (FWRG, Financial) fell 4.33% in mid-day trading on Oct 2. The stock reached an intraday low of $14.31, before recovering slightly to $14.37, down from its previous close of $15.02.

First Watch Restaurant Group's Q2 showed a considerable traffic decline, but solid underlying earnings growth from a growing scale and upkept pricing. First Watch adjusted its 2024 guidance to reflect weaker expected traffic, but the guidance shift is still likely a sign of weak industry traffic instead of company-specific weakness. Despite present risks in the investment case, FWRG's stock now represents an attractive risk-to-reward at a lower price.

First Watch's strategy of avoiding value promotions in a price-sensitive market is risky, potentially leading to negative comparable sales in Q3 and Q4. The company's focus on menu innovations and premium pricing has helped maintain resilience, but hasn't fully offset declining traffic and average check growth. Recent acquisitions and debt levels are manageable, but continued high capital expenditures and economic risks could increase financial risk in the medium term.

BRADENTON, Fla., Sept. 03, 2024 (GLOBE NEWSWIRE) -- First Watch Restaurant Group, Inc. (NASDAQ: FWRG), the leading Daytime Dining concept serving breakfast, brunch and lunch, recently announced the promotion of Rob Conti to Chief Information Officer. Joining First Watch in 2019, he previously served as Senior Vice President of Information Technology, and brings to the role more than 25 years of experience leading technology solutions and services for prominent hospitality brands. At First Watch, he is responsible for setting the organization's IT strategy and roadmap, and ensuring successful integration of technology initiatives and programs.

Leading Daytime Dining concept strengthens Board with appointment of new independent directors Leading Daytime Dining concept strengthens Board with appointment of new independent directors

While the top- and bottom-line numbers for First Watch Restaurant Group (FWRG) give a sense of how the business performed in the quarter ended June 2024, it could be worth looking at how some of its key metrics compare to Wall Street estimates and year-ago values.

First Watch Restaurant Group, Inc. (FWRG) came out with quarterly earnings of $0.14 per share, beating the Zacks Consensus Estimate of $0.12 per share. This compares to earnings of $0.13 per share a year ago.

Total revenues increased 19.5%  Income from operations margin improved 110 basis points and Restaurant level operating profit margin improved 100 basis points  Net income increased 12 % to $8.9 million and Adjusted EBITDA increased 37% to $35.3 million  7 new system-wide restaurants opened across 6 states