First Watch Raises Profit Growth Target
The restaurant chain now expects annual Adjusted EBITDA growth above 15% through 2028, up from a prior 11% to 14% range.
Updated on Nov. 3, 2026 in Dining Out
First Watch Restaurant Group raised its annual Adjusted EBITDA growth target through 2028 to more than 15%, replacing a prior range of 11% to 14%. The company kept its plan of about 55 systemwide restaurant openings in 2027.
Why it matters
The higher target signals management's confidence in profitability as the breakfast-focused chain expands its footprint across the United States. Unit-growth rates after 2027 were left flexible, reflecting interest-rate risk and the near-term value of generating more cash.
First Watch finished the quarter with 681 locations across 33 states, including 601 company-owned and 80 franchise-owned restaurants, after opening 16 in 11 states. Same-restaurant sales grew 1% even as traffic fell 1.9%, and the company projects about $136 million in fiscal 2026 Adjusted EBITDA.
The players
First Watch Restaurant Group
A breakfast and brunch restaurant chain operating hundreds of locations across the United States, known for its made-to-order breakfast menu.
The details
The company opened 16 systemwide restaurants across 11 states during the third quarter, which ended Sept. 27. It projects 2% same-restaurant sales growth for fiscal 2026 and positive free cash flow beginning in 2027.
Timeline
Aug. 4: Earlier plan outlining about 55 openings in 2027 was published.
Sept. 27: Third quarter ended.
Nov. 3: Raised Adjusted EBITDA growth target was announced.
Dec. 27, 2026: Fiscal year 2026 ends.
2027: Positive free cash flow is expected to begin and about 55 openings are planned.
Market Landscape
The move reflects a broader push among U.S. casual dining and breakfast chains to pair steady store growth with higher margins rather than expanding at any cost. First Watch's decision to leave post-2027 unit growth flexible suggests the sector is prioritizing cash generation as borrowing costs stay elevated.
For diners, the expansion plan means more First Watch locations are likely to open in coming years, with 2027 slated for about 55 new restaurants. The company's 2% projected same-restaurant sales growth for fiscal 2026 suggests menu prices and traffic will remain the main levers for customers' spending at its breakfast tables.
The takeaway
First Watch's higher profit target shows that breakfast chains can still grow while improving margins, a useful signal for investors tracking the restaurant sector. Diners should expect continued expansion, with the chain's footprint growing from its current 681 locations.
What happens next
The company expects to begin generating positive free cash flow in 2027 and plans about 55 systemwide openings that year.
Further reading
Explore more restaurant chain news in Dining Out.
