Company: FWRG
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001789940-25-000072
Chunk: 41

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 41
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,987 28.4 %As a percentage of restaurant sales23.6 %21.8 %1.8 %23.7 %21.8 %1.9 %

Food and beverage costs as a percent of restaurant sales increased during the thirteen and twenty-six weeks ended June 29, 2025 as compared to the same periods in the prior year primarily due to (i) commodity inflation experienced in eggs, coffee, bacon and avocados, and (ii) increased portion size in certain menu items, partially offset by the leverage associated with menu price increases.

Food and beverage costs increased during the thirteen and twenty-six weeks ended June 29, 2025 as compared to the same periods in the prior year primarily as a result of (i) the 55 NROs and 19 restaurants acquired from franchisees between June 30, 2024 and June 29, 2025, (ii) commodity inflation and (iii) increased portion size of meat in certain menu items.

Labor and Other Related Expenses

Labor and other related expenses are variable by nature and include hourly and management wages, bonuses, payroll taxes, workers’ compensation expense and employee benefits. Factors that influence labor costs include minimum wage and payroll tax legislation, health care costs, the number and performance of our company-owned restaurants and increased competition for qualified staff.

THIRTEEN WEEKS ENDEDTWENTY-SIX WEEKS ENDED(in thousands)JUNE 29, 2025JUNE 30, 2024ChangeJUNE 29, 2025JUNE 30, 2024ChangeLabor and other related expenses$101,310 $83,841 20.8 %$198,064 $163,576 21.1 %As a percentage of restaurant sales33.2 %32.8 %0.4 %33.9 %33.1 %0.8 %

Labor and other related expenses as a percentage of restaurant sales increased during the thirteen and twenty-six weeks ended June 29, 2025 as compared to the same periods in the prior year primarily as a result of increases in (i) wage rates and (ii) health insurance costs, partially offset by the leverage associated with menu price increases.

The increase in labor and other related expenses during the thirteen and twenty-six weeks ended June 29, 2025 as compared to the same periods in the prior year was primarily due to