Company: FWRG
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001789940-25-000072
Chunk: 47

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 47
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$950 $1,039 (8.6)%

Other income, net decreased during the thirteen and twenty-six weeks ended June 29, 2025 as compared to the same periods in the prior year primarily due to a reduction in interest income partially offset by insurance recoveries.

Income Tax

Income tax expense primarily consists of various federal and state taxes.

THIRTEEN WEEKS ENDEDTWENTY-SIX WEEKS ENDED(in thousands)JUNE 29, 2025JUNE 30, 2024ChangeJUNE 29, 2025JUNE 30, 2024ChangeIncome tax expense$(1,470)$(4,879)(69.9)%$(762)$(7,678)(90.1)%Effective income tax rate41.1 %35.4 %5.7 %37.4 %32.3 %5.1 %

In the United States, a restaurant company employer may claim a credit against its federal income taxes for FICA taxes paid on certain tipped wages (“FICA tax credits”). The level of FICA tax credits is primarily driven by restaurant sales.

Income tax expense during the thirteen and twenty-six weeks ended June 29, 2025 decreased as compared to the same periods  in the prior year primarily due to (i) the decrease in income before taxes, (ii) the benefit of FICA tax credits and (iii) the change in the valuation allowance.   

27

The effective income tax rates during the thirteen and twenty-six weeks ended June 29, 2025 increased as compared to the same periods in the prior year was primarily due to (i) the benefit of FICA tax credits and (ii) the change in valuation allowance. 

Net Income

THIRTEEN WEEKS ENDEDTWENTY-SIX WEEKS ENDED(in thousands)JUNE 29, 2025JUNE 30, 2024ChangeJUNE 29, 2025JUNE 30, 2024ChangeNet income $2,106 $8,900 (76.3)%$1,277 $16,114 (92.1)%As a percentage of total revenues0.7 %3.4 %(2.7)%0.2 %3.2 %(3.0)%

Net income and net income margin during the thirteen and twenty-six weeks ended June 29, 2025 decreased as compared to