Company: FWRG
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001789940-25-000086
Chunk: 48

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 1
Chunk 48
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421 26.4 %

The increase in interest expense during the thirteen and thirty-nine weeks ended September 28, 2025 as compared to the same periods in the prior year was primarily due to increased borrowings associated with franchise acquisitions.

27

Other Income, Net

Other income, net includes items deemed to be non-operating based on management’s assessment of the nature of the item in relation to our core operations.

THIRTEEN WEEKS ENDEDTHIRTY-NINE WEEKS ENDED(in thousands)SEPTEMBER 28, 2025SEPTEMBER 29, 2024ChangeSEPTEMBER 28, 2025SEPTEMBER 29, 2024ChangeOther income, net$191 $624 (69.4)%$1,141 $1,663 (31.4)%

Other income, net decreased during the thirteen and thirty-nine weeks ended September 28, 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 ENDEDTHIRTY-NINE WEEKS ENDED(in thousands)SEPTEMBER 28, 2025SEPTEMBER 29, 2024ChangeSEPTEMBER 28, 2025SEPTEMBER 29, 2024ChangeIncome tax expense$(2,683)$(1,384)93.9 %$(3,445)$(9,062)(62.0)%Effective income tax rate47.3 %39.6 %7.7 %44.7 %33.2 %11.5 %

For the thirteen and thirty-nine weeks ended September 28, 2025 and September 29, 2024, the income tax expense includes the impact of changes to the estimate of forecasted annual income before taxes relative to the prior period in each respective year.

The effective income tax rates during the thirteen and thirty-nine weeks ended September 28, 2025 increased as compared to the same periods in the prior year primarily due to (i) the changes in income before income taxes, (ii) the increase in FICA tax credits and the corresponding change in valuation allowance and (iii) the impact of executive compensation. 

Management applied the relevant provisions of H.R. 1 – One Big Beautiful Bill in the third quarter of 2025 following its enactment