Company: FWRG
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001789940-25-000072
Chunk: 69

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 2
Chunk 69
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 loss carryforwards and general business credits that had been accumulated from operations prior to August 2017.

THIRTEEN WEEKS ENDEDTWENTY-SIX WEEKS ENDED(in thousands)JUNE 29, 2025JUNE 30, 2024ChangeJUNE 29, 2025JUNE 30, 2024ChangeTransaction expenses, net$919 $725 26.8 %$1,792 $1,394 28.6 %

The increase in Transaction expenses, net during the thirteen weeks ended June 29, 2025 as compared to the same period in the prior year was primarily due to $0.1 million increased costs incurred in connection with the acquisitions of restaurants from our franchisees.

The increase in Transaction expenses, net during the twenty-six weeks ended June 29, 2025 as compared to the same period in the prior year was primarily due to (i) $0.1 million increased costs incurred in connection with the acquisitions of restaurants from our franchisees and (ii) a $0.6 million reduction to contingent consideration liability in the first quarter of 2024,  partially offset by $0.3 million of debt modification costs incurred in the first quarter of 2024.

26

Income from Operations  

THIRTEEN WEEKS ENDEDTWENTY-SIX WEEKS ENDED(in thousands)JUNE 29, 2025JUNE 30, 2024ChangeJUNE 29, 2025JUNE 30, 2024ChangeIncome from operations$7,313 16,447 (55.5)%8,426 28,733 (70.7)%As a percentage of restaurant sales2.4 %6.4 %(4.0)%1.4 %5.8 %(4.4)%

Income from operations margin 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 increases in restaurant level expenses as a percent of restaurant sales, primarily (i) food and beverage cost inflation, (ii) labor and other related expenses including health insurance, (iii) occupancy and preopening rent expense, (iv) other restaurant operating expenses and (v) depreciation and amortization expense driven by restaurant growth, offset in part by leveraging certain general and administrative expenses.

Income from operations decreased during the thirteen and twenty-six weeks ended June 29