Company: FWRG
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001789940-25-000041
Chunk: 30

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 1
Chunk 30
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, 2024, respectively. The total related income tax benefit for stock-based compensation expense was $1.1 million and $1.3 million during the thirteen weeks ended March 30, 2025 and March 31, 2024, respectively.Unrecognized stock-based compensation expenseThe following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of March 30, 2025:UNRECOGNIZED STOCK-BASED COMPENSATION EXPENSE (in thousands) REMAINING WEIGHTED AVERAGE VESTING PERIOD  (in years)Stock options$19 0.5Restricted stock units $18,634 2.3

11.    Income Taxes 

THIRTEEN WEEKS ENDED(in thousands)MARCH 30, 2025MARCH 31, 2024(Loss) income before income taxes$(1,537)$10,013 Income tax benefit (expense)$708 $(2,799)Effective income tax rate46.1 %28.0 %The effective income tax rate for the thirteen weeks ended March 30, 2025 was 46.1%  as compared to 28.0% for the thirteen weeks ended March 31, 2024. 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 (the “FICA tax credit”). The level of FICA tax credits is primarily driven by restaurant sales and is not impacted by costs incurred that may reduce income before provision for income taxes. The provision for income taxes decreased primarily due to the FICA tax credits, which are subject to a valuation allowance, relative to changes in pre-tax book income.The effective income tax rates for the thirteen weeks ended March 30, 2025 and March 31, 2024 were different than the blended federal and state statutory rate primarily due to (i) the change in the valuation allowance, (ii) the benefit of tax credits for FICA taxes on certain employees’ tips and (iii) the impacts of executive stock-based compensation. Valuation allowanceManagement evaluates quarterly whether the resulting deferred tax assets are realizable given the Company’s earnings history. Based on the available evidence, the Company does not meet the more likely than not standard related to the realization of a portion of the deferred tax assets as of March 30, 2025. Accordingly, the Company has established a valuation allowance on the portion of deferred tax