Company: FWRG
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001789940-25-000041
Chunk: 64

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 2
Chunk 64
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, (iii) other restaurant operating expenses, (iv) occupancy and preopening rent expense, (v) depreciation and amortization expense and (vi) general and administrative expenses.

Interest Expense

Interest expense primarily consists of interest and fees on our outstanding debt and the amortization expense for debt discount and deferred issuance costs. 

THIRTEEN WEEKS ENDED(in thousands)MARCH 30, 2025MARCH 31, 2024ChangeInterest expense$3,334 $2,599 28.3 %

The increase in interest expense during the thirteen weeks ended March 30, 2025 as compared to the same period in the prior year was due to (i) increased borrowings associated with franchise acquisitions and (ii) higher interest rates.

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 ENDED(in thousands)MARCH 30, 2025MARCH 31, 2024ChangeOther income, net$684 $326 109.8 %

Other income, net increased during the thirteen weeks ended March 30, 2025 as compared to the same period in the prior year primarily due to insurance recoveries recognized during the first quarter of 2025.

Income Tax

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

THIRTEEN WEEKS ENDED(in thousands)MARCH 30, 2025MARCH 31, 2024ChangeIncome tax benefit (expense)$708 $(2,799)(125.3)%Effective income tax rate46.1 %28.0 %18.1 %

25

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 change in the effective income tax rates for the thirteen weeks ended March 30, 2025 as compared to the same period in the prior year was primarily due to the change in pre-tax book income relative to the FICA tax credit and valuation allowance