First Watch Restaurant Group, Inc. · NASDAQ:FWRG
First Watch Restaurant — Investor Presentation (August 2024)
28 slides from First Watch Restaurant's investor presentation, Aug 22, 2024
Slide 1: A Breakout Growth Story
A BREAKOUT GROWTH STORY MORE THAN 40 YEARS IN THE MAKING INVESTOR PRESENTATION NASDAQ: FWRG August 22, 2024
Slide 2: Cautionary Note on Forward-Looking Statements and Non-GAAP Financial Measures
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES FORWARD LOOKING STATEMENTS In addition to historical information, this presentation may contain a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, which are subject
Slide 3: If You Haven't Been to a First Watch, Consider This Your Wake-Up Call
IF YOU HAVEN’T BEEN TO A FIRST WATCH, CONSIDER THIS YOUR WAKE-UP CALL • The disruptive leader defining the fast-growing Daytime Dining category • An overnight success more than 40 years in the making • $2.3M AUV * achieved in one 7½ hour daytime shift (7:00 AM - 2:30 PM) • 538 system-wide restaurant
Slide 4: Slide 4
Slide 5: Breakfast Is Served
BREAKFAST IS SERVED • First Watch holds majority of visit share of Daytime Dining segment (1) • Daypart is still in its early stages with upside potential vs. established lunch and dinner • Tremendous opportunity since more than 70% of breakfast occasions occur at home (2) • High consumer interest i
Slide 6: The All Day Cafe Is Changing the Game & Bringing Excitement to an Evolving Daypart
THE ALL DAY CAFE Health & IS CHANGING THE GAME & 1 Freshness BRINGING EXCITEMENT TO AN EVOLVING DAYPART • Operating exclusively during daytime Exploration 2 • Inspired, chef-driven menu & Creativity • Legacy players have not evolved with consumer preferences and tastes • Younger generations are more
Slide 7: First Watch Is the Leader
FIRST WATCH IS THE LEADER • “Follow the Sun” approach A proven, winning daytime formula FRESHNESS • Fresh produce fueled by freshness & Innovation deliveries 3-4x per week 538 the size of the next • Seasonal items & 3 largest Daytime OVER expanding menu Dining competitors 2X combined by platforms nu
Slide 8: Growth & Performance
GROWTH & PERFORMANCE
Slide 9: Attractive New Unit Economics, Flexible Size, Works Everywhere
ATTRACTIVE NEW UNIT ECONOMICS, FLEXIBLE SIZE, WORKS EVERYWHERE SYSTEM-WIDE RESTAURANT COUNT BY STATE AS OF 2023 YEAR END $2.6M 18-20% ~35% 18%+ Year 3 Year 3 Year 3 IRR(3) Avg Sales(1) Restaurant-Level Cash-On-Cash Operating Profit (1) Returns(1) (2) 5 11 19 5 6 40 11 7 7 4 1 19 1 24 Our flexible bo
Slide 10: We Are Reiterating the Long-Term Performance Targets We Identified at the IPO
OCTOBER 1, 2021 UNIT SAME-RESTAURANT SYSTEM-WIDE ADJ. EBITDA WE ARE REITERATING THE LONG-TERM GROWTH SALES GROWTH SALES GROWTH (1) GROWTH PERFORMANCE TARGETS WE IDENTIFIED LOW DOUBLE DIGITS APPROX. 3.5% MID-TEENS MID-TEENS AT THE IPO Note: These are not projections; they are goals/targets and are fo
Slide 11: First Watch Core Brand Pillars
FIRST WATCH FIRST MOVER ADVANTAGE CORE BRAND PILLARS BRAND LOYALTY First Watch shares similar fundamental strengths that distinguish top consumer brands* ROBUST UNIT GROWTH UNIQUE VALUE PROPOSITION *Solely for convenience, the trademarks, trade names, service marks and copyrights referred to herein
Slide 12: The Secret Ingredients to Our Success
THE SECRET INGREDIENTS TO OUR SUCCESS
Slide 13: We Put Employees First Who in Turn Put Guests First
OUR MISSION IS SIMPLE. WE PUT WE PUT EMPLOYEES FIRST • Single shift from 7 AM to 2:30 PM • No night shifts, ever • Investment in employees’ personal and professional growth WHO IN TURN PUT GUESTS FIRST • Employees are empowered to make guests happy • Culture of service • Superior restaurant executio
Slide 14: One Shift, One Menu, One Focus Driving Operational Excellence
One Shift, One Menu, One Focus Driving Operational Excellence • One menu all day • One scheduling shift allows GM to oversee the entire business • No shoulder periods - highly efficient Our unique single-shift operating model allows us to attract, hire and retain our most important asset: great peop
Slide 15: Comforting & Familiar Menu Meets Intrigue & Innovation
COMFORTING & FAMILIAR MENU MEETS INTRIGUE & BROOKLYN BREAKFAST SANDWICH SUNNY SEOUL HASH CITRUS HIBISCUS PUNCH INNOVATION • Familar forms with seasonal flavors • Early trend identification • Five seasonal menu changes per year STRAWBERRY TRES LECHES FRENCH TOAST MINT MOCHA ICED COFFEE BARBACOA CHILA
Slide 16: We Follow the Sun and Care Where Our Food Comes From
WE FOLLOW THE SUN • Track record of establishing partnerships with the best makers, bakers and growers AND CARE WHERE OUR • Menu rotates every 10 weeks to reflect the season and ensure ongoing relevancy FOOD COMES FROM • Focus is on quality and freshness 16 ®
Slide 17: ...And We Keep Raising the Bar
...AND MILLION DOLLAR BREAKFAST SANDWICH WE KEEP RAISING THE BAR PURPLE HAZE 17 ®
Slide 18: Shareables Create Add-On Opportunities
GINGERBREAD SPICE DONUTS SHAREABLES CREATE ADD-ON OPPORTUNITIES RAINBOW TOAST CINNAMON SPICE CHURROS • Capitalizes on the social nature of breakfast / brunch meals • Generates incremental sales and MILLION DOLLAR opportunity to test pricing with BACON incremental menu mix • 6.1% of customers purchas
Slide 19: Crafted Cocktails
CRAFTED Enhances the brunch occasion, COCKTAILS creating additional opportunity to attract younger (REALLY GOOD MORNINGS) demographics • ~91% of system rolled out • Highly incremental and margin accretive to all other beverages including fresh juice • Accounts for ~5.1%* of dine-in customers at serv
Slide 20: We Have a Lot of Demand and We Are Focused on Serving It
ROLE SPECIALIZATION Specialized roles to boost efficiency and KITCHEN DISPLAY throughput: dedicated expediter & beverage lead Opportunity to reduce ticket times and points of friction, simplifies back of house ORDER / PAY AT TABLE WE HAVE A LOT OF Opportunity to decrease table time and meeting custo
Slide 21: The Growth Opportunity Is Clear: Those That Know Us, Love Us.
THE GROWTH OPPORTUNITY IS CLEAR: THOSE THAT KNOW US, LOVE US. AIDED AWARENESS VS. GUEST SATISFACTION 77% 99% 97% 96% 66% 67% 65% 62% 80% 40% Source: Datassential, as of February 2024. Awareness based on consumers living in metro areas where brand has locations. Last visit in the top 2% of ‘Excellent
Slide 22: Awards and Recognition
AWARDS AND RECOGNITION 2023 Most Loved Brands, #1 Restaurant, #4 Overall 2022 & 2023 Top 100 Most Loved 2023 & 2024 Customer Experience All-Star Workplace 2022 Culture at Work Award 2020 America’s Favorite Restaurant Brand 2019 & 2020 Best People Practices Finalist 2018 Best Places to work 22
Slide 23: Appendix
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Slide 24: Historical Data: Same-Restaurant Sales & Traffic Growth, Pre-opening Expenses
HISTORICAL DATA Same-Restaurant Sales & Traffic Growth 2024 2023 2022 Q1 Q2 YTD Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Same-Restaurant Sales Growth 0.5% (0.3%)* 0.1%* 12.9% 7.8% 4.8% 5.0% 7.6% 27.2% 13.4% 12.0% 7.7% 14.5% Same-Restaurant Traffic Growth (Decline) (4.5%) (4.0%)* (4.2%)* 5.1% (1.2%) (1.9%) (1.3
Slide 25: Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS TWENTY-SIX TWENTY-SIX Adjusted THIRTEEN WEEKS THIRTEEN WEEKS FISCAL YEAR WEEKS WEEKS (in thousands) June 30, 2024 June 25, 2023 June 30, 2024 June 25, 2023 2023 2022 2021 EBITDA and Net income (loss) $8,900 $7,959 $16,114 $17,319 $25,385 $6,907 ($2,107) De
Slide 26: Restaurant Level Operating Profit and Margin Reconciliations
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS Restaurant level operating profit and Restaurant level operating profit margin TWENTY-SIX TWENTY-SIX THIRTEEN WEEKS THIRTEEN WEEKS FISCAL YEAR Restaurant level operating profit and WEEKS WEEKS Restaurant level operating profit margin are not indicative of
Slide 27: Definitions
DEFINITIONS The following definitions apply to these Same-restaurant traffic growth: the percentage change in traffic counts for the thirteen and twenty-six terms as used in this presentation: week periods ended June 30, 2024 as compared to the thirteen and twenty-six-week periods ended July 2, 2023
Slide 28: Steven L. Marotta, Vice President, Investor Relations
® STEVEN L. MAROTTA Vice President, Investor Relations 941-500-1918 investors@firstwatch.com
First Watch Restaurant Group — Investor Presentation (August 2024) on 6ix