FWRG - Earnings call 4 2023 | First Watch Restaurant Group, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by, and welcome to the First Watch Restaurant Group, Inc. Fourth Quarter and Fiscal Year 2023 Earnings Conference Call occurring today, March 5, 2024, at 8:00 a.m. Eastern Time. Please note that all participants are in a listen-only mode.

Following the presentation, the conference will be open for analyst questions and instructions on how to ask a question will be given at that time. archived and for Events be under at will News the section. call and replay available investors.firstwatch.com This I would now to Stephen like to turn Vice of the President Investor Relations. Marotta, conference over ahead. go Please

Steven Marotta

Watch's the filed everyone. and on Chief with Tomaso; Hello, Form fiscal These Financial Hope. its XXXX Watch Mel its Globe can on be morning, Officer, joined XX-K the earnings am by release Chief Executive and for annual President, documents I report Officer SEC. at Chris First issued and investors.firstwatch.com. This Newswire First fourth quarter found

Let and materially its in company's me filings the could strategies Any include that disclosure company's future with expenses. before conference these include, operations, and on statements plans from the conjunction various in first annual statements forward-looking cover Form including risk growth the cautionary Chris. will uncertainties report industry differ matters and should cause a in statements. the Such and performance release XX-K. the our to few call condition limitations, conditions, the and subject of and company's risks introducing without housekeeping company's statements actual considered earnings concerning with statements financial are that such to This factor outlook, SEC, be the statements results

future Watch or law. otherwise, update obligation as may these information, required to of assumes by new developments no a except First forward-looking statements, result whether be as

company's that, these And filed include will to references should adjusted operating release comparable Investors will non-GAAP morning. various EBITDA to call today restaurant-level Chris. and of I profit over this with in results restaurant-level contained the the remarks management's turn EBITDA profit, reconciliation measures review the the GAAP measures, adjusted earnings Lastly, to non-GAAP including margin, operating margin.

Christopher Tomasso

First we XXXX eclipsed the significant Washer with sales third adjusted our which very quarter start restaurant-level that profitability. opening $XXX fifth decade accelerating with by grew a Good finish traffic in with a company XXXX fourth marked August, and we and improved report million the passed quarter, had restaurant. year strong system-wide To positive start, along in XXXth also same-restaurant both as traffic milestones. a to sales pleased our and growth We billion to the morning. I'm versus of several celebrated EBITDA in X.X% for the same-restaurant of sales, posted in nearly $X year. was

restaurants year, company-owned the XX XX systemwide across and During through acquisitions. restaurants opened from XX to we states strategic franchise converted

prior grew total traffic revenues year-end back, better Our doubling total look count grew as high-growth from In XXXX, and up versus XXXX our more our XXXX. XX% and restaurant system-wide by total our at XX%, to position XX% window. and nearly X.X%, XX.X% year. Sticking grew XXX% illustrates respectively. revenue versus same-restaurant and Nothing brand was a XXX, sales that system-wide a X-year than count restaurant X-year in than

In growth we strengthening addition of versus to adjusted of margin restaurant a efficiency, operating XX% XXXX. our and XX% profit the yielded top which results, operations saw EBITDA restaurant-level in line

our leverage the this widen have for mover our pioneer our and These growth long-term position value early operating restaurants, critical decisions XX-year predictable deliver our are embrace of advantage, primary competitive to we believe to best customer will to But we so. our expectations course. history In that that strategic pillars do we our focus while scores consistently in First as and were Having continue our tremendous been and on superior we grown continue continue scale our that quality lean first-mover to our segment. For on execution and we that. we and believe has what the Watch We'll experience we a in stakeholders, company goals. maximize to sustained choice. performance foundational pride upholding beloved diligently of take daytime on realize moat. make that meeting our Watch logged a focusing important, and to market dining. on short, leadership We well-established and now change first and significant will in share In recognize grew year, public ever. and reason see made to also leadership We can and and intend matters, position, employer short-term and establishing is such First to that to scale an continue and creating grow long-term We we short, an growth. has delivered brand XXX is no will

multiplier our about about the our I fact, and high strategy, better I've and believe From culture, In today, felt of opportunities. additional developed cultivated. I quality we and service good the growth culinary people force the our provide. never of as feel we've is where our that of level creates they talent just stand a pipeline

It our sits low all growth below unit managers as And average double-digit strengths industry as year, advantage. both guidance each that a during we're and we high-growth continue turnover competitive key employee long-term sequentially another restaurants. members. these towards that metric this hourly domestic improved in even our highlighted of and we've for XXXX the years, throughout For is team X,XXX on quarter others for confident march in

new it identified England. that growth, New markets, to and and is our announce I'm unit our of Las these completed long-term to each the in X We've markets, potential Vegas diligence As it significant. expansion restaurant pleased pertains and

finally, during the we Pay, the at and in it acquisitions, are can streamlines coming and and addition a I'd areas and and received and breakfast are negotiations team XX areas hours. space From portability, proven and thereby for rollout of spanning that we on last new these encountered receipts, also weekend DMAs, pay month, And at decile these in XX the and states in now week to effective many New at XX our in turns. frequently table credit their well at for feature. that Apple announced in a the the are abundant Las we will card, bottlenecks come hostands, XXX,XXX by we that the no to already significantly been recently Watch franchise restaurants using code excited determined at expect our elected as front country. First white this impact vibrant markets few table on the confident the X into members. lunch completed deep we around on about testing, a as just are more Pay the so alone, seamlessly both or table and pay was completed Google new others evidenced DMAs reducing reduced our particularly experience customers company-owned our to negative especially our top overall differentiated in be like simple our Pay congestion clicks with customers offering markets Through weight share with of of Last has as technology than multiple when trade QR material Considering the our Vegas both customers percentage that from all We to front, us. use years. restaurants. is locations X growth busy peak brunch a improves England accompany are

along Pay demand. saved like front-of-house employee yet our to the table over another that at XX and initiative back-of-house functionality Assuming wait per technology KDS is with serve at transaction register, saved the we list positions X,XXX seconds more technology hours. us like customer and

approaching billion system-wide As growth which I look X.X% several acquisitions, XX%, back in delivered not than EBITDA, more of, growth on of sales our sales, operational same but $X restaurant million proud adjusted $XXX excellence, and I'm XXXX, positive in franchise surprised traffic. same-restaurant unit successful by organic nearly

front us what and we we've with is even see untapped it the over achieved. that, in to Given I'll segment already of than more potential, our leadership Mel. turn And growth market exciting

Mel Hope

good Thanks, Chris, and morning.

the higher year, finished fact, As stronger, million quarter Chris $XX.X the fourth projected. XX% than prior revenues million, we strong a $XXX.X quarter increase. than a which in shared, was fourth with year Total had were we

declined company-owned and the franchise and growth, X% Our our XX-week extra total restaurants off-premises again due acquisitions positive restaurants traffic quarter. to as First and in expected traffic traffic room the driven revenue a sequentially restaurants the improving of the dining year, was decline in during with new fourth was year an for quarter XX XXXX opened growth Watch. third franchise Same-restaurant in same-restaurant sales fiscal XX the quarter by X.X% week XX new fourth from

in costs. basis with reflecting year. costs were we combination margin leverage margins improvement Total Costs as Labor X.X%, in point the versus beverage a for sales improved were growth, costs, a the and restaurant-level winning basis food XX.X% period to count, other as of positive of margin scheduling The higher XXXX carried restaurant the beverage Restaurant and This the million and was the the of expenses head overtime regular of as last both the lower labor to sales percent food carried due other XX.X% quarter restaurant for than realized hours. by inflation and improvement impact new commodity General costs. improved fourth primarily quarter, benefit sales operating same year-over-year level also and in a $XX same-restaurant the Our $X.X basis a XX.X%. of increased primarily favorable profit additional the mix of labor administrative which to XX.X% year. fourth a XXX and the $XX.X prior increase to period a to-go fourth driving point planned approximately offset were of primarily year, profit significant associated and improvement in related better operating was for million the the quarter in costs week point lower-than-expected and XX insurance a restaurant million, X.X%. in of quarter, of reflect preparation marked headcount compared XX supply expenses additional of were slightly management compared in due XXrd result in variances other pricing were well fourth last expenses, openings. costs the with operating XX.X% in health XX.X% same in sales

quarter quarter color, were conference additional compensation. adjusted quarter a quarter operating line of in XXrd annual and of significant $XX.X Favorable fourth realized X.X% general the consideration million, cost administrative improvement margin of our XXXX. delivering expansion third XX.X%, margin the fourth profit. to the year-end Adjusted performance-based in was restaurants to leadership we fourth an the was giving and in EBITDA essentially week, the expenses EBITDA with reflecting attributed the after versus our increase margin restaurant-level For of the

during Our grew We which XX by opened added quarter. system-wide net total million XX XXrd of sales roughly which benefited model to restaurants help of quarter, system approximately $X.X our and adjusted during total and contributed million you XXXX from in restaurants lower The acquired $X EBITDA. are higher X $X the costs our million XX during excluding quarter's restaurants EBITDA. week, company-owned the XX are closure. million To acquisitions and franchise-owned, the and performance, contributed X to to planned adjusted XXXX week, XXrd revenue the $XX.X

provide to XXXX. initial our for like I'd Now outlook

XX% the excluding of in growth XX% would Of approximately and we last expected XX restaurants revenue announced in acquire the total range expect We the in the we we acquired range, impact to of from restaurants week XX% to XXrd XXXX. XXXX X% to is of be year. contributed XX XX%, the the growth the

range X% to restaurant in traffic. We growth flat negative of same-restaurant sales the with expecting X% to same are

carried week X% includes of year. X% implemented Our the last for of the growth around the and pricing sales X% just quarter guidance same-restaurant implies under price a January, in which action first in

planned We to expect closure. X and franchise restaurant company-owned XX company-owned XX of restaurants XX XX net to XX new restaurants, including to a X restaurants total with system-wide

is weighted pipeline in half XXXX, development to our QX, particular, in the Our heavily in cadence of similar second XXXX.

range year X%. inflation to restaurant-level full labor to the inflation of in X% X% expect of We and cost X% commodity

XX% implies million adjusted guidance impact of $XXX this for million range to million, after is with our year. EBITDA to to from contribute the XXXX over XXrd XX% $XXX growth about acquisitions This expected an week. adjusting to Our $XX EBITDA adjusted

the in range We XX% to expect XX%. a of rate tax blended

expenditures capital the million, acquisitions. including $XXX expect capital to allocated to franchise We not of million $XXX the

While XXXX, of across we restaurant slow number markets a not do are to unexpectedly Like warrant many in a of other start of harsh factors particular have year. play guide attention. noted in first companies quarter contributed our the results, which weather to to quarterly the

XXXX of also comp are a up were the months We formidable as against X strong. especially first

reminder, of through first same-restaurant X.X% year, a last the sales positive traffic our XX.X%. same-restaurant As positive X and were was months at

week to basis year mid-single hundred These trending While taken segment digits have guidance. into January improved this Black is effects a Watch's in case, historically Christmas than February year's that account challenging appreciate New understand. year. down our according week traffic fiscal the to is productive several Box, in the our XXXX our versus was which be the full the We entire points First and been traffic XXrd trends year-to-date. in of higher In can Year's, most is one between of XXrd same-restaurant and week weeks

of remain EBITDA of prospects. in isolated We and combined below these the the confident that least will below growth to XXXX EBITDA the weeks time, expect be few at same XXXX dollars last highly due we to year calendar only an comparison the first this year, adjusted a slow million which QX week circumstances the So given prior adjusted quarter the our are moved start out the effects the be first we to year. of year. quarter, At for in the few of expect first the quarter shift, with

financial mid-teens. we're such, the double growth and long-term our adjusted EBITDA digits, of growth restaurant sales including sales in reiterating low in As unit the annual percentage X.X%, around growth percentage same-restaurant targets,

the quarter, website beneath our Investor on open please the webcast link. supplemental line on details further operator, materials fourth our deck For And questions. Relations for review our let's

Operator

will We assemble momentarily our pause the Instructions] session. At will this question-and-answer time, begin to roster. [Operator we now

from The comes first Vaccaro question Raymond today James. Brian with

Brian Vaccaro

improvement on for maybe turnover? could you the line, I just prepared follow-up put you're a Could you're we of key guess, some you saw in operational And Chris, just, Sure. then the to and had little speak and some context achieving, fourth the me. you're remarks, here provide And that the seeing? in labor your the within metrics on bit on quarter. highlighted margins excellence specifically, that you a the some more strong you I efficiencies that metrics of seeing up obviously

Christopher Tomasso

question, thanks Brian. So it. for appreciate your I

think dashboards, scheduling, business area a do been tools talked projecting has new that scheduling biggest new labor. just use about better I we success our then effective to in the in about predicting recently contributor operators put and job it We've to scheduling. around that and our tools place, intelligence to of labor for

kind So of we've early from benefited that we're of greatly, in the too. and that, innings

look different So visibility, and of only regions, in which but at not the it. stack restaurant-by-restaurant all ways we're those across ranking we and

eased great have Operating job. team Jones, Dan we obviously, Now Chief his our inflation. Officer, and And then just done from benefited a

that operating with the level as So profit margin helped restaurant well.

John Jones

our the might year. as fact record And the we about was through Brian, the you remember talked month in that and declined year, of third quarter, we during the month, month, great every continued on there period that saw had turnover over year, continue had the track labor every that through quarter fourth the

always continuing our for rest better than Jones returned only been So kind of not always of our of Dan has That's down. our to factor turnover a the the terms rest team. to is advantage of his real I or doing to bit we've think the been peers. category, it operating a little an in system success now work And normalcy and but of we're

Brian Vaccaro

of management And however, It's side? I would the turnover while, that could update find it us you a my on But been in kind little or on are, you where maybe. metrics your hourly measure notes.

Christopher Tomasso

Yes.

for we the talked and thing but a quoted turnover, most category. generally I in been the crude house much year. the of can't typical front runs XX% bit of the of if has the labor -- has about higher. management under fourth I XX% little think run we've quarter back typical remember It publicly the us -- dropped during has turnover, which Our -- historically often house

Brian Vaccaro

Okay.

remind versus on you the or within that lapse just off-premise any And you there. dynamics. frame the us of over are way changes part And Okay. kind sales sequential may I any seeing on how can off-premise execute guess dine-in about thinking dissipate? Great. a then Just you follow-up that, that the that the any last you channel? be that in off-premise made 'XX Is year-on-year of when there as And headwind you X? side, week-to-week of and could of think quarter impacting stability

Mel Hope

But percentage fact to started don't you it's from what So what -- know we XXXX, is the see we half playing that about execute, changes -- we've that off. and that off-prem. begin I the talked in we the of see might is referred this that should about terms startling had to in the that the of third through down, that tick quarter begin remember, expectation our back of that there's year, we've in to the continued again, we full year. way to have that's any

So know the a of to believe that to there exactly half to a in going seems right little we're new bit level back it's seeking year. It what the is. be but home, we difficult of get the

Operator

from Bernstein The next question with comes Barclays. Jeffrey

Jeffrey Bernstein

as Two Great. questions well.

is attribute tougher it, point first EBITDA. as on you XX% and acquisitions, just week guidance at maybe of just pile franchise of you larger perhaps the of just broadly, XXrd becoming a to base. Again, rates wondering the below The of the because a are the the the compares with whether outperformance from I'm first in guidance. getting adjusted you just hard to long-term comp but would because nuances the growth look Or one -- 'XX? whether the just read and are the increasingly the long-term that challenging algorithm

to again, sense and for algorithm. the trying to your get a Just long-term XX%, broader 'XX of view relative

Christopher Tomasso

those exceeded last the on just there's any quickly, but that into that guidance. last targets of And I the accuracy of that and there's our delivery don't any set our us think well don't think for part I -- -- the about we to. It's plenty the think long-term grow are guidance. opportunity what we few the I aspire hesitation long-term years question, of our I the enthusiasm think real that. to has course over and there's

caution that the we a I the the period quarter slow week. broke start, a as We first shift than this we know XXrd have hoped. in things would the slower our of attribute got the or we just gates lot to first I we year's of think guidance, -- of bit that had identified out that the little part

reason But pause. any some us to be that won't gives that long so our guidance I term. realized don't have And long-term believe

Jeffrey Bernstein

just or a the in you the the that you the have I terms you about, then think And obviously technology follow-up, it think that would of a what the benefit a of of is opportunities, you you about be unlock? to said as I comp technology which XX lot And similarly, Understood. talked is turns? say how at would a docket system? do say meaningful what on hours. is but could know But next table, pay seconds, table you big next lot saved that the

Christopher Tomasso

We're friction looking either employees. our reduces Yes. that for constantly technology at

are in customers the table pay both. to case Our of

As time to like focused things and to is we're that, an you peak whole us a more give I'm the we're sales serve KDS out, we on. which is after comps that and really what this that's to in our going meant at far demand gave allow it rolling hours, as element toolkit into tying deploying on answer same

to these not play example, employee as table, doing be and to the do from and But then there's you, us. and customers really that that restaurants repeat our a X,XXX to to there frustrations programs, more that is. really their for thinking which relates removing at a journey as get And about benefits solution tool, hear Not us. our we're business it on think are long-term main immediate pay the experience impetus ability for we improvement leads to ability so our experience it we to with honest with for customer we is it's

pain KDS, can That's we Anything we how look that us what we it. we're a it's to told looked at the how consumer at waitlist is address at that's point. how our do has So looking management.

Jeffrey Bernstein

so Got the clarify, lastly, quarter. in just just it. is much you mentioned noise to as because And now there first

in the than look all you quarter, like which is quarter, As the for data sense it year? settle due better the kind at guys you Or behavior improved is sounds the consumer caution move third more January. in out from the the or the fourth sounds But that months it first and just more worse? change that any recent do like should there's February of better half recently first unusuals for through to as for we of

Christopher Tomasso

is Yes, -- I this think Chris.

in-restaurant the our things very at traffic, look and it's average. our also think dining per-person It's are we encouraging. I

So the than our check we've taken. is that higher price

restaurants. key for restaurants them us. the Those signs we're seeing they're in We're for our experience full the our come So when up consumer seeing are to more.

As will point, settles we've to it And talked know in off-prem settle we once where we'll about, get that in. the it.

the We year, the from signs do we this second has in the expect with half like in the into little a we're our what and consumer not of that's -- Everything in January caution really that Mel to bit behavioral signs But February. that any guidance concern. experienced seeing about. that specifically talked has

other consumer. So our we're full seeing we're guidance with and also year the that, in confident very what than

Operator

from Andy with The Jefferies. question Barish next comes

Andrew Barish

Carolina the I similar the is contributions an performance franchise us of you anything should if of mean, there those the and kind timing of aware in you've Or North of on to the of? update there could from be that acquisition they we give seen Wondering kind historically be acquisitions. restaurants. would

Christopher Tomasso

the know, the that number leaders the restaurants closing range among quarter The Currently, of are of early perform rest are the probably a our but of restaurants sales of there we're X%, part. group top XX% system that that There are like in a system. for operated real in both targeting They for number terms restaurants are in franchisee by profitability. most the in a have system, I second that the are don't and the transaction.

Andrew Barish

I just gotten kind franchise you've wanted lot just a left the then acquisition growth. for how additional theme. recent many And DMAs historical under? you. repurchased XX to of the franchise deals your carrying that acquisitions these And agreements under Got from you've clarify, on of

Christopher Tomasso

We just a have of options. prenegotiated have we franchise -- that would groups couple still

think I have them of they're each XX. fewer -- than

Mel Hope

North them. after -- have of franchise on we XX acquisition, XX options we'll Yes, Carolina the have and restaurants, we have purchase

Andrew Barish

And wanted Got the DMAs, additional then kind XX acquired is I just clarification, rate a you've the you. couple last that of of in that now territories years?

Christopher Tomasso

Yes.

So that corporate the these those DMAs restaurant to addition we with are are come in markets that that growth the acquisitions country. have throughout the

the to And where we the open take franchisee those more before part obviously that as markets, franchise So had our back rights those, company-owned potential that grow size the our we increases in scope ability of to restaurants. then for acquisition. and and

Operator

next comes Brian Piper from question with Mullan Sandler. The

Brian Mullan

and a that are around talk what your with and more about more belt, over with are initiatives now? to maybe mix where seeing business? continue the happy it's Just And you any some you time time initiative. for broadly question on Maybe drive doing strategies or alcohol just that right just just to higher the

Mel Hope

between mixing in and It's Yes. the X% system. X%

creativity that I the actually just out innings still think think -- platform we're you'll I for in come see as of that. over there And that early exploiting of time, is us. new much

seen, our our entrees our shareables our execute line LTOs juice. you've fresh As on teams on our on on

-- another platform gives us they our gives it So to that offer customers to us those begin that additional want. things it

Christopher Tomasso

food we're an that alcohol forward concept, a is not thing other I'll forward concept. The say

standpoint, as for said, us us. because that think do innovation what And we because marketplace comparison for we haven't that juice not. really yet have of you fully I the element right is We'll we the tell there Mel leaned out I matches a that we'll we're the there in don't I'll right optimize around finding think from whether So us. platform, And but for what's it added it into what's will. balance the program. or

So beverage we you as think that attachment the last goal is our drinks launched our cold when out those that year, up is up. X see to caffeinated like the get alcohol, roll combine just new beverage beverages you I overall we like that's things, incidence and

Operator

The Senator question next America. from with Bank Sarah of comes

Sara Senatore

a a The is markets. had quick and question just I the clarification. question new then about

New are and England. to and make always tended that. England have Vegas up also and New from Northeast higher away know Las mentioned shy just I for because You restaurant costs the other volumes don't companies

how curious So of on I thinking was about guess new your going you're volumes in unit forward. thoughts terms new -- I the

been bit this year, higher they've little think actually a we had I maybe anticipated. even than

if out stores So to you about highest the what that possibly whether that could as then entering perhaps is more have think newest volumes, have you clarification. then looks keeps you? And markets, competitive just like happening? just the And I a

Christopher Tomasso

Yes.

I for market into goes think of new haven't entering we diligence in with And us, a extreme amount So fact, Chicago, since an process. because XXXX announced markets. diligence new and it's of that

you won't our sacrifice tell the and will around markets, just to disciplined that we we our criteria return these and from characteristics on that. stick I'll think like I specific standpoint So of things approach

have our differentiation others our markets believe of looked opportunity offering. of so there that that wouldn't. believe these at those And that an will maybe We that because that are both for we've markets. in extreme We ready do

going come Obviously, And or urban and into really volumes, for we excited we Vegas there. high that the predominantly Las with enter so the known centers. before also we about And we're city challenges first the know in is -- New mind keep suburbs that go England. areas

characteristics speaking build of, where Sara we And then the we of markets the build trial. are you're into so brand that some up recognition, go maybe prevalent. And up more we that

excited come even we're traditional markets type don't very example lunch bring exist predominant brunch gone we something we where it. markets an other consumers an those diner breakfast the breakfast, market. And there. we into then open. a about occasion So of execution Philadelphia think I until We've is And in before. I'll elevated and use as that what's in know

in we've these so always that's field as us think what And And markets about And a there's get on our from with I also being sunflower standpoint. we there. shining when very competition experienced. us in sun I talk little in a the

we're again, pretty it. So about excited

Sara Senatore

you just it it to was the to brand the CapEx talked that on then the feverishly And of creep build returns And volumes if higher from new you settle of sense. there? keep point. up? see trying about. actually was But your kind largely any going such you estimate the clarification portability Makes cost. settled is I are in might continued just seeing to Or that speaks down unit inflation

Mel Hope

to spending but We're settled. We're component, at to X I -- restaurants so, more restaurants. are. last haven't bigger looked in our inflation seems the volumes the in footprints we're them The most and getting that higher do it's or would months have as I -- it outfitting it of sites have think I

we have But we And third minute don't Chris a ago, so those pay criteria. underwriting costs used expectations the for -- compromise that are we our return. mentioned the as still year more We than on to restaurants. same

so we're so more. we an more all terms if seen in and that way return, or top than seen haven't expect get them, the we performance sites shift of more we haven't And degradation approving through the investing and pay footage there's shift where because if that we're line just more adequate square for any in the any

Sara Senatore

then thinking a few up the inflation you I the might in earn as just that years. of after continue go, Right. returns if sort last understood. or meaningful has denominator, the of see those period volumes even stabilized slowed on was your inflation creep I actually to

Mel Hope

different a -- space. to opposed in inflation, you amount to saw as additional have I if to Yes, a in But of inflation our as order lot would investment have return. be say, we significant drive of, elected more floor substantial equipment or would it think, to it a be great

Operator

The comes Charles Cowen. Andrew TD next question with from

Andrew Charles

just Mel, questions. couple Great. model a of

up Is that guidance, First, Is X.X% what's think sales, XQ to it right kind same-store to XQ, think we offsetting about be is XQ for sales notable think it that within our same-store headwinds. the XQ? the cadence fair through of to you caught is fair the going that year?

Mel Hope

trying question get decode again? trying Could you're you that ask at. to to I'm what

Andrew Charles

Yes, sure.

the to offset closer to ongoing that. XQ, just I'm thinking algorithm. through expect XQ XQ So to be X.X% It's is

Mel Hope

for here. right modeling roughly dispute wouldn't I That's it. probably

Andrew Charles

lumping eggs. to Within really to inflation, egg potatoes Great. X% your commodity XXXX? also And I I about how X% then what's prices hedged know Okay. for and anticipated with ask just eggs wanted prices. for in you're

Mel Hope

Yes.

I of year. to beginning potatoes, about we those prior talked we and eggs before, So the think the prices fixed

price we that data in what from portion front contract. much those and potato of in of about or inflation don't don't is know prices separately commodities alone. market the how I eggs don't that we've me. I rest know talked have have there the I a fixed So And basket. particular of that X

Andrew Charles

price, to on you for inflation X% increase. And X% the within X% price set taking Is given about the Okay. be midyear. year talked you guys -- assumption price seems it that from guidance with January is for and around won't you revisit Typically, around guys like just the then this labor the X% price X% to commodity pretty the side, expectation midyear?

Mel Hope

about the been pricing We do year. are and you know, the our look have price. the inflation don't as middle of estimates visit at taking talk of not accurate. or actually -- whether We running in We year for things advance cadence typical to how in our is

So yes, this include of But call. we our on revisit. as we it part don't guidance

Operator

The next with from Jon Tower comes Citigroup. question

Jon Tower

curious, for regarding But the year. back here. Mostly transpired the a obviously, just remarks I'm follow-up goes that and just expectations, flat purely in comment to what's on, in negative going prepared of quarter the first year that's to the reflection to the as the the going traffic improve? Is

Mel Hope

You bet.

to hole, we're I the the and in the start going be we of balance for think think out year. I clawing

Jon Tower

back markets New and up the come England, [indiscernible]. to Perfect. I'm guys specifically have new going Sara's Okay. in excited And regarding question to the Cool. you then

a curious expect kind the other that hear bunch of of on So to relative you've bigger should thoughts stores we the is Vegas? theme of there your you in is anything of that And prototype costs to restrict adding perhaps up of from address adjust a what been units I'm need here? But markets building footprint that to kind in there continuing to in would that's and England got some order markets? great. New in you've bigger higher Or a other

Christopher Tomasso

end that x I and In else. we things of a caps amount have find that. really can everywhere amount and other mix site-by-site the we we x honestly. stand-alones decision like mean, believe words, of It's

why it's have look don't consistent So markets. wouldn't any fairly really see of but we in these we site-specific a at, reason balance prototype that we executions

Jon Tower

over going a it. to consumer collecting or point little at you're believe the Got to a that considering about curious for on platform some And whether just on brand? the what that table. at in quite time make thinking bit you're that not I term get stores, the for probably now have then paid would KDS more you've you've just unlocked appreciate technology up and at collect learn loyalty back, them the that or information with that. thoughts this more you bit of I'm got time. longer pay Does now line especially the option you table, sense and and your a the

Christopher Tomasso

Yes.

be will I loyalty. do different launching with want additions pleased we customers. talks I us, relationships the our made that think at as and that itself the we've with brand when loyalty filters to talked the with about look tech our kind the relationships And not these We a I do I we'd we under about see that soon, industry anytime we're our the way it. customers, why things. have stack, we manifest way earlier in of don't something about it certainly to have for But in think.

Operator

The next O'Cull from with question Stifel. Chris comes

Christopher O'Cull

first we maybe I set the level just on was comp. quarter everyone hoping could just

seem traffic was basis maybe which around you're Is would expecting quarter is X mentioned first pricing that I flattish through comps. mid-single of points and You periods. X% mix, first about down And to digits the roughly right? X think imply

Mel Hope

No.

than to Our something have expectation is better flat.

Christopher O'Cull

Okay.

helpful. off-premise last off-premise? improvement That's of Can average quarter. is, help than Okay. overall the looks check how much the question was traffic like then understand sequential it year-over-year was in versus us you And next negative less is sales it equal

Mel Hope

me. add website, figure it can out. of we I in in. it to don't suppose. front the dig something that have have I if don't I think I We it's can helpful, try And and

Christopher O'Cull

there takeout off-premise? either Has any it traffic traffic comes to stabilization delivery noticeable when been or in

Mel Hope

some ticking kind gap. say, of the closed stabilization, downward, would it's still it's is I There but

Operator

question-and-answer Chris remarks. to back would our like to over I closing concludes turn conference session. any This Tomasso the for

Christopher Tomasso

for Thanks your it. We thoughtful Great. appreciate questions.

the just growth We're First close, is really of year. to beyond. a take and in XXXX a the express every days First brighter want for for you we result looking entire I appreciation forward The delivering experienced Watch to XXXX a we minute customer. Before Thank making Watch direct fantastic same to team for in you.

Operator

The Thank now conference concluded. for today's presentation. has attending you

You may now disconnect.

First Watch Restaurant (FWRG) 5 Mar 242023 Q4 Earnings call transcript