First Watch at TD Cowen Conference: Strategic Growth Amid Challenges

On Tuesday, June 3, 2025, First Watch Restaurant Group (NASDAQ:FWRG) presented at the TD Cowen 9th Annual Future of the Consumer Conference. The discussion, led by CFO Mel Hope, highlighted the company’s strategic goals and challenges. While First Watch anticipates modest traffic growth and robust new store performance, it also faces margin pressures from commodity inflation. The company remains optimistic about its future growth and customer engagement strategies.

Key Takeaways

• First Watch expects flat to slightly positive traffic growth in 2025, with improvements in in-restaurant dining and third-party delivery.
• The company faces margin pressures due to commodity inflation, particularly in eggs, avocados, bacon, and coffee.
• First Watch is targeting a 10% plus net restaurant growth, supported by a strong development pipeline.
• Marketing strategies are increasingly data-driven, aiming to personalize customer interactions.
• The company is funding growth with operating cash and only borrowing for strategic acquisitions.

Financial Results

First Watch’s financial outlook for 2025 includes:

• Traffic is expected to be flat to slightly positive, with April showing the best trends since 2023.
• Margins were under pressure in Q1 due to inflation and higher healthcare costs, but the company targets an 18-20% restaurant-level operating profit once restaurants mature.
• New stores are opening approximately 10% higher than the system average, aiming for $2.6 million in average unit volumes (AUVs) by the third year.

Operational Updates

The company is focusing on several operational strategies to enhance performance:

• Marketing efforts are more targeted, leveraging a data warehouse and various advertising channels.
• Relationships with third-party delivery platforms have been optimized for better performance.
• Initiatives like the "Surprise and Delight" program have increased portion sizes to enhance customer satisfaction.
• Speed of service has improved through data-driven operations and the use of kitchen display systems (KDS).
• Employee training is emphasized to maintain efficient operations.

Future Outlook

Looking ahead, First Watch is confident in its growth and development plans:

• The company expects commodity inflation to be transitory, with potential relief in egg prices in the latter half of the year.
• It aims for 10% plus net restaurant growth, supported by a strong pipeline and a diligent development team.
• Growth is primarily funded through operating cash, with borrowing reserved for strategic acquisitions.
• First Watch acknowledges the fragile consumer environment but aims to maintain a strong value proposition.

Q&A Highlights

During the Q&A session, several key points were discussed:

• Traffic trends are positive, driven by improvements in in-restaurant dining and third-party delivery.
• Margin pressures from commodity inflation and juvenile margins in new restaurants were acknowledged.
• The marketing strategy is focused on targeted efforts using a data warehouse and various advertising channels.
• New stores are opening at high volumes, surpassing AUV targets.
• The company expects most inflationary costs to be transitory, with potential abatement in egg prices later in the year.

First Watch remains committed to growth and innovation despite current challenges. For a detailed review, please refer to the full conference call transcript below.

Full transcript - TD Cowen 9th Annual Future of the Consumer Conference:

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Everyone. I’m Andrew Charles, TD Cowen’s restaurant analyst. Today, I’m joined by Mel Hope, the CFO of First Watch Restaurant Group.

Mel Hope, CFO, First Watch Restaurant Group: Good morning.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: First Watch is the category leader in the breakfast and brunch daypart, differentiated by a limited menu with a focus on wellness and freshness and one operating shift from 7AM to 02:30PM. With nearly 600 US locations and aspirations to reach at least 2,200 locations in The US, the concept has white space opportunity nearly quadruple. Lastly, as we tee this off, I just wanna mention that we really appreciate your participation in TD Cowen’s Future the Consumer conference event. TD Cowen values the annual Xtel, formerly II Investor poll, that’s now open for balloting. So with that, we’ll we’d really be grateful for your recognition of a five star vote for TD Cowen.

So Mel, with that shameless Little

Mel Hope, CFO, First Watch Restaurant Group: bit of commercial.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: With shameless plug out of the way, you know, maybe we can just start it off, you know, just would love to learn more about, you know, the 2025 sales guidance. What I think is unique about FirstWatch is that, you know, you have aspirations for flat to slightly positive traffic, which not many of your peers in the industry are aspiring for. And so, what’s giving you the confidence in returning to this performance?

Mel Hope, CFO, First Watch Restaurant Group: Sure. Well, our traffic was under pressure almost all of last year and actually beginning last year, but about the third quarter, we started to see things begin to turn, particularly our in restaurant dining was turning. We also enjoyed an increase in our traffic associated with our third party delivery, which has been for us something that’s sort of been trying to find the right home. It’s a new sales channel for us. But that has become, contributed more positively and we also know that we’re, you know, we’re bringing online more and more well performing restaurants.

And so I would say those things give us confidence that we’re trending in the right direction. Since about the third quarter of last year, we’ve been trending trending more positively overall. But moreover, I mean, Andrew, you’ve been you’ve been following our stories for since before we went public and you know that the company’s bread and butter has been growing its customer base, growing traffic year over year over year. And so it’s kind of part of our DNA to just continue to grow. And now we’re marketing into some of that growth and all of those things are healthy signs for us.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Awesome. Okay, that’s a great overview. Before we go down to some of the exciting stuff that you mentioned, traffic trends in April were the best they’ve been since 2023. But you called out that margins were off to a slower start this year. So, you know, as we think about the balance of the year, you know, how are you balancing the two dynamics of driving traffic but also doing so at a healthy margin?

Mel Hope, CFO, First Watch Restaurant Group: Sure. Again, as you know, we tend to view pricing as something we need to be really careful about. Our typical cadence is to look at pricing early in the year and then again at mid year if we have some course correction. Our margins have been under pressure. We’ve seen a lot of inflation in our four most popular commodities and as a result, we look at that inflation and we say, is it transitory or is it permanent?

If it’s permanent, then we take that under consideration when we make some adjustments to pricing. But if it’s transitory, we think it’s our commitment to the customer to be sure that we’re careful and that we’re there every day with a value. And so we’ll take some margin hit and we have, but we believe that most of the pressure that we’re seeing in those four commodities, the eggs, avocados, bacon and if I said pork, those commodity costs we think are more seasonal related or they’re things that are beyond crop related, that sort of thing. And so we believe that they’re transitory and that there will be a return to a more normal environment. Coffee was the commodity that I, excuse me, that I skipped over.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Okay, great. I want to dig in more in a little bit into the margin picture. Maybe first, we recognize, you know, your ability and your going on offense here. You know, what are some of the examples of the changes to the marketing strategy this year that are proving to be most effective? You did a lot last year that you tested, and this is the implementation this That’s

Mel Hope, CFO, First Watch Restaurant Group: right, and it really goes back further than that. We’ve been really excited about our data warehouse that we’ve been growing for the last few years. And the company has different sorts of avenues that we capture customer information, either people on our app or logging into our WiFi or their credit card tokenism. And over time, we’ve developed a pretty robust dataset for our customers. Last year, we began to pilot some kind of a variety of different approaches and they range from direct contact with those customers as well as social advertising, social media advertising or connected TV advertising.

We also did some geographic work, you know, around restaurants or around restaurant communities that would generate, you know, more visits, more transactions. So those pilots kind of gave us a set of things that to which we would invest now. And so as looked at that, we’ve applied them to certain markets. Every restaurant in the system is getting some sort of marketing support, but we’re emphasizing it in certain markets, where we’re really trying to drive traffic with that more direct contact and we’ve also expanded our data set with external data that’s available to us, which allows us to tailor the contacts with customers for those whose data is not in our systems, but may have already expressed either an interest in the daypart or or or an affinity for breakfast, and we can help, you know, with our with our approaches to them, you know, kind of tailor that so that they have a reason to visit First Watch.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Yeah, when I think about this, I think of it as more kind of, I don’t want say gorilla or grassroots, but it’s very targeted in terms of what you’re doing. I guess the question is that with 600 stores now and visibility 2,200, is TV advertising something in the long term that you have your eye on, or is that more just now? We’ve got the strategy right now and this will evolve over time.

Mel Hope, CFO, First Watch Restaurant Group: I think the strategy that we have now will evolve over time. You know, we will see, But, you know, even as traditional media has evolved, I think the way people consume media now, consume advertising now is evolving just as fast, if not faster. And so, I’d hate to speak for whether or not, you know, broad based media advertising would be in our future. For us, it’d be pretty inefficient right now. We’d advertising in a lot of markets where don’t currently have restaurants.

We’ll be there eventually, but right now there’d be a fair amount of inefficiency associated with a broad based Makes sense,

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: absolutely, okay. And then how would you describe the efforts with Marketing 2025? Is this more increasing the level of ad spend? Or is it more just changing methods to improve, you know, your return on ad spend?

Mel Hope, CFO, First Watch Restaurant Group: Little bit of both. I mean, we’re definitely spending more on marketing now or allocating more of our G and A dollars than we have in the past toward marketing. So there’s been an uptick in spend, but it’s also more targeting and I think, you know, more optimizing either what we’ve done in the past or bringing on some of these new means that we’ve piloted last year and say, hey, we believe that’s gonna work.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Great. You talked a little bit ago about the challenges last year with third party delivery. You know, great to see mid teens traffic increases in 1Q after that big headwind last year. You know, what details can you provide on the partnerships with the third party delivery platforms that’s led to this kind of rebound that you’re seeing?

Mel Hope, CFO, First Watch Restaurant Group: Right, so one thing to take you back on is that, you know, prior to COVID, we didn’t have a third party delivery program. So it has been relatively new for us and we’re still proudest of our in dining room experience. I mean, the service at a First Watch, the in dining room experience is really our, you know, where we’ve cut our teeth. So we’ve had a lot to learn over the course of the last four years or so. What we have done, you know, in terms of changing, it’s really kind of optimizing the relationship overall.

There is some cost associated with it, but it’s also behavior, it’s also having a better relationship, being a better partner with our delivery partners so that they adjust both their marketing and the emphasis on our brand and that we understand each other better. So in terms of details, what we’re really trying to do there is to do it the right way for us to be a good partner, to understand their principles and for them to understand us more. And that’s paid some immediate dividends.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Yeah, okay. Let me transition now to marketing, I’m sorry, to margins, excuse me. So we started off the conversation, conversation, there was some margin surprise in 1Q results that you guys were very forthcoming about. You know, how would you rank order what weighed on margins the most in 1Q versus, you know, which of the headwinds you would classify as kind of transitory versus not transitory?

Mel Hope, CFO, First Watch Restaurant Group: So without question, the biggest factor was the inflation and what we experienced in those commodities I mentioned earlier. I think between that, we had some higher healthcare costs period. We’ve been promoting enrollment in our healthcare programs and then we had some higher healthcare claims which also were unplanned for in our world. But the biggest driver has just, has been that cost. The other thing that you saw in our first quarter margins is really the large number restaurants.

If you think about a First Watch restaurant, their first one hundred and twenty, one hundred and fifty days or so, they have juvenile margins. So we’re trying to get every restaurant you know, to a full margin is generally somewhere between 1820%, maybe a little bit higher than that. In the early periods, those new restaurants have large crews, they have a little bit more waste and they’re operating with more juvenile margins. Well we had, I think it was 33 or so restaurants opened before the end of the first quarter, between the fourth quarter and the first quarter of this year and many of the ones that opened in the fourth quarter of last year were opened toward the end of the quarter. So the most juvenile margin periods were all in that time and because of that large number of restaurants, not only that, they’re very high margin, high revenue restaurants.

So they kinda over index against the overall margin. So as a consequence, with that large group going through, there was some impact to the margin just by having a large number of new restaurants that are doing quite well, but they’re growing to maturity.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Okay, okay. Earlier you mentioned that you’re evaluating price twice a year as the historical cadence. You know, as we approach the next time where you typically take price, you know, how are you thinking about it?

Mel Hope, CFO, First Watch Restaurant Group: No different. Our thinking is that, you know, the crop related inflation that we see out there is, you know, we would not expect that to recur. So that would be transitory. We think that they’re, you know, we’re having a good experience in terms of avian influenza not surging like it did last year several times, which means that there should be some abatement in overall egg prices as long as there’s no, you know, no lift in that area. So we’re taking most of the inflationary costs unrelated to tariffs, whatever those might be, as mostly transitory and as we sit down, we’ll begin to think about which of that we think is more permanent.

Okay, very good. Let’s spend a minute

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: on the commodities that we’ve been talking about throughout the conversation. Beginning in early March, the spot wholesale egg market fell dramatically. I like the fact that you’re embedding commodity inflation persisting for the majority of the year. You’ve talked about how your eggs come from more mature birds, larger eggs of course. You know, how long does it usually take or would you expect it to be until you see the benefits of spot markets, you know, prevail within your own business?

Mel Hope, CFO, First Watch Restaurant Group: At the current trajectory, in terms of the flocks replenishing, and I should say, we are really finicky about our eggs. I mean, our shell in eggs are extra large or large cage free pasteurized eggs. And the number of birds that actually can lay those kinds of eggs is a subset of the full flock. So until we can get to those mature birds, we have to be, you know, we’re getting a good bit of the market that’s out there in our own restaurants. So I think that the, you know, our expectation is that in the second half of the year at the present trajectory, there may, you know, the flocks may be more, you know, at least closer to kind of full US flock and we should see some sort of abatement there.

That’s certainly what we’re, you know, that’s certainly what the latest information is that we’re thinking. But I have learned to be conservative about this in the last couple of years. We have had resurgence of avian influenza for the last three years and it’s becoming more and more profound. And so we’ve taken a pretty conservative approach at trying to consider it in our own projections.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Yeah, it’s a good plug for 10:30 in the morning, talk about how the fit you guys are with eggs, by the way. We’re at peach brunch hour right now, so

Mel Hope, CFO, First Watch Restaurant Group: that’s great.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Okay, super. Maybe we just touch on the other commodities as well. So outside of eggs, you know, coffee, bacon, avocados, obviously very inflationary so far this year. You know, how are you thinking about, you know, inflation for these being transitory versus reaching a new run rate level? Right, well,

Mel Hope, CFO, First Watch Restaurant Group: each of those, or at least coffee and avocados were more crop related. And so, you know, the expectation is that there to be a more normal cycle on those. Coffee is, excuse me, pork has been pretty unpredictable. It’s kinda running counter cyclical right now. And there’s probably smarter people to talk about pork from, than I do.

But I would just say that of those three, we do expect that there is a more normal climate out there and nothing that we’re seeing in those three commodities are, would be a permanent type shift in the market. They’re certainly displaced right now and has been, but I think we should see that return to some sort of normalcy.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Yep. This question kind of straddles sales and margins, but I want to talk more about the Surprise and Delight program you started following the 4Q annual conference. So I guess can you share with the group what that is? And my question is would you expect this program to persist at the current level it did in 1Q or have you been trying to dial it back a bit?

Mel Hope, CFO, First Watch Restaurant Group: So it really relates to a couple of things. One, and neither of which are things that we don’t do every year. They took more attention because the effect of them was somewhat exaggerated because of the cost of commodities. But two things that we did. One, we had a little bit of a pep rally for our managers and they said, look, hey, look, when Andrew comes to the restaurant, Andrew’s a regular customer, maybe the right thing to do is to is to say, you know, have you tried our, this new juice that we’ve come out, we fresh juiced our, you know, our kale this morning.

Why don’t you try our new kale tonic or something like that. That’s kind of our version of a loyalty program. We don’t have a loyalty program, but for a manager to go to a regular customer or a regular customer’s family and to give them a complimentary side or something like that to encourage them to return. I think that makes a statement. It’s a long term investment.

I think even you, cynical as you are, might be might be impressed by that. And and our our managers embrace that in the in the first period. And we don’t we don’t try to throttle it. We you know, we help them to you know, use it a little bit more judiciously. But we encourage, I mean we encourage that and always have.

That’s not a new a new thing that our managers have been able to do. But we did encourage it and I think it’s a good time to help us develop loyalty. We also, in terms of delighting our customers, we also increased the portion size on one of our most popular entrees. We doubled the the portion of bacon on what we call the trifecta. We doubled it right at the time when pork prices spiked and and customers continue to enjoy that.

So that’s a, those are permanent, those are permanent changes. I think in an ordinary time, those sorts of changes that we make don’t draw a lot of attention. They were part of a pool of things that we do constantly to help stretch out our lead in hospitality and customer service And I think it’s the right thing to do for our guests. So I don’t expect it to abate some even though we may be, you know, we wanna be careful about doing the right things for our customers. Okay.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: It’s a good segue to my next question. Mean, was the portion investment in the trifecta, was that kind of a one off or is this, you know, more to come as you evaluate, you know, doing this to other items as well?

Mel Hope, CFO, First Watch Restaurant Group: In that case, was a, in any one of the, in any case like that, it’s generally because we see an opportunity or see something that we feel like we need to do as opposed to a part of a program to continue to do that.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Okay, got it, okay. Touch really quickly on development. Know, one of the hallmarks of the First Watch story is a long term algorithm that calls for 10% plus net restaurant growth, which is you know, amongst the highest in the full service category. Can you talk about what gives you confidence in your pace of growth?

Mel Hope, CFO, First Watch Restaurant Group: Sure. First of all, our pipeline. I mean, I’d say again looking backwards, we’ve invested more and more in terms of talented people. We put more people in markets. We develop more relationships with commercial developers in more and more markets.

Over time, we know we’ve got a lot of green space and the ability to grow to over 2,200 restaurants in the system. And so, as I look at the pipeline and our development team who are constantly, look, I approve, I’m part of the team that approves every site. You know, this year is for us pretty much spoken for because we start eighteen, twenty four months in advance trying to bring a project to maturity. The projects that we’re looking at now and are approving now will open next year or even the year following. So our development team led by Eric Hartman, they are very thoughtful and data driven about the timeline to get to an opening.

And so I think because of the, you know, as a consequence or a reward for their diligence on the upfront, you know, it’s a pretty predictable range that we have overall on projects coming to maturity.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Mel, you wanna spend a minute as well just talking about what you’re seeing with the new store economics? I know you shared some pretty compelling data points in the last call around the performance you’re seeing with new stores. In new store, like you’re seeing, you’re

Mel Hope, CFO, First Watch Restaurant Group: looking at, New stores are opening up. They’re about 10% higher than the system average. We underwrite them to get to about 2,600,000.0 in the AUVs by their third year of operations with a restaurant level operating profit about 18% to 20%, which generally pencils out to something like 30% to 35% cash on cash return. Most of the restaurants now are ahead of that $2,600,000 pace. They’re opening up at real sterling volumes and they’re growing rapidly.

And so as we continue to open the restaurants, improve our site selection, It’s a nimble group of people. There’s not as much first generation space out there but there’s a lot of second generation space as brands have decided to walk on leases that are attractive to us and you know, particularly a lot of free standing units that are more billboard sites for us. And so we have, as we’ve moved into new territories, really seen those take off. So those AUVs of those restaurants, very exciting.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Yep. Okay, great. Kind of good segue on the development side, you know, certainly not looking for a year, but you know, what is the bridge to ultimately becoming free cash flow profitable? And question we get a lot from investors is can you reach free cash flow profitability while doing the 10%

Mel Hope, CFO, First Watch Restaurant Group: plus in restaurant growth? Think, I don’t know if people look at this, but I think of free cash flow prior to investment in CapEx and we’re already we’ve already been that. We fund our new restaurants as well as investments we made in the legacy fleet and in terms of keeping them current and repair and maintenance and that sort of thing. We fund that out of our operating cash. We borrow as we have done strategic acquisitions.

We bought a number of our franchisee restaurants in. Years ago, we bought one or two brands that we converted to First Watch restaurants. So we currently are funding our growth with operating cash and only borrowing with, for those strategic acquisitions. And I think if we, that, we’d like to try and stick to that principle. Okay, very good.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Couple questions that we also get from investors. You know, would love to know, what do you observe in the breakfast category in 2025? You know, the discretionary nature of the category seemed to be a headwind to sales in 2024. We’re seeing the traffic, know, seeing a nice rebound there so far this year. Do you attribute it to a better category that you’re seeing in breakfast, or has this been driven by some of your more idiosyncratic drivers?

Mel Hope, CFO, First Watch Restaurant Group: I think there’s a number of things that have gone I mean, you can see the customer has made some sort of a shift. You know, maybe it’s managing their wallets. They’re not trading down into fast food because you can see that those, you know, the fast food guys are saying their breakfast occasions are off. Two, so I think a couple of things have gone on.

One, I think it’s not the value proposition that it was years ago. There’s more entrants into the space right now, but many of them are franchise models. We’re a company owned model and the pricing that that that we’ve seen out there has made it less attractive as a, you know, as a cost occasion, which is why we have the opportunity to communicate a lot with customers and show our value proposition. And it’s also why I’m optimistic about our philosophy on pricing because as we continue to maintain our, you know, our favorable value proposition and favorable menu pricing for like items, I think we become an option for customers who are, you know, seeking something a

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: little bit more special. Yeah, okay. You’ve started talking more about speed of service in recent quarters. You know, would love to have you frame up the progress that you’ve made so far and the key drivers there, as well as looking ahead, the opportunities to continue on this.

Mel Hope, CFO, First Watch Restaurant Group: Sure. Dan Jones is our Chief Operating Officer, and I know you’ve met Dan before. One of the things that Dan brought to the company in terms of operations was a real focus on operating data and measuring and racking and stacking and communicating it to the to our managers who, by the way, are a competitive bunch of people and don’t like to don’t like to look different from their friends around the corner. And so one of the things that we did just in terms of the data capture is to actually report it. I mean, it’s not novel, but oftentimes you’ll find that what my dad used to say, if you aim for nothing, you’re sure to hit it.

We gave people a target and people started to emphasize that. They started to focus on it and then they then they trained on how to do it how to do it better. But we also, with the introduction of our KDS systems in the back of the house, That allowed us to align more with the production line, with the service line out front, and allowed us to measure more from the time we take an order to the time it’s served. And so, the addition of the data and then feeding it back and emphasizing it to our teams, those I think really made a compelling change in the operations. And kudos to Dan for making that important to our operators.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Yeah. Looking ahead, you know, you’ve identified some key opportunities that have really helped lead. I mean, what are the further opportunities here? Because I mean, I think you guys do a good job of making sure it’s an efficient experience for the guests without being pushy by any means.

Mel Hope, CFO, First Watch Restaurant Group: Yeah, the hard work of restaurants, and I’ve been in this business for a long time, is it comes in managing the day, you know, the basis points. I mean, it comes in little things. So, you know, from time to time we visit the choreography and the service of the restaurant. We visit the location of things in the back of the house or whether or not we need make lines or do you need a separate area for, where take out and delivery is very popular. Do you need to have, you know, modifications for things like that?

Most of those things come along and again, it’s shaven basis points. It’s constantly training. It’s making sure that as we get so many new people into the company, you know when we have now 15,000 employees, give or take a thousand, okay. The turnover of new employees, the people who come into the company, having them better trained, having them better ready to go, those sorts of things are the emphasis that we have now in order to continue to shave those basis points and to introduce new items in the restaurant without disrupting or tarnishing the experience of the customers.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Awesome. In the last minute or so we have left, Mel, just love to read on the broader consumer. You know there’s been a lot of news flow so far this year. It’s definitely created noise you know, within your business but certainly you guys have shown that you’ve shown progress off the rebound from 2024. So I’m curious you know, how you see the current stand of the consumer.

Mel Hope, CFO, First Watch Restaurant Group: Well, I generally look to you guys for those kind of comments, I have to say. But look, I think the customer’s fragile. I mean, there’s no question about what people are looking for a little bit more certainty right now and there is, you know, consistency would I think bolster some of the, you know, some of consumer confidence in the near term and the long term. So so I think our customer’s affected by that. I think your investor is probably affected by that and I think I think every company out there right now is is managing through a consumer environment.

It’s a little bit more fragile than we’re used to and people could use a little bit more comfort.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Awesome. I hate to end it on that note, but you know, just wanna say, Mel, thank you so much for joining us And thanks for joining us us.

Mel Hope, CFO, First Watch Restaurant Group: There we go.

Andrew Charles, TD Cowen’s restaurant analyst, TD Cowen: Thank you everybody.

Mel Hope, CFO, First Watch Restaurant Group: Thank you all.

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