That was amazing. That was exciting. Well, thank you everyone for being here. I am Brian Mullan, I am the restaurant and food distribution analyst at Piper Sandler. Very happy to have the team from First Watch, CEO Chris Tomasso, and CFO Ashlee Weisser. We also have Steven Marotta from the investor relations in the audience. After that video, please review the forward-looking statements disclaimer posted here in this room, and for those of you listening on the webcast, posted in the most recent investor presentation on the company's investor relations website. Thank you for being here. Our pleasure. I think maybe a good place to start, last month you issued new long-term targets. Still a very attractive top and bottom line algorithm, but on balance, maybe slightly lower company on unit growth. A little bit of an increased focus on free cash flow generation. Maybe just to set the stage here, can you give a little more, a bit of context around these new targets, how they came to be, and why is now the right time to make these tweaks? Sure. We're just about at the five-year anniversary of our IPO and becoming a public company. At that time, we had set out some long-term growth targets, and I'm proud of the team for delivering on and even exceeding those targets over the five years. One of those was 10% unit growth, low- double-digit unit growth. We actually came in a little bit over 11%. We knew that at some point, 10% unit growth would be a challenge as we've grown, especially as quickly as we've grown. We felt like now is a good time to reevaluate that. Again, five years, did what we said we were going to do. Let's look to the next five. We've been the fastest growing full-service restaurant company in America the last five years. We still will be. Providing some clarity and some certainty around how many restaurants we'll open, is something that's helpful for our team, and we think it's helpful in the way we communicate that too. The focus there was to maintain our fast growth and our industry-leading growth. Also focus on strengthening the balance sheet through free cash flow generation. We looked at a number of different scenarios and felt like this one worked really well for us to accomplish those goals. Yeah, we're excited about that. Okay, thank you. Sticking to development, as you look at the pipeline, how should we think about new markets versus existing markets over the next few years? The reason I'm asking, because in the new targets, you indicated you expect positive traffic moving forward, net of planned sales transfer, which implies that there is some sales transfer going on. If you could just give a little extra context on what the sales transfer has been historically, or how you were thinking about that moving forward with these new targets. Yeah, we haven't quantified externally what that sales transfer is, but what I would say is by capping the unit growth and therefore the percentage reducing, one of the benefits of that will be a reduction in the sales transfer that we've experienced. We haven't really talked much about the sales transfer because we're aware of it. It's not something that happens to us. We plan for it. We burden the new restaurants that we're building with any cannibalization or sales transfer that we expect, and we're pretty good at projecting what that is. The investment hurdle rates reflect that. But it is a natural headwind for Same-Restaurant Sales and traffic that I don't think is fully appreciated because there's frankly nobody growing at the rate we are in casual dining. That is one of the benefits of our new long-term growth algorithm, especially from a unit count perspective. As far as we're concerned, our team, we did 50 last year, we're going to do around 50 this year. We have the team in place that's ready to do it, and we know how to do it really well. As far as your question about new emerging or core markets, that's really one of the beautiful things about our model, is that we've proven our portability, but more importantly, our consistency across geographies. We have the flexibility to open where we want, when we want. We take a number of things into consideration. We have all of our trade areas mapped out. But there's also an operational consideration and the teams that are needed to open those restaurants. We never want to overburden one market with too many openings. So that gives us some tremendous flexibility to open geographically where we want, and then the market type, whether it's core, emerging or new. In this past year, we entered the New England market. We now have four here. We entered Las Vegas. We entered Boise, Memphis, so a lot of great new markets for us, and we've been received very, very well. Okay. Along those lines of things going well in development, for each of the last few years, new store productivity has remained very impressive. You recently talked about class of 2026 is yet again exceeding your underwriting targets and across cohorts. As you look forward, would you expect that trend to continue for the foreseeable future? Or is there a reason, and you know, not precise guidance for a year, but— Yeah —big picture, is there a reason to moderate the new store AUV expectations at some point as you densify in more markets? How do you think about that? If we base the future on what we've seen, we don't expect anything to change. It really comes down to the discipline that we apply to our site selection and to our market qualifications and things like that. We know that if we stick to that criteria and don't waver and don't try to talk ourselves into something that's not showing up in our model, that we'll be successful. We have a very high success rate when we do that. As far as the returns go, we don't expect anything different than what we've experienced. Yeah. You're in 32 states at year-end of 2025. One big state you're not in yet is California. I'm curious if you are looking at opportunities there at this point. If you're not formally looking, I'm sure you're thinking about it. What are some factors you consider to ensure that any entrance in that large state would be successful? Just how do you think about that market different from others? The irony is we started in California. Our first restaurant was in California. Then the founders moved to Florida, and we've kind of grown from there and sold our three restaurants in California to our general managers at that time. Look, we have a TAM of 2,200 restaurants. We're sitting just below 700. We can't get there without California. But we still have a lot of green space before we get out that far. It's definitely on our radar. It's part of our consideration set for our TAM. But I would say it's not in the near future for us. We just have so many markets to penetrate and enter. Again, we're just now getting into New England. We're not in the Pacific Northwest. We have a lot more to do out west. The Mid-Atlantic has been tremendous for us, specifically the D.M.V. Delaware, Maryland, Virginia, has some of our highest volume restaurants in the system, so a lot more densification can happen there. Believe it or not, we still have lots of room to grow in Florida and in Arizona and Texas, even though those three states make up a majority of our restaurants. So, a long way to go, but it's on the radar. Okay. Then, I believe over the last few years, with second gen sites or conversions, whatever you might refer that to they've played a bigger role maybe than they had historically at First Watch. As you assess the landscape today, is that opportunity still attractive and therefore are you still doing these and expect to do these? It's very attractive. I think, it's funny that it's called a strategy. I think it probably is now. But how it started was opportunistic. Great sites became available when, what I would call legacy brands weren't able to sustain in those spots anymore. But if you think about some of the bar and grills and other concepts, great real estate, it wasn't a real estate issue, it was probably a relevancy of the brand issue. So, we've looked at those sites and once we realized, the site characteristics are amazing. We have right on the road visibility, our own dedicated parking. They're a little bit bigger than we've done in the past, but our team has done a great job of making them feel smaller. I think I have mentioned before, we will wall off a couple thousand square feet, that the consumer doesn't even recognize that there's anything behind it, in exchange for that visibility. That's driven some of our higher new unit openings. But, as much as I hate to say it, there's more and more of those becoming available. We are the first call. We can convert them very quickly. The landlord wants to get their rent as soon as possible. We've proven we can do that. It will continue to be a part of our opening portfolio. Okay. We will pivot here. Pivot over to marketing. I want to ask about the marketing strategy. Maybe just remind everyone, what were the changes you made early last year? Have those changes now covered or reached the entire base of stores? Separately, how do you see the marketing strategy evolving from here? What's the current conversation like between you and your marketing department? I can take that one. About two years ago, we started really testing into marketing and understanding how could it work for First Watch. We're almost 700 restaurants, but have a vibe of being really local. It was important for us to maintain that, and let people feel like we're their neighborhood restaurant. So it had to be super authentic for us, and it also had to make sense from a returns perspective. We started testing in 2024, felt pretty good about what we saw in test, expanded to about a third of the system in 2025. Last year, a third of the system received incremental marketing spend, and this year we've expanded that to 75%. We're continuing, we call it a test, learn, and act model. We're testing different things, we're learning from them, and then we're adjusting our strategy going forward, based on what message, what channel, what media type works in each specific market. Thank you for that. Sticking to marketing, I have heard you speak about, you are trying to drive another visit from existing customers, but you are also trying to attract new guests. Yes. Maybe could you just split those apart and address kind of the tactics behind each objective and are you seeing success with each? Is one a little, nothing is easy, but easier, more seamless than the other? Just talk about those kind of separately. Yeah. It is definitely both, I think what we are seeing is that it is really important for us to have the appropriate message for the type of customer we are trying to drive. So if you are new to First Watch, we are going to make sure that you see something that explains our brand a little bit more. Less about just the food and more about what is the experience you are going to get. How are we different than other companies that you might dine with? If you are an existing customer, we are looking for ways to bring you back. Something new and exciting, remind you why you love First Watch. One of the things we know from our internal research is that once someone has been to a First Watch, they love us. We are in the top decile for future purchase intent against regional, national, really great brands. If we can just get them to come in, if we can build that awareness, we can keep a customer for life. Sometimes it is just a reminder, keeping them top of mind, why First Watch is their favorite place. Thank you for that. On the most recent earnings call, you actually gave some stats around both aided and unaided brand awareness. They've both been improving. Maybe just give a little more context. What was the starting point? Where are you now? My perception would be there's still a lot of room to go on that. Yeah. If you could confirm that and how you think, just put some context. Yeah. We've seen a really big shift in unaided awareness, which is the hardest to move. We've seen it increase 50% over about early last year when we really started this, and 15% in aided awareness. We're really excited about that movement, but transparently, our awareness is very low relative to the industry. We agree with you. There's a great opportunity there, and we're seeing the media that we're doing move the needle. But there's still room to go, and we're really excited about continuing to see that process. For further context, at IPO, we were at 11% aided awareness, and now we're in the low 40s. That's still really low, but we've made great progress, and that's what's encouraging for us. We still see that as the biggest opportunity for us to drive traffic into restaurants. I always ask you this, it might even be annoying because I think it's far away, but how big would First Watch need to be where you'd start to entertain the idea of some sort of national messaging and then wanting to maintain that local, maybe there's a little tension at some point. You are a chain— Yeah —how do you think about that? Yeah, I think that's something we have to monitor. Look, it's really about the effectiveness and the return. As you said, we're only in 33 states, so you get a lot of spillover in national advertising and California's a great example. You'll pay a lot of money to have presence in California for advertising, and it won't really do us any good. We'd much rather focus on, and you can these days, be much more targeted in your media, but get the same kind of impressions that you would get from a national campaign. We have that balance of presenting ourselves as a network of neighborhood restaurants rather than a chain. If we can do that through digital, social, connected TV, and even some linear TV where you get the feel of national, but you're able to buy it by cable households, then I think that's what you're going to see us do for a period of time. It would take a while for us to be what would be called media efficient for national campaigns. Okay. Then we will move over to the menu. Maybe take us through the changes you made to the core menu in February. Then maybe you are seeing some mix tailwinds. Do you have two more quarters of benefit from that? Then might you look to make more changes next year, or maybe that is necessary. Just how you feel about those changes. Yeah. The first thing we did was completely redesign the menu, and with that redesign comes a re-engineering. We went from basically a brown craft paper menu with black type to a much more bright and colorful menu. We moved some things around. We highlighted some different things. We added some customer favorites to the menu, two beef dishes prior to this. The only beef on our menu was a Roast Beef S andwich. Now we have Barbacoa Tacos and Barbacoa Chilaquiles Breakfast Bowl. We added our most popular sweet item, which is a Strawberry Tres Leches French Toast. These are things that people just, I know my personal email got full of, "You have to put these things on the menu. Don't just have them on the seasonal menu." Then we did what we called, we addressed customer hacks that we learned from talking to our servers about things like they were asking us more for help. Our servers were like, "Hey, people are wanting to add salmon to their Avocado Toast, and we don't know how to charge for that. Can there be a key on that?" Well, yes, there can be a key on it, but let's really address what the real issue is, that there is a pull for that. So if people are asking for it is not on the menu, what happens if we put it on the menu? We put it on the menu, standardized the pricing by the tiers, and so that made the server's life easier, and lo and behold, it is something that the consumer wants, and we already had it in-house. So those type of things. We put the beverages on the menu. We did a lot of things to give things prominence, and it is exceeding our expectations from a mix standpoint. To your question about how many more quarters we would get, our visitation is very similar to most casual diner, so around two times a year. So if you just think about that, I think we have a lot longer runway of benefit from this than you would think. This was the first time we had a really serious overhaul to the menu in 10 years, so I doubt we would do it again in two. We want to give it time to season and settle in, and if it keeps performing the way it is, we are going to be really happy with it. That's great, and thank you for that. On the most recent earnings call, you talked about being particularly excited about a handful of innovative tests. I think they're focused on higher capacity day parts. Not sure what you can or can't reveal, but any kind of teaser? Maybe an obvious, I'm not sure, but why the higher capacity day parts in this case, the focus of these tests? Nothing we can share right now. We have an Investor Day on November 12, but we'll be sharing some more information about that, but really have some initiatives that we're excited about. Ideally, in any business, if you can fill the times when you have the capacity, it's incremental, right? I think we spent a lot of time over the last couple of years, you've been along for the ride on the setting us up to serve more demand with the KDS system, the dining room optimization, the waitlist management, implementation, but then optimization of that. Now we're in a create more demand scenario with the marketing, and some of these initiatives that we're excited to talk about that will really focus on weekdays. Maybe some of that will be good material for the marketing team when it comes. For sure. Just, you kind of touched on this a little bit, but maybe just touch or give an update on the consumer behavior you're observing across the three-day parts. I think there was a weekday breakfast, a weekday lunch, and then you have the weekend. Are there any differences or is it more uniform and similar? Just any thoughts on the consumer backdrop for the rest of the year? Yeah. We're seeing it be rather similar. There's a little bit of differences across the three-day parts, but for the most part, nothing super notable to share. From a consumer backdrop perspective, we're seeing it's this really weird dissonance between what people say and what they do. All of the trade press, everything you read talks about consumer sentiment being really low and everyone being super pressured by gas prices. We do skew to a higher income demographic, so I think there's a little bit of insulation from that. But even everything else that we see, people are still spending. I think there's a little bit of a, the world's kind of tough right now, but I'm going to continue to live my life. We joke that if we didn't read the news, we wouldn't know it was as bad as people say it is because we're not seeing that in our business. So we're hoping to continue to see that. Understood. Thank you. Wanted to ask about the balance sheet capital allocation. Is there a target leverage level you are looking to get to? How do you envision or do you envision share repurchases playing a role in capital allocation over the next several years? Is there a leverage level you would want to get to first, just how you are thinking about that. Yeah, I do not think we are going to share a specific leverage target publicly ever, but I would say use of our capital is first and foremost to what we know today is the highest returning, which is our organic growth, and funding that from free cash flow. Outside of that, we will use any excess cash from generation and however we want to, I would say. I think share repurchases could be one of the options, but really the new strategy and the focus on the balance sheet is about continuing to build strength in the balance sheet and also give us some flexibility so that when there are chances for us to buy back shares or if another opportunistic thing comes up that would be beneficial to us and our shareholders, we have got the ability to do that, which we do not currently have today. Okay, thank you. Then, going to move over to some of the operating expense lines just quickly. Just a question on food and beverage. Yeah. Maybe a good opportunity to remind us what you are currently thinking on food basket inflation, 3Q, 4Q, and is there anything worth calling out in terms of mix from some of the menu items or any LTOs that investors should be aware of? Yeah. We updated our guidance in the last call for the year to be flat to 1.5% food cost inflation on the year. The second half will be obviously a little bit higher than that based on what we reported year to date. I think the key part to remember is that we've got this great benefit from, let's call it, flat to neutral inflation, very low inflation for us. But we aren't seeing that flow all the way to food costs because of our LTOs. Chris mentioned our seasonal menus and the innovation we did with the menu and adding beef. We added a beef menu item in the past two LTOs, and they both performed very well. Our number one and number two seasonal menu items ever. The second one outperformed our expectations by 25%. It was a huge win from a customer perspective, but it came with a higher food cost. We ate away some of that inflation favorability. That's finished now. The remainder of the third quarter and the fourth quarter, we're back to non-beef menu items. But it's something we're really excited about because to see that level of interest from the customer shows us that people are really looking for the innovation that we create, but we can do so at a potentially higher price point because of how interested people were. We can continue to manage margins. Okay, thank you. I guess we are coming up on time. With the time we have left, maybe open-ended, what are you hoping to accomplish at the November Investor Day? Anything you'd want to leave the audience with in regards to First Watch, the strategy, the opportunity, and maybe is there anything you think It's a generic question, but I think it's very relevant here. Anything you think is misunderstood with your story and your company? Yeah, I think, we're blessed to be a category of one as far as our positioning. Yes, we're in casual dining, but we're a daytime only concept. We're the only one that's a public company that can say that. I think there's some nuances about our business, especially the part about our growth. Again, I can't think of another company that would say they're tamping down their growth to open 50 restaurants a year. But that's the position we're in. I think when you look at us, as compared to the rest of the environment, I just think there's some differences in our model and in how we're executing against our plan that we're going to go deeper on. We're going to go deeper on in our pricing philosophy and strategy. We'll go deeper on the sales transfer and how we look at that strategically and how that has changed from this high growth period where there were a lot of competitors in our space to where we are now. It's just that it's a different environment. We've clearly established ourselves as the leader in the segment, by size, scale, but also through execution and kind of recognition. How do we not only enjoy that position but leverage it and widen that gap between us and the next closest competitor and really own the segment. Very good. Looking forward to it. Thank you both for being here. Thank yo Thank you.