Why First Watch (FWRG) Shares Are Plunging Today

Why First Watch (FWRG) Shares Are Plunging Today

Kayode Omotosho

Wed, February 25, 2026 at 2:11 AM GMT+9 2 min read

In this article:

FWRG

-12.58%

What Happened?

Shares of breakfast restaurant chain First Watch Restaurant Group (NASDAQ:FWRG) fell 10.5% in the morning session after the company reported mixed fourth-quarter results, where a significant earnings beat was overshadowed by a slight miss on adjusted EBITDA and a weak forecast for the upcoming year.

While the company posted impressive earnings of $0.24 per share, strongly beating analyst estimates of $0.07, this positive was not enough to win over investors. The company’s revenue of $316.4 million was in line with expectations. However, adjusted EBITDA for the quarter came in slightly below consensus. More significantly, First Watch provided a disappointing financial outlook for 2026, with its full-year EBITDA guidance of $136 million falling meaningfully short of the $145.2 million analysts had forecasted. This weaker-than-expected guidance appeared to be the primary driver for the negative investor sentiment, outweighing the strong earnings performance.

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What Is The Market Telling Us

First Watch’s shares are very volatile and have had 26 moves greater than 5% over the last year. But moves this big are rare even for First Watch and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was about 22 hours ago when the stock dropped 3.4% on the news that the Trump administration’s announcement of new global tariffs, reignited trade policy uncertainty.

The move came swiftly after the Supreme Court ruled the previous week that the president could not use the International Emergency Economic Powers Act (IEEPA) for such duties, a decision that had initially sent markets higher. However, the administration invoked a different authority, the Trade Act of 1974, to impose a 15% global tariff for up to 150 days. The rapid reimposition of trade barriers creates significant uncertainty for companies across multiple sectors that depend on international supply chains and global trade. Investors are now weighing the potential impact of these new duties on corporate earnings and broader economic activity.

First Watch is down 10.4% since the beginning of the year, and at $13.77 per share, it is trading 35.4% below its 52-week high of $21.32 from February 2025. Investors who bought $1,000 worth of First Watch’s shares at the IPO in September 2021 would now be looking at an investment worth $622.01.

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