Shares of First Watch Restaurant Group, Inc. (FWRG) plummeted 19.40% in pre-market trading on Tuesday following the release of disappointing first-quarter 2025 financial results. The casual dining chain's performance fell significantly short of analyst expectations, triggering a substantial selloff among investors.

First Watch reported a net loss of $0.01 per share for Q1, missing the analysts' consensus estimate of $0.04 earnings per share. Revenue came in at $282.24 million, slightly below the expected $283.28 million. The company's adjusted EBITDA of $22.753 million also disappointed, falling short of the $24.9 million forecast by analysts. The adjusted EBITDA margin stood at 8.1%, reflecting increased pressure on the company's profitability.

The earnings miss was attributed to rising commodity costs and the impact of tariffs. First Watch reported that its main food commodities - eggs, bacon, coffee, and avocados - increased by 7.7% in Q1. The company also expects a roughly 0.3% cost increase as a percentage of sales due to tariffs this year. In response to these challenges, First Watch has revised down aspects of its guidance for the year. Despite these headwinds, the company is projecting total revenue growth of about 20% for the 52-week fiscal year ending December 28, 2025. However, this forward-looking guidance appears insufficient to offset the immediate negative reaction to the company's underperformance, as reflected in the significant pre-market stock decline.