67 of 68 First Watch Locations in Texas Sold Less Alcohol This Year

Two moves, one pattern

On August 4, First Watch trimmed its full-year adjusted EBITDA guidance to $133 to $136 million. The reason, per CFO Ashlee Weisser on her first earnings call in the seat: “The guidance revision to adjusted EBITDA is entirely the result of stronger-than-anticipated customer demand for our new premium protein beef-based offerings, which carry a higher cost of goods profile than our broader menu mix.”

Guests ordered more steak than the model expected. Wall Street took it in stride; the stock finished up on the day. And it is a genuinely unusual reason for a guidance revision, which makes it worth testing against the one revenue line at First Watch that a state independently audits.

Texas files every dollar of on-premise alcohol monthly, location by location. Pourcast tracks all 76 active First Watch permits, 4,718 filings since February 2019. That line tells the other half of the mix story: while guests trade up on the plate, the optional drink has been quietly shrinking for three straight years.

Both moves are the same phenomenon. First Watch’s customers keep making sharper mix decisions than the plan anticipates, in both directions. The audited data just shows it earlier.

The Number

Strip out new locations. Look only at dollars, at stores that filed all seven months of January through July in both 2025 and 2026.

That cohort is 68 locations. Their combined alcohol receipts fell from $1.89 million to $1.61 million. Down 14.8%. Sixty-seven of the 68 declined. The median store fell 13.4%. Exactly one grew.

And it is not a one-year event. The same seven-month window was down 14.5% in 2024 and down 9.8% in 2025. Compounded, a comparable First Watch bar in Texas takes in about a third less alcohol revenue than it did in the first half of 2023.

Set that beside what the company reported on August 4. First-half same-restaurant sales up 3.2%. Traffic down 1.2% but improving, and, per CEO Chris Tomasso, positive in June. Those numbers are national, and they are food plus everything else, so there is no contradiction in the accounting. The two lines simply measure different things: the national comp measures the visit, and the Texas alcohol line measures the most optional item on the check. In June, the visit line turned positive while the optional line fell 14.5%.

Scale matters here, and the company has been consistent about it. After our March piece, Chief Brand Officer Matthew Eisenacher told us, “By design and intention, we are not an alcohol based experience.” The receipts agree. First Watch’s trailing-twelve-month alcohol AUV is about $44,000 a year per Texas location, roughly $3,600 a month. That is $120 a day, about sixteen drinks at the statewide median mimosa price of $7.50. Sixteen drinks a day is not a bar business, and First Watch has never claimed to run one. What makes the line worth reading anyway is its provenance: it is the only location-level revenue at this company that a state audits, which makes it the cleanest independent signal of whether guests add or skip the extra when the check is optional. For three years, the signal has pointed the same way.

The fair context is that the whole Texas brunch-alcohol occasion is soft. Same methodology, same window, from the same audited filings: Snooze down 4.6% (after a steep 26.7% decline the year before), Another Broken Egg down 8.6%, Kerbey Lane roughly flat at -0.4%, Toasted Yolk down 17.6%, Dish Society down 16.6%. Maudie’s Tex-Mex, a full-bar concept we track for contrast, grew 5.3%. The daytime drink is having a hard cycle everywhere. Within that cycle, some brands have found a floor. First Watch’s Texas line has not yet.

There is a bigger version of that objection worth stating outright: Americans, and younger Americans especially, are drinking less. Gallup’s consumption readings have hit record lows, and the drivers cited range from health attitudes to GLP-1 adoption to cost. Any brand’s alcohol line in 2026 is fighting that current, and First Watch is no exception. What the Texas filings add is a control the national narrative cannot provide. These are the same months, the same state, the same regulatory regime, and the same category, and the outcomes inside that frame range from -17.6% to +5.3%. A secular decline explains why the whole table is heavy. It does not explain the spread within it, or why 67 of 68 First Watch locations moved the same direction while a full-bar competitor a few miles away grew.

What 90,000 Menu Rows Say

Receipts tell you what sold. Menus tell you what it cost. Pourcast’s verified Texas menu corpus holds 89,891 trusted price rows across 5,240 breakfast and brunch venues, every one multi-source verified.

Comparing a chain to that corpus takes three pieces of discipline, and getting any of them wrong changes the answer. First, variant matching: there are hundreds of items called “eggs benedict” on Texas menus, and pooling them blends $21.00 crab cake benedicts with $11.75 veggie benedicts and describes nothing anyone actually orders. Second, vintage: snapshots in the corpus run back to 2007, and comparing First Watch’s 2026 prices against a 2015 benedict at $12.75 drags the market line down. Every comparison below is restricted to snapshots from January 2025 forward. Third, deduplication: 319 venue-item pairs appear more than once, one of them 24 times, which lets heavy-snapshot venues vote repeatedly. Each venue-item contributes one price.

Matched, dated and deduped that way, the pattern is clear: First Watch prices its protein plates well below the Texas market and everything else right at it.

First Watch vs. the Texas breakfast market, variant-matched:

| Item | First Watch | Like-for-like median | Venues in comparison | FW percentile | |---|---|---|---|---| | Eggs Benedict, smoked salmon | $15.99 | $18.00 | 25 | 12th | | Eggs Benedict, classic | $14.29 | $16.00 | 98 | 33rd | | Avocado toast | $13.29 | $13.99 | 182 | 44th | | French toast, plain | $11.79 | $11.64 | 105 | 50th | | Floridian French Toast (specialty) | $13.79 | $13.50 | 53 | 51st | | Belgian waffle | $10.99 | $10.00 | 68 | 53rd | | The Works omelet (loaded) | $13.79 | $13.49 | 50 | 55th |

First Watch prices from verified snapshots at four Texas locations, April through August 2026, identical at all four. Statewide comparisons are variant-matched, entree scope, standard portions only, catering, half-order and sandwich formats excluded, snapshots January 2025 onward, one row per venue-item. The Texas breakfast corpus is overwhelmingly independent operators, so these percentiles place First Watch against the broad market it competes in for the occasion, not against national chain peers. A sensitivity test across four reasonable assumption sets leaves the classic benedict between the 31st and 37th percentile, the salmon benedict between the 11th and 17th, and the loaded omelet between the 55th and 61st.

The smoked salmon benedict is the result to sit with. First Watch charges $15.99 against a $18.00 median across 25 Texas venues serving a genuine salmon benedict. That is the 12th percentile, two dollars under the market, on the single most expensive protein on the plate. The classic benedict tells the same story more quietly: $14.29 against $16.00, the 33rd percentile across 98 venues.

Everything that is not a protein plate sits at the market. Plain French toast is the 50th percentile. The specialty French toast is the 51st. The Belgian waffle, at $10.99 against a $10.00 median, is the 53rd. The Works omelet is the 55th. None of those is a premium worth calling a strategy; they are a brand pricing the middle of the market and then discounting its expensive proteins beneath it.

That is a genuine value posture, and it is the exact inverse of what the surrounding market is doing with its price increases.

Across 4,077 verified same-item price transitions in the corpus, observed a median of 157 days apart, the median move is +8.3% and 79% of all moves are increases. When Texas breakfast operators touch a price, they usually raise it, and by real amounts: the median increase is +10.7%. Sort those moves by category and the rule is simple. The more expensive the protein, the more reliably operators take price on it. Shrimp items rose in 93% of observed moves. Salmon and steak rose in 88% each, steak at a median +8.0% and +$1.20. At the bottom of the table sit the cheap-input griddle items: pancakes at 77%, French toast at 76%. Texas breakfast operators raise prices on protein and hold them on flour and eggs. The statewide median carne asada plate now sits at $17.99.

So First Watch enters 2026 discounting protein hardest in a market that reprices protein hardest, holding everything else at the median, and carrying about 3.6 to 3.7% total menu pricing while the market moves in 8% steps. Then it builds its two biggest LTOs of the year around steak, in the most expensive beef market in three quarters of a century.

None of those choices is obviously wrong on its own. Together they describe a P&L with very little cushion in exactly the place the surprise arrived.

The Steak Quarter

The cost backdrop for the beef bet was unforgiving. The US cattle herd entered 2026 at 86.2 million head, the smallest since 1951. The Choice boxed beef cutout peaked around $414 to $416 per cwt in September 2025 and was back above $400 by late March 2026. USDA’s July outlook projects retail beef up 10.7% for 2026. In Pourcast’s commodity layer, the wholesale flank series that maps to First Watch’s carne asada items averaged 42% higher in the second quarter of 2026 than two years prior, printing its series high the week the summer Chipotle Steak and Queso Hash launched on June 2.

By the company’s account, the costs themselves came in as planned; the variable was how many guests ordered the steak. The commodity data supports the cost half of that account, and the offsets the company cited are real too. Wholesale egg prices collapsed roughly 90% from their early-2025 peak. Avocados eased. Coffee is the holdout, with arabica at 359 cents per pound in July, still about 70% above early 2024.

What the quarter leaves open is the forecasting question. First Watch launched its two highest-mixing steak LTOs in company history into a record beef market, priced them into the one category where its own menu already sits furthest below the market, and underestimated its own guests’ appetite for them by enough to move full-year guidance. Management frames the demand as validation of the innovation pipeline, and that reading has merit; you cannot build LTO equity without dishes people over-order. The other reading is that mix is the hardest line in this P&L to forecast right now, and it has surprised the plan in both directions this year: up on steak, down on the optional drink. The steak LTO ended August 17, and the company expects the margin impact to fade with it. The next two quarters will show which reading holds.

The Test We Set in March, Graded

We wrote in March that the audited data would tell us before Wall Street does: if the location-level spread in Texas narrowed within two to three quarters, field operations could handle unit variance without a dedicated operations executive. If it widened, the simplification was premature.

Verdict: a push, with a lower floor, and one caveat about the ruler. We held the March method for continuity, which measures each location’s lifetime average monthly receipts. After seven years of filings those averages are heavily anchored by history and move slowly by construction, so this test detects only large changes. On that measure the spread between the strongest and weakest mature location stands at 3.6x through July, essentially where it stood in February. It did not narrow.

Mansfield leads at $7,459 per month lifetime, Grand Prairie at $7,412, and the new entry is Waxahachie at $7,341. That store opened August 11, 2025, filed its first month immediately, and has averaged about $7,900 a month over its last three. A leasing brochure for the building markets it as the most-visited First Watch in Texas per Placer.ai, which is a broker’s claim rather than a company disclosure, but on the alcohol line the audited receipts run in the same direction. It is the best evidence in this dataset that the new-unit engine is genuinely strong. At the other end, Flower Mound now holds the last spot at $2,047 a month, below Fulshear’s $2,296.

The competitive gap held steady. Trailing twelve months through July, Snooze generates about $179,000 a year in alcohol receipts per Texas location. Toasted Yolk about $149,000. Another Broken Egg about $137,000. First Watch: about $44,000 a year, down 9.4% year over year, across 76 active permits generating $3.2 million in trailing-twelve-month receipts and $19.18 million lifetime. The structural explanations from March still apply, and they are creditable ones: batch cocktails, no bars, no bartenders, near-zero incremental labor, so each alcohol dollar likely carries better margin than a competitor’s. The open question is the same one the COO piece raised, now with three more quarters of evidence: whether a line this small and this steadily declining is a deliberate ceiling or an unwatched one.

What We’re Watching

Whether the decline decelerates. Second-half 2025 comps are easier. If same-store alcohol stabilizes against them, the February menu redesign and the marketing investment are reaching the attachment. If it stays down double digits, they have not yet.

The fall menu, in the corpus before the P&L. Pumpkin season is First Watch’s biggest seasonal platform. Our menu snapshots will show whether pricing steps up toward the market’s pace, and whether the fall LTOs lean back into beef, weeks before either shows up in an earnings call.

November 12, Boston. First Watch hosts its first Investor Day. Management has promised sales-transfer math and brand-awareness numbers. Nobody has put a current number on beverage since 2022, when the company disclosed alcohol at 2.7% of in-restaurant sales. One slide would settle what the Texas data can only suggest.

The beef postscript. The steak LTO ended August 17. If Q3 margins recover on schedule, the “temporary” framing wins and the innovation-validation reading gets stronger. If guests keep trading up into the fall menu, mix forecasting becomes the story of this fiscal year.

First Watch remains the scale story of daytime dining: 665 restaurants, a 2,200-unit ambition, positive comps in a segment Black Box expects to shrink, and a new-unit class that outperforms its own underwriting. None of that is in dispute here. The pattern worth watching is narrower and more interesting: this company’s guests keep moving faster than its forecasts, toward the steak and away from the mimosa, and the audited data surfaces those moves quarters before the income statement does.

Methodology

Same-store cohorts include only locations that filed all seven January-through-July months in both comparison years, from Texas Mixed Beverage Gross Receipts filings through July 2026. Mixed beverage data is on-premise alcohol only, is self-reported by filers, and says nothing about food sales or total unit economics; category splits reflect filer classification and are treated cautiously. Trailing-twelve-month AUV divides brand receipts by average reporting locations. Menu figures come from Pourcast’s verified corpus, multi-source Verified or Gold rows only, provisional extractions excluded; First Watch prices reflect snapshots at four Texas locations (chain pricing is effectively uniform), and statewide distributions use standard portions. Price transitions are observed same-item moves a median of 157 days apart and are not annualized inflation rates. Commodity figures reference USDA AMS, USDA ERS, BLS, and IMF series; relative moves in Pourcast’s flank series are internal to that series. Financial figures reference FWRG public disclosures, including the August 4, 2026 Q2 earnings call and supplemental materials.

Pourcast tracks alcohol revenue and menu pricing across 57,000+ Texas venues using audited sales filings and a verified menu corpus, updated monthly. Location-level data for First Watch and every brand in its competitive set is available on the platform.