ONE Group Hospitality (NASDAQ:STKS) Announces Earnings Results

Key Points

• Earnings miss and revenue shortfall: ONE Group reported a loss of $0.20 per share versus analysts' $0.12 expected and revenue of $212.8M versus $218.6M, with negative ROE and an -11.45% net margin.
• Operational traction: Adjusted EBITDA rose 12.1% to $28.8M and restaurant operating margins expanded 100 bps to 19%, with management citing sequentially improving comps and accretive conversions of underperforming locations.
• Capital discipline but margin headwinds: Net capex fell ~22%, the revolver was paid to zero and $9M of debt was repaid, yet adjusted G&A rose and management widened its tax guidance (~10–20%), which could weigh on near-term EPS.

ONE Group Hospitality (NASDAQ:STKS - Get Free Report) released its earnings results on Wednesday. The restaurant operator reported ($0.20) earnings per share for the quarter, missing analysts' consensus estimates of $0.12 by ($0.32), FiscalAI reports. ONE Group Hospitality had a negative return on equity of 57.00% and a negative net margin of 11.45%.The business had revenue of $212.82 million during the quarter, compared to analysts' expectations of $218.55 million.

Here are the key takeaways from ONE Group Hospitality's conference call:

• Strong operational and margin performance — Total GAAP revenues were $212.8M, Adjusted EBITDA rose 12.1% to $28.8M, and Restaurant Operating Profit margins expanded by 100 basis points to 19%, driven by a 140 bps reduction in food & beverage costs.
• Comparable-sales mixed but improving — Consolidated comps were -0.3% for Q1 with STK +1.4% and Benihana flat, but management reports sequential improvement and positive comps and transactions early in Q2, with strong bookings for holidays like Mother’s Day.
• Portfolio optimization and conversions are accretive — The company is converting underperforming Grill locations to STK/Benihana (5 conversions underway, reopenings by end-2026) and cites a Scottsdale conversion that added ~ $4M of annual sales on a ~$1M investment (~4x sales ROI).
• Capital discipline and balance-sheet focus — Capex (net) fell ~22% to $10M, revolver balance was reduced to zero with $33.7M available, $9M of debt was repaid in the quarter, and management expects free cash flow generation and continued debt reduction in 2026.
• Higher operating expenses and wider tax range could pressure EPS — Adjusted G&A rose (to $13.9M ex-stock comp) due to salary, audit, IT/AI and marketing investments; guidance widened the effective tax rate to ~10%–20% and net loss to common shareholders was $0.20/sh for the quarter.

ONE Group Hospitality Trading Up 1.6%

Shares of STKS stock traded up $0.03 during trading hours on Wednesday, reaching $1.88. 48,937 shares of the company's stock were exchanged, compared to its average volume of 36,965. ONE Group Hospitality has a 1 year low of $1.65 and a 1 year high of $5.26. The stock has a market cap of $58.99 million, a PE ratio of -0.47, a PEG ratio of 0.23 and a beta of 1.29. The stock's fifty day moving average price is $1.83 and its two-hundred day moving average price is $1.99.

Institutional Investors Weigh In On ONE Group Hospitality

Institutional investors and hedge funds have recently modified their holdings of the company. Group One Trading LLC lifted its holdings in shares of ONE Group Hospitality by 18,965.0% during the third quarter. Group One Trading LLC now owns 19,065 shares of the restaurant operator's stock worth $56,000 after purchasing an additional 18,965 shares during the period. Squarepoint Ops LLC acquired a new position in ONE Group Hospitality in the third quarter valued at approximately $97,000. Bank of America Corp DE lifted its holdings in ONE Group Hospitality by 18.7% in the fourth quarter. Bank of America Corp DE now owns 34,782 shares of the restaurant operator's stock valued at $101,000 after acquiring an additional 5,477 shares during the period. Qube Research & Technologies Ltd acquired a new position in ONE Group Hospitality in the second quarter valued at approximately $132,000. Finally, Arrowstreet Capital Limited Partnership acquired a new position in shares of ONE Group Hospitality during the 3rd quarter worth approximately $170,000. Institutional investors and hedge funds own 29.14% of the company's stock.

Analyst Upgrades and Downgrades

A number of analysts have weighed in on STKS shares. Lake Street Capital reduced their target price on ONE Group Hospitality from $5.00 to $4.00 and set a "buy" rating on the stock in a research note on Friday, January 16th. Weiss Ratings restated a "sell (d-)" rating on shares of ONE Group Hospitality in a research note on Thursday, January 22nd. One equities research analyst has rated the stock with a Buy rating, two have issued a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, ONE Group Hospitality presently has an average rating of "Hold" and an average price target of $4.50.

ONE Group Hospitality Company Profile

ONE Group Hospitality Inc is a full-service hospitality company primarily engaged in the development, ownership and operation of upscale restaurant and lounge concepts. The company's flagship brand, STK, combines a modern steakhouse menu with a high-energy lounge atmosphere, offering signature cuts of beef, fresh seafood, sushi selections, craft cocktails and an extensive wine program. ONE Group's concept emphasizes a seamless blend of fine dining and nightlife, catering to guests seeking both culinary excellence and an immersive social experience.

Headquartered in El Segundo, California, ONE Group deploys a mixed model of company-owned and franchised locations across multiple markets.

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