ONE Group Hospitality (NASDAQ:STKS) Announces Quarterly Earnings Results, Misses Estimates By $0.46 EPS

Key Points

• ONE Group Hospitality missed quarterly expectations, reporting a loss of $0.38 per share versus the $0.08 consensus estimate. Revenue fell 3.3% year over year to $200.5 million, slightly below forecasts.
• Operational improvements lifted restaurant-level margins by 110 basis points to 16.4%, while operating cash flow nearly tripled and the company repaid more than $6 million of debt. However, adjusted EBITDA declined 9.7% due to higher marketing and corporate costs and delays to the STK New York relocation.
• Management is pursuing capital-light growth, targeting six to 10 openings in 2026 and expanding the Benihana Express concept. Analysts maintain a consensus “Hold” rating, with a $4.50 price target.

ONE Group Hospitality (NASDAQ:STKS - Get Free Report) announced its earnings results on Wednesday. The restaurant operator reported ($0.38) earnings per share for the quarter, missing the consensus estimate of $0.08 by ($0.46), FiscalAI reports. ONE Group Hospitality had a negative net margin of 11.15% and a negative return on equity of 6.77%. The firm had revenue of $200.48 million for the quarter, compared to the consensus estimate of $204.66 million.

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

• Restaurant-level margins expanded 110 basis points to 16.4%, supported by lower food costs, supply-chain initiatives, menu optimization, and improved labor scheduling. Operating income rose to $6.6 million from $0.7 million a year ago.
• Operating cash flow nearly tripled to $32 million in the first six months, while net capital expenditures fell 38%; the company repaid more than $6 million of debt and expects continued free cash flow generation and debt reduction.
• Comparable sales increased 0.9%, with positive transaction growth across all segments and U.S. STK sales up 3.2%, but total revenue declined 3.3% to $200.5 million due largely to Grill portfolio closures and the delayed STK New York relocation.
• Adjusted EBITDA fell 9.7% to $21.1 million, missing the company’s prior guidance, as higher marketing spending tied to the World Cup, elevated corporate expenses, and the delayed New York opening offset operational improvements.
• Management is emphasizing capital-light expansion, including six to 10 planned 2026 openings and growth of the small-footprint Benihana Express concept, which management says can generate more than $1 million in annual revenue with attractive franchise economics.

ONE Group Hospitality Trading Up 1.7%

Shares of NASDAQ STKS traded up $0.03 during mid-day trading on Wednesday, reaching $1.78. The company had a trading volume of 31,153 shares, compared to its average volume of 15,024. The company has a 50-day moving average price of $1.88 and a two-hundred day moving average price of $1.93. The stock has a market cap of $56.18 million, a PE ratio of -0.44 and a beta of 1.36. ONE Group Hospitality has a 1-year low of $1.65 and a 1-year high of $3.38.

Analyst Upgrades and Downgrades

STKS has been the subject of a number of research analyst reports. Weiss Ratings reissued a "sell (e+)" rating on shares of ONE Group Hospitality in a report on Friday, July 10th. Zacks Research upgraded shares of ONE Group Hospitality from a "strong sell" rating to a "hold" rating in a report on Tuesday, July 7th. One equities research analyst has rated the stock with a Buy rating, two have given a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, the company has an average rating of "Hold" and a consensus price target of $4.50.

Hedge Funds Weigh In On ONE Group Hospitality

Hedge funds and other institutional investors have recently modified their holdings of the stock. Group One Trading LLC increased its stake in ONE Group Hospitality by 18,965.0% in the 3rd 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 in the last quarter. Squarepoint Ops LLC purchased a new stake in ONE Group Hospitality during the third quarter valued at about $97,000. Bank of America Corp DE boosted its holdings in shares of 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 worth $101,000 after buying an additional 5,477 shares during the period. Qube Research & Technologies Ltd acquired a new position in shares of ONE Group Hospitality in the second quarter worth about $132,000. Finally, Arrowstreet Capital Limited Partnership acquired a new position in shares of ONE Group Hospitality in the third quarter worth about $170,000. Institutional investors and hedge funds own 29.14% of the company's stock.

About ONE Group Hospitality

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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