ONE Group Hospitality (NASDAQ:STKS – Get Free Report) posted its quarterly earnings results on Wednesday. The restaurant operator reported ($0.79) EPS for the quarter, missing the consensus estimate of ($0.21) by ($0.58), FiscalAI reports. ONE Group Hospitality had a negative net margin of 10.25% and a negative return on equity of 10.49%. The business had revenue of $176.96 million during the quarter, compared to analysts’ expectations of $178.13 million.
Here are the key takeaways from ONE Group Hospitality’s conference call:
- Traffic improved, but comparable sales remained slightly negative. Consolidated traffic rose 1.8% for a second consecutive quarter, while comparable sales declined 0.4%; management attributed late-quarter weakness partly to September storms and said customers remain cautious and value-conscious.
- Restaurant margins and Adjusted EBITDA increased. Restaurant operating profit margin expanded 190 basis points to 13.2%, helped by cost of sales falling to 19.5%; Adjusted EBITDA rose 5% to $11.1 million despite higher pre-opening costs.
- Cash generation supported debt reduction and a larger buyback authorization. Year-to-date operating cash flow more than doubled to $41.8 million, and debt declined about $6 million; the board also approved a $5 million increase to the share repurchase program. Debt remained substantial at $347.9 million.
- Management is pursuing growth through conversions and Benihana Express. Early sales at recent restaurant conversions were encouraging, and the company cited franchise interest in the smaller Express format; it plans six to eight systemwide openings in 2026 while prioritizing Express development.
- 2026 targets call for $95–$100 million in Adjusted EBITDA and about 1% comparable-sales growth. The outlook also includes $800–$810 million in revenue and $30–$34 million in capital expenditures net of landlord allowances; the quarter still posted a $16.1 million net loss attributable to the company.
ONE Group Hospitality Trading Down 0.4%
STKS traded down $0.01 on Wednesday, hitting $1.18. 56,419 shares of the company’s stock were exchanged, compared to its average volume of 28,982. The stock has a fifty day moving average of $1.47 and a two-hundred day moving average of $1.80. ONE Group Hospitality has a twelve month low of $1.07 and a twelve month high of $2.65. The firm has a market cap of $37.24 million, a PE ratio of -0.31 and a beta of 1.30.
Analyst Ratings Changes
Several equities research analysts have recently weighed in on STKS shares. Weiss Ratings raised ONE Group Hospitality from a “sell (e+)” rating to a “sell (d-)” rating in a research report on Tuesday, August 11th. Zacks Research upgraded shares of ONE Group Hospitality from a “strong sell” rating to a “hold” rating in a report on Monday, October 5th. Finally, Piper Sandler reduced their target price on ONE Group Hospitality from $5.00 to $4.00 and set a “neutral” rating for the company in a research note on Monday, August 10th. One investment analyst has rated the stock with a Buy rating, two have issued a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of “Hold” and an average target price of $4.00.
Read Our Latest Report on STKS
About ONE Group Hospitality
ONE Group Hospitality, Inc is a hospitality company that develops, owns, operates, manages and licenses upscale and polished-casual restaurants and lounges. Its concepts emphasize high-energy dining, premium food and beverage offerings, and entertainment-oriented guest experiences.
The company’s principal brands are STK Steakhouse and Kona Grill. STK combines the traditional steakhouse with a contemporary lounge atmosphere, serving premium steaks, seafood, cocktails and other upscale menu items.
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