ONE Group Hospitality Q2 Earnings Call Highlights

Second-quarter revenue fell 3.3% to $200.5 million , mainly because of restaurant closures and the delayed relocation of STK’s downtown New York site. Comparable sales rose 0.9%, with positive transaction growth across all segments. Profitability improved despite lower sales: restaurant operating margins expanded 110 basis points to 16.4%, operating income increased to $6.6 million, and the net loss narrowed to $2.1 million. However, adjusted EBITDA declined 9.7% to $21.1 million due largely to increased marketing and corporate expenses. ONE Group strengthened cash generation and emphasized asset-light growth, producing $32 million in first-half operating cash flow and repaying more than $6 million of debt. For 2026, it expects revenue of $805 million to $820 million and adjusted EBITDA of $95 million to $105 million.

ONE Group Hospitality NASDAQ: STKS reported second-quarter revenue declined from a year earlier, as planned restaurant portfolio optimization and a delayed New York City relocation weighed on reported sales. However, the company said comparable sales, transactions and restaurant-level margins improved across its operating segments. Total GAAP revenue for the second quarter was $200.5 million, down 3.3% from $207.4 million in the prior-year quarter. Company-owned restaurant net revenue declined 3.2% to $197.3 million, primarily reflecting closed Grill Concepts locations, partly offset by comparable-sales gains and contributions from restaurants opened since July 2025. Comparable restaurant sales increased 0.9%, with U.S. STK restaurants up 3.2% and Benihana locations up 0.8%. President and CEO Manny Hilario said all segments delivered positive transaction growth during the quarter.

Restaurant operating profit rose to $32.4 million, representing 16.4% of company-owned restaurant net revenue, compared with 15.3% a year earlier. Consolidated restaurant operating profit margin improved 110 basis points. The STK segment expanded its margin by 130 basis points to 17.4%, while Benihana’s margin rose 90 basis points to 18.9%. Hilario described Benihana as the company’s strongest margin segment. Chief Financial Officer Nicole Thaung said company-owned restaurant cost of sales improved by 170 basis points to 19.5% of net revenue, from 21.2% in the prior-year period. The improvement reflected integration synergies, supply-chain initiatives, menu optimization and increased menu pricing, she said. Company-owned restaurant operating expenses increased 50 basis points to 64% of revenue. Thaung attributed the increase to additional marketing spending intended to support traffic during the World Cup and repair and maintenance spending to increase air-conditioning capacity at Benihana restaurants amid summer heat. On a combined basis, total company-owned operating expenses, including cost of sales, improved 110 basis points to 83.6% of revenue. Operating income was $6.6 million, compared with $700,000 a year earlier. Net loss attributable to The ONE Group was $2.1 million, narrowing from a $10.1 million loss in the prior-year quarter. Net loss available to common stockholders was $12 million, compared with $18.2 million a year earlier. Adjusted EBITDA was $21.1 million, down 9.7% from $23.4 million in the prior-year quarter. Thaung said the adjusted EBITDA decline reflected higher marketing investment and increased general and administrative expense excluding stock-based compensation. General and administrative costs increased to $14 million from $11.7 million, driven by salary inflation, higher bonus expense, planned information-technology and AI-related investments, and gr...