The ONE Group’s third quarter saw a positive market reaction despite missing Wall Street’s revenue and earnings expectations. Management pointed to ongoing menu diversification at Kona Grill, improvements in digital engagement, and sequential recovery in guest traffic as partial offsets to continued macroeconomic headwinds. CEO Emanuel Hilario described the quarter as the company’s “best traffic quarter for the year,” emphasizing a focus on operational execution and targeted marketing, even as same-store sales remained pressured in key regions such as California.
Is now the time to buy STKS? Find out in our full research report (it’s free for active Edge members).
The ONE Group (STKS) Q3 CY2025 Highlights:
- Revenue: $180.2 million vs analyst estimates of $191.1 million (7.1% year-on-year decline, 5.7% miss)
- Adjusted EPS: -$2.31 vs analyst estimates of -$0.17 (significant miss)
- Adjusted EBITDA: $10.56 million vs analyst estimates of $16.75 million (5.9% margin, 37% miss)
- The company dropped its revenue guidance for the full year to $822.5 million at the midpoint from $852.5 million, a 3.5% decrease
- EBITDA guidance for the full year is $97.5 million at the midpoint, in line with analyst expectations
- Operating Margin: -1.2%, down from 2.1% in the same quarter last year
- Same-Store Sales fell 5.9% year on year (8.8% in the same quarter last year)
- Market Capitalization: $55.99 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From The ONE Group’s Q3 Earnings Call
- Joseph Gomes (NOBLE Capital): Asked for updates on traffic trends and Benihana franchising. CEO Emanuel Hilario explained that traffic declines moderated sequentially, with improved sales mix and active franchise pipeline development, particularly for Benihana Express.
- Anthony Lebiedzinski (Sidoti): Inquired about Las Vegas market trends and loyalty program impacts. Hilario shared that STK in Las Vegas is rebounding due to convention timing, and early loyalty data shows increased frequency among new members.
- Mark Smith (Lake Street Capital Markets): Pressed for details on Benihana’s same-store sales decline and the economics of converting locations. Hilario attributed Benihana’s performance to lapsed pricing and California softness, and outlined conversion costs and expected returns for both Benihana and STK formats.
- James Sanderson (Northcoast Research): Asked how November menu price hikes would affect Q4 same-store sales. Hilario said pricing actions were weighted toward Benihana and should lift average check size through high season, with little customer resistance observed so far.
- James Sanderson (Northcoast Research): Followed up on Benihana Express unit economics and franchisee returns. Hilario described the compact format’s high margin and low build-out costs, projecting 15–20% store-level margins and strong franchisee ROI.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will monitor (1) the pace and success of Benihana Express and STK franchise expansion, (2) execution of conversion and relocation strategies to boost unit economics, and (3) the continued impact of digital and loyalty platform enhancements on guest frequency and retention. Progress on reducing capital expenditures and managing cost inflation will also be critical watchpoints.
The ONE Group currently trades at $1.79, down from $1.95 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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