We recently published an article titled 10 High Growth Food Stocks To Buy.  On January 16, Lake Street analyst Mark Smith lowered the firm’s price target on The ONE Group Hospitality, Inc. (NASDAQ:STKS) to $4 from $5 while maintaining a Buy rating on the shares. The revision followed the company’s release of preliminary fourth-quarter revenue and comparable sales results that came in below the firm’s expectations. Lake Street characterized the performance as a solid finish to the year despite a challengin ...

Exhibit 99.1 Our expectations with respect to our sales results for the fourth quarter and full year 2025 discussed below are based upon management estimates for the respective periods. Our expectations are subject to the completion of our financial closing procedures and any adjustments that may result from the completion of the review of our consolidated financial statements for the fourth quarter and full year 2025. Following the completion of our financial closing process and the review of our consolida ...

DENVER--(BUSINESS WIRE)--The ONE Group Hospitality, Inc. ("The ONE Group†or the "Company†) (Nasdaq: STKS) today announced development milestones achieved during the fourth quarter of 2025: Major Asset-Light Expansion in the Greater San Francisco Bay Area The ONE Group has entered into its largest asset-light development agreement in the Company's history, securing development rights for a total of ten restaurants, either Benihana or Benihana Express locations, throughout the Greater San Francisco Bay Area ...

Core Insights - The ONE Group Hospitality, Inc. reported a quarterly loss of $0.66 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.19, marking an earnings surprise of -247.37% [1] - The company's revenues for the quarter ended September 2025 were $180.2 million, missing the Zacks Consensus Estimate by 5.74% and down from $193.98 million a year ago [2] - The stock has underperformed the market, losing approximately 27.6% since the beginning of the year, while the S&P 500 has gained 15.6% [3] Financial Performance - Over the last four quarters, the company has surpassed consensus EPS estimates only once [2] - The current consensus EPS estimate for the upcoming quarter is $0.29 on revenues of $226.96 million, and for the current fiscal year, it is $0.30 on revenues of $836.65 million [7] Market Outlook - The estimate revisions trend for The ONE Group Hospitality was unfavorable prior to the earnings release, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [6] - The Retail - Restaurants industry, to which the company belongs, is currently ranked in the bottom 12% of over 250 Zacks industries, suggesting a challenging environment for stock performance [8]

Financial Data and Key Metrics Changes - Total consolidated GAAP revenues for Q3 2025 were $180.2 million, a decrease of 7.1% from $194 million in the same quarter last year [13] - Company-owned restaurants net revenue was $177.4 million, down 6.9% from $190.6 million in the prior year quarter, primarily due to a 5.9% reduction in consolidated comparable sales [14] - Net loss attributable to the ONE Group Hospitality was $76.7 million compared to a net loss of $9.3 million in the prior year, with a net loss per share of $2.75 compared to $0.53 [20][21] - Adjusted EBITDA was $10.6 million, a decrease of 28.9% from $14.9 million in the prior year [21] Business Line Data and Key Metrics Changes - The Friends with Benefits loyalty program gained over 200,000 new members during the quarter, with a total of over 6.5 million members [1][2] - Company-owned restaurant operating expenses as a percentage of net revenue increased to 67.6% from 66.2% in the prior year quarter, driven by marketing investments and cost inflation [16] - Restaurant operating profit decreased to $20.1 million or 11.3% of owned restaurant net revenue compared to $24.5 million or 12.8% in the prior year quarter [17] Market Data and Key Metrics Changes - The company experienced a 6.9% decline in traffic for Q3 2025, an improvement from a 7.5% decline in Q2 and a 7.8% decline in Q1 [29] - California sales saw a significant decline, with a negative impact of seven points sequentially between Q2 and Q3 [32] Company Strategy and Development Direction - The company is focusing on capital-efficient growth, with a redesigned Benihana location in San Mateo achieving record performance [3][4] - Plans to convert up to nine additional locations to either Benihana or STK formats, requiring about $1 million in capital investments per location [8] - The company aims to expand its franchise operations, with a focus on Benihana Express locations, which are expected to represent over 60% of the total footprint in the future [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fourth quarter, historically the strongest period, and highlighted targeted investments to capture holiday demand [10][25] - The company is not relying on macroeconomic recovery but is focused on strategic initiatives to deliver strong results regardless of broader economic trends [11] Other Important Information - The company has approximately $45 million in liquidity and plans to reduce discretionary capital expenditures in the coming year [9][22] - The company expects total GAAP revenues for fiscal year 2025 to be between $820 million and $825 million, reflecting anticipated consolidated comparable sales of negative 3% to negative 2% [23][24] Q&A Session Summary Question: Update on Benihana and STK same store sales growth - Management noted that Q3 2025 was the best quarter for traffic, with a 6.9% decline, an improvement from previous quarters, and attributed this to effective pricing strategies [28][29] Question: Drivers of traffic improvements in Q4 - Management indicated that marketing efforts and macroeconomic conditions in California contributed to the sequential improvement in traffic [32] Question: Update on Benihana franchising efforts - Management confirmed progress in franchising, with new deals in development for Benihana Express locations in California and the Bay Area [36] Question: Performance in Las Vegas market - Management reported improvements in STK performance in Las Vegas, although the overall restaurant performance remains mixed [41] Question: Details on loyalty program member behavior - Management shared that loyalty program members show increased frequency of visits, with promising early returns from the program [43][45] Question: Impact of recent price increases - Management indicated that early feedback on price increases has been neutral, with no significant pushback observed [46][47] Question: Details on impairment charges - Management confirmed that the majority of impairment charges were related to Kona Grill, with minor amounts from STK in Downtown New York [54] Question: Economics of restaurant conversions - Management stated that conversions to STK or Benihana would cost around $1 million, with a focus on leveraging existing infrastructure [56][58]

Core Insights - The One Group Hospitality (NASDAQ:STKS) missed Wall Street's revenue expectations in Q3 CY2025, reporting a 7.1% year-on-year decline in sales to $180.2 million, which was below the analyst estimates of $191.1 million [1][8] - The company's full-year revenue guidance was lowered to $822.5 million at the midpoint, which is 1.5% below analysts' estimates and reflects a 3.5% decrease from previous guidance [1][8] - The GAAP loss per share was reported at $2.75, significantly missing the consensus estimate of -$0.44 [1][8] Company Overview - The One Group Hospitality operates upscale dining establishments, including STK Steakhouse and Kona Grill, and also provides hospitality services for hotels and resorts [3] Revenue Performance - The One Group's revenue for the past 12 months stands at $820.6 million, indicating it is a small restaurant chain that may face disadvantages compared to larger competitors but has potential for faster growth due to more opportunities for new restaurant openings [5] - The company experienced a remarkable annualized revenue growth of 43.4% over the last six years, normalized for COVID-19 impacts, indicating strong demand [6] Financial Highlights - Q3 CY2025 results included an adjusted EBITDA of $10.56 million, which was below analyst expectations of $16.75 million, resulting in a 5.9% margin [8] - The operating margin fell to -4.4%, down from 2.1% in the same quarter last year, and same-store sales declined by 5.9% year-on-year [8] Future Outlook - Analysts project a revenue growth of 5.3% over the next 12 months, which represents a deceleration compared to the previous six years, suggesting potential demand challenges for the company's menu offerings [9]

Financial Performance - Total GAAP revenues decreased by 7.1% to $180.2 million from $194.0 million in Q3 2024[8] - Consolidated comparable sales decreased by 5.9%[8] - GAAP net loss attributable to The ONE Group increased to $76.7 million from $9.3 million, primarily due to a $64.0 million increase in income tax expense[8] - Adjusted EBITDA decreased to $10.6 million from $14.9 million[8] - Total revenues for the three months ended September 28, 2025, were $180.2 million, a decrease of 7.9% compared to $194.0 million for the same period in 2024[30] - Owned restaurant net revenue was $177.4 million for the three months ended September 28, 2025, down from $190.6 million in the prior year, representing a decline of 6.9%[30] - The net loss attributable to The ONE Group Hospitality, Inc. for the three months ended September 28, 2025, was $76.7 million, compared to a net loss of $9.3 million for the same period in 2024[30] - Total GAAP revenues for the nine months ended September 28, 2025, were $598,708,000, compared to $451,464,000 for the same period in 2024, marking an increase of 32.6%[36] Operational Changes - The company plans to open five to seven new venues in 2025[7] - The company completed the closure of six underperforming Grill locations and plans to convert up to nine additional units by the end of 2026[4] - A non-cash loss on impairment of $3.4 million was recorded during Q3 2025, primarily related to underperforming restaurants[13] - Cash and cash equivalents decreased to $5.5 million as of September 28, 2025, from $27.6 million at December 31, 2024[34] - Total current assets decreased to $46.5 million as of September 28, 2025, compared to $69.3 million at December 31, 2024[34] - Total liabilities increased slightly to $762.6 million as of September 28, 2025, from $758.7 million at December 31, 2024[34] Sales and Revenue Trends - The company expects total GAAP revenues for 2025 to be between $820 million and $825 million, with consolidated comparable sales projected to decline by 3% to 2%[16] - Same Store Sales for US STK Owned Restaurants decreased by 8.3% year-to-date compared to 2023, with Q3 showing a decline of 11.4%[36] - The company experienced a decrease in Same Store Sales for Grill Concepts Owned Restaurants, which fell by 13.2% year-to-date compared to 2023[36] Profitability Metrics - Operating loss for the nine months ended September 28, 2025, was $3.5 million, an improvement from an operating loss of $3.2 million for the same period in 2024[30] - Total owned operating expenses for the three months ended September 28, 2025, were $157.3 million, a decrease of 5.3% from $166.1 million in the same period of 2024[30] - The company reported a net loss per common share of $2.75 for the three months ended September 28, 2025, compared to a loss of $0.53 per share for the same period in 2024[30] - General and administrative expenses as a percentage of total revenues increased to 7.4% for the three months ended September 28, 2025, from 6.6% in the same period of 2024[32] Restaurant Performance - Restaurant Operating Profit for the nine months ended September 28, 2025, was $86,838,000, compared to $67,012,000 for the same period in 2024, indicating a year-over-year increase of 29.5%[41] - STK restaurant operating profit for Q3 2025 is $5,879,000, down from $6,547,000 in Q3 2024, representing a decrease of 10.2%[42] - Benihana restaurant operating profit for Q3 2025 is $13,928,000, a decrease of 18.0% compared to $17,110,000 in Q3 2024[42] - Core Grill Concepts restaurant operating profit for Q3 2025 is $131,000, significantly down from $1,416,000 in Q3 2024, a decline of 90.8%[42] - STK restaurant EBITDA for Q3 2025 is $5,790,000, a decrease of 7.4% from $6,250,000 in Q3 2024[42] - Benihana restaurant EBITDA for Q3 2025 is $14,364,000, down 18.5% from $17,679,000 in Q3 2024[42] - Core Grill Concepts restaurant EBITDA for Q3 2025 is $22,000, a decline of 98.5% compared to $1,479,000 in Q3 2024[42] - Restaurant EBITDA as a percentage of owned restaurant net revenue was 11.5% for the three months ended September 28, 2025, compared to 13.0% for the same period in 2024[41] - Non-core Grill Concepts restaurant operating profit for Q3 2025 is $(12,000), improving from $(783,000) in Q3 2024[42]

Core Insights - One Group Hospitality reported a 20.2% increase in GAAP revenue for Q2 2025, reaching $207.4 million, primarily due to the acquisition of Benihana, although it fell short of analyst expectations of $208.9 million [1][5] - The company experienced a diluted non-GAAP EPS of $0.05, a significant decline of 73.7% year-over-year [2][5] - Comparable sales decreased by 4.1%, indicating ongoing challenges in sales performance across existing locations [1][6] Financial Performance - GAAP revenue for Q2 2025 was $207.4 million, up from $172.5 million in Q2 2024, but below the estimated $208.9 million [2][5] - Restaurant EBITDA rose to $31.9 million, a 7.8% increase from the previous year, but the EBITDA margin declined to 15.7% from 17.5% [2][5] - Operating expenses increased to 84.7% of owned restaurant net revenue, up from 82.6% in Q2 2024, reflecting rising cost pressures [7] Business Overview and Strategy - One Group Hospitality operates upscale dining brands including STK and Benihana, focusing on "vibe dining" experiences [3] - The company aims to expand its reach with a capital-light strategy, planning to open five to seven new venues in 2025 [4] - Management emphasizes operational efficiency and customer experience, with a focus on scaling the loyalty program to enhance customer engagement [4][10] Comparable Sales and Brand Performance - Benihana reported a 0.4% increase in same-store sales, while STK experienced a 4.9% decline [6] - Grill concepts faced a 14.6% drop in same-store sales, attributed to competition from larger chains [6] - STK saw a 2.8% increase in customer transactions due to value-driven menu strategies [6] Cost Structure and Debt - General and administrative costs were reported at $11.662 million, with interest expenses at $10.295 million due to higher debt levels from acquisitions [7][8] - Long-term debt stood at $327.5 million, with $15.1 million in available cash and credit card receivables [8] - The company recorded lease exit costs and other one-time expenses totaling $5.6 million, impacting profitability [7] Expansion and Future Guidance - Four new venues opened in the first half of FY2025, including owned and franchised locations [9] - The company projects Q3 GAAP revenue between $190 million and $195 million, with FY2025 revenue guidance of $835 million to $870 million [11] - Management anticipates continued focus on comparable sales recovery and margin improvement as integration efforts progress [12]

Core Insights - The ONE Group Hospitality, Inc. reported quarterly earnings of $0.05 per share, missing the Zacks Consensus Estimate of $0.08 per share, representing a -37.50% earnings surprise [1] - The company posted revenues of $207.38 million for the quarter ended June 2025, which was 0.68% below the Zacks Consensus Estimate, compared to $172.49 million in the same quarter last year [2] - The stock has gained approximately 4.5% since the beginning of the year, underperforming the S&P 500's gain of 7.6% [3] Earnings Performance - Over the last four quarters, the company has surpassed consensus EPS estimates only once [2] - The current consensus EPS estimate for the upcoming quarter is -$0.06, with expected revenues of $204.02 million, and for the current fiscal year, the estimate is $0.44 on revenues of $852.64 million [7] Market Outlook - The company's earnings outlook will be crucial for future stock performance, with management's commentary on the earnings call being a key factor [3][4] - The Zacks Rank for The ONE Group Hospitality is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Retail - Restaurants industry, to which The ONE Group Hospitality belongs, is currently in the top 41% of Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Wendy's, a competitor in the same industry, is expected to report quarterly earnings of $0.25 per share, reflecting a year-over-year decline of -7.4% [9]

Financial Data and Key Metrics Changes - The company achieved total consolidated GAAP revenues of $207.4 million, an increase of 20.2% from $172.5 million in the same quarter last year [20] - Adjusted EBITDA was $23.4 million, reflecting a 7.3% increase from $21.8 million in the prior year quarter [27] - Net loss was $10.1 million compared to a net loss of $7.3 million in the previous year, with adjusted net income at $1.7 million, down from $6.3 million [26][27] Business Line Data and Key Metrics Changes - Company-owned restaurant net revenues increased by 20.6% to $203.9 million, primarily due to the additional days of ownership of Benihana and Ra Sushi [20] - Restaurant EBITDA decreased to 15.4% from 17.5% in the prior year quarter, with Benihana locations at 18.5% and STK locations at 15.9% [22] - The company closed five locations that were underperforming or nearing lease renewals, indicating a focus on optimizing the growth portfolio [14] Market Data and Key Metrics Changes - The company noted that traffic in the upscale casual segment remains challenged, particularly in Las Vegas, which has been impacted by shifting convention schedules and visitor traffic declines [51][53] - Demand remains strong during peak periods, especially on weekends, with strategies in place to maximize throughput [8] Company Strategy and Development Direction - The company aims to drive same-store sales growth through operational excellence, culinary innovation, and targeted marketing [8] - A focus on asset-light growth opportunities is evident, with plans to open five to seven new venues in 2025, including a company-owned Benihana in Seattle [12][30] - The integration of Benihana is progressing ahead of plan, with significant synergies expected to be realized by the end of 2026 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a strong fourth quarter, driven by holiday traffic and improved logistics at Benihana [55][56] - The company is optimistic about its ability to navigate the current economic environment, focusing on internal factors rather than external economic conditions [58][59] - The loyalty program launched in Q2 is expected to enhance guest frequency and spending, with significant engagement anticipated in the upcoming quarters [90] Other Important Information - The company has approximately $50 million in liquidity, providing operational flexibility [15] - The new Benihana location in San Mateo has been performing exceptionally well, serving as a prototype for future openings [39][40] Q&A Session Summary Question: What were the issues faced by Benihana last year? - Management indicated that HVAC issues were significant challenges post-acquisition, which have since been addressed for better sales opportunities this year [35][36] Question: Can you discuss the new restaurant in San Mateo? - The San Mateo location has a different design, eliminating the sushi bar to increase table capacity, and has seen strong initial performance [37][39] Question: How is STK managing traffic in the current environment? - The strategy focuses on value pricing and happy hour promotions to drive traffic, while also emphasizing premium products [42] Question: What are the regional differences in same-store sales? - Vegas has been a challenged market due to shifting convention schedules and visitor traffic declines, while other regions performed consistently [51][53] Question: What gives confidence in maintaining annual guidance? - Management highlighted the strong performance of Benihana and STK, particularly during the holiday season, as key factors for confidence in guidance [55][56] Question: Can you elaborate on franchising efforts for Benihana? - There is growing interest from existing franchisees, and the company is actively participating in industry events to build a pipeline for new agreements [75][78] Question: What is the outlook for food inflation? - While some commodity prices have stabilized, beef prices remain a concern, but the company is prepared to navigate these challenges through innovation [70][72]