Workflow
The ONE Group Hospitality(STKS)
icon
Search documents
The ONE Group Hospitality: Nothing Lasts Forever, Not Even The Fall Of Comps
Seeking Alpha· 2024-12-05 14:36
Group 1 - The article highlights the challenges faced by the fast food industry, indicating that it is not the only sector experiencing tight checks and declining traffic [1] - The author emphasizes the importance of advanced analytical models and specialized valuation techniques in providing insights into restaurant stocks [1] - The coverage of the analysis includes various segments of the restaurant industry such as QSR, fast casual, casual dining, fine dining, and family dining [1] Group 2 - The author has a strong background in Business Administration and Accounting, complemented by an MBA in Forensic Accounting and Controllership, which enhances the credibility of the analysis [1] - The company, Goulart's Restaurant Stocks, focuses on delivering detailed insights and actionable strategies to help investors make informed decisions in the restaurant sector [1] - The author has experience in accounting and business consulting across LATAM, indicating a broad understanding of the market dynamics in the region [1]
The ONE Group Hospitality(STKS) - 2024 Q3 - Earnings Call Transcript
2024-11-09 14:56
Financial Data and Key Metrics Changes - Total consolidated GAAP revenues increased by 152.3% to $194 million from $76.9 million in the same quarter last year [29] - Owned restaurant net revenue rose by 158.6% to $190.6 million from $73.7 million, primarily due to contributions from Benihana and RA Sushi [29] - Restaurant operating profit increased by 90 basis points to 13.2% compared to 12.3% in the same quarter last year [33] - Net loss available to common stockholders was $16 million or $0.52 per share, compared to a net loss of $3.1 million in the same quarter last year [38] - Adjusted EBITDA for the third quarter was $14.9 million, up from $3.1 million in the same quarter last year [39] Business Line Data and Key Metrics Changes - Comparable sales decreased by 8.8%, with Benihana down 4.2%, STK down 11.1%, and grill concepts down 70% [29] - Restaurant operating profit at Benihana was 70% [33] - Owned restaurant cost of sales as a percentage of net revenue increased by 380 basis points to 20.9% [31] - Owned restaurant operating expenses as a percentage of net revenue increased by 300 basis points to 65.9% [32] Market Data and Key Metrics Changes - The company experienced robust demand on Fridays and Saturdays across all brands, focusing on maximizing reservations and throughput during peak times [13] - The restaurant landscape is characterized by deep discounting and promotional activity, with competitors offering all-day happy hours and other promotions [51][52] Company Strategy and Development Direction - The company aims to become the global leader in Vibe Dining, focusing on driving sales through operations, marketing, and culinary strategies [7][12] - Plans to open six new venues by the end of 2024, including five company-owned restaurants and one managed STK [22] - The company is pursuing asset-light growth through franchising and management contracts, particularly for Benihana [24][76] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic headwinds and consumer uncertainty but expressed confidence in the company's portfolio and long-term vision [49] - The company anticipates improving same-store sales trends for the third and fourth quarters, projecting total GAAP revenues of $660 million to $680 million for 2024 [45] - Management expects consolidated margins to improve, targeting around 17% for 2025, with potential upside due to synergies from acquisitions [80] Other Important Information - The company finished the quarter with over $70 million in liquid resources, including cash and undrawn credit facilities [25] - Approximately $2.3 million was returned to shareholders through share repurchases during the quarter [26] Q&A Session Summary Question: Update on industry trends and competition - Management noted competitors are engaging in heavy discounting and promotions, such as all-day happy hours, and the company is responding with its own promotions and loyalty programs [51][56] Question: Development delays and construction processes - Management indicated that development timing is controlled by a focus on asset-light growth and that they have opened three restaurants in the last 60 days [58][59] Question: Potential closures and lease evaluations - Management confirmed that they will evaluate leases as they come due and will not continue with locations that do not meet profitability criteria [62][64] Question: Monthly comp breakdown and exit rates - Management acknowledged a trend of softening in the first month of each quarter, with improvements in the following months, and provided guidance for the fourth quarter [66][68] Question: Four-wall margins and growth opportunities - Management targets consolidated margins around 17% for 2025, with expectations for improvement due to operational efficiencies and synergies from acquisitions [80]
The ONE Group Hospitality(STKS) - 2024 Q3 - Quarterly Report
2024-11-07 21:41
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-37379 | --- | --- | --- | |---------------------------------------------------------------------------|--- ...
The ONE Group Hospitality(STKS) - 2024 Q3 - Quarterly Results
2024-11-07 21:38
Revenue Performance - Total GAAP revenues increased 152.3% to $194.0 million from $76.9 million[1] - Total revenues for the nine months ended September 30, 2024, reached $451,464, up from $242,833 in the prior year, indicating a growth of approximately 86%[6] - The company reported GAAP revenues of $193,975,000 for the three months ended September 30, 2024, compared to $76,884,000 for the same period in 2023[10] - Management, license, franchise, and incentive fee revenue for the three months ended September 30, 2024, was $3,388,000, compared to $3,184,000 for the same period in 2023[10] Profitability Metrics - Restaurant Operating Profit increased 175.6% to $25.1 million from $9.1 million[1] - Adjusted EBITDA for the three months ended September 30, 2024, was $14,803,000, compared to $3,023,000 for the same period in 2023, indicating a substantial improvement in financial performance[12] - Restaurant Operating Profit for the nine months ended September 30, 2024, was $68,181 million, up from $33,919 million in 2023, representing a significant increase[16] - STK restaurant operating profit for the three months ended September 30, 2024, was $6,547 million, with a profit margin of 14.6%[17] - Benihana restaurant operating profit for the three months ended September 30, 2024, was $17,708 million, with a profit margin of 17.0%[17] Costs and Expenses - Total costs and expenses for the three months ended September 30, 2024, were $196,995, compared to $78,839 in the same period last year, reflecting an increase of 150%[6] - General and administrative expenses for the three months ended September 30, 2024, were $12,785 million, compared to $7,280 million in 2023, showing an increase in operational costs[16] - General and administrative expenses as a percentage of total revenues decreased to 6.6% for the three months ended September 30, 2024, from 9.5% in the prior year[7] - Transaction and exit costs for the nine months ended September 30, 2024, totaled $9,199 million, indicating significant restructuring expenses[19] - Transition and integration expenses for the three months ended September 30, 2024, were $6,274 million, reflecting ongoing integration efforts[19] Financial Position - Cash and short-term credit card receivables at the end of the quarter totaled $36.2 million, with $34.1 million available under the revolving credit facility[2] - Total current assets increased to $63,472 as of September 30, 2024, from $46,680 at December 31, 2023, showing a growth of approximately 36%[8] - Total liabilities rose to $753,928 as of September 30, 2024, compared to $249,885 at December 31, 2023, indicating a significant increase of about 202%[8] - Cash and cash equivalents increased to $28,185 as of September 30, 2024, from $21,047 at December 31, 2023, representing a growth of approximately 34%[8] Guidance and Future Plans - 2024 total GAAP revenue guidance set at $660 to $680 million[3] - Consolidated Adjusted EBITDA guidance for 2024 is $71 to $76 million[4] - Company plans to open five to six Company-owned locations annually while focusing on asset-light development[1] - The integration of Benihana and RA Sushi is progressing well, with synergies expected to enhance margins[1] - Company closed four RA Sushi locations in October to optimize the restaurant portfolio[2] Losses and Adjustments - The net loss attributable to The ONE Group Hospitality, Inc. for the three months ended September 30, 2024, was $(8,890), compared to a net loss of $(3,098) for the same period in 2023[6] - The company reported an operating loss of $(3,020) for the three months ended September 30, 2024, compared to an operating income of $4,368 for the same period in 2023[6] - Adjusted net loss income available to common stockholders for the three months ended September 30, 2024, was $(9,383) million, compared to $(2,977) million in 2023[19] - Adjusted net income per share for the three months ended September 30, 2024, was $(0.30), compared to $(0.09) in 2023, indicating a decline in profitability per share[19] Sales Performance - Comparable sales decreased 8.8%[1] - Same Store Sales for US STK Owned Restaurants decreased by 11.4% in Q1 2024 compared to Q1 2023, while US STK Managed Restaurants saw a decrease of 8.6% in the same period[11] - Total food and beverage sales at owned and managed units reached $222,869,000 for the three months ended September 30, 2024, compared to $102,213,000 for the same period in 2023, representing a significant increase[10] - For the nine months ended September 30, 2024, total food and beverage sales at owned and managed units were $533,592,000, up from $321,421,000 for the same period in 2023[10]
Why The ONE Group Hospitality's Bold Bet On Benihana Could Pay Off Big
Seeking Alpha· 2024-09-05 01:24
Core Viewpoint - One Group Hospitality Inc. is undergoing a significant transformation following its acquisition of Benihana, which is expected to enhance its market position in the high-energy dining sector and has not yet been fully reflected in its stock price [1][16]. Company Overview - One Group Hospitality is an international restaurant company focused on premium dining experiences, emphasizing unique and high-energy offerings beyond traditional food and beverage services [2]. Acquisition Details - The acquisition of Safflower Holdings Inc., the parent company of Benihana, was announced earlier this year, positioning One Group to leverage Benihana's iconic brand and experiential dining model [4][5]. - The total consideration for the acquisition was $365 million, with a transaction multiple of 5.2x Benihana's 2023 run rate adjusted EBITDA of approximately $70 million [5][6]. Financial Metrics Post-Acquisition - Following the acquisition, One Group's financial metrics have shown substantial growth, including a 138% increase in TTM system-wide revenue from $436 million to $1,039 million and a 163% increase in TTM adjusted EBITDA from $40 million to $105 million [7][8]. - The company's gross profit margin improved from 18.46% to 19.38%, and operating income surged over 500% year-over-year, from $2 million to $12.3 million [9][10]. Market Reaction and Valuation - Despite the positive financial performance, One Group's stock price has decreased by over 40% year-to-date, indicating a significant undervaluation relative to its growth and the goodwill from the acquisition, which is reported at $145 million [11][12]. - The company's market cap has fallen to below $120 million, despite substantial increases in revenue and earnings, suggesting a disconnect between market perception and actual performance [11][16]. Future Growth Potential - One Group has plans for further expansion, with new venue openings already in progress, which could enhance its total addressable market (TAM) significantly, expanding beyond 800 locations post-acquisition [5][6]. - The anticipated annual synergies from the acquisition are forecasted at $20 million for at least three years, which could further improve financial performance [5][6].
The ONE Group Hospitality, Inc. (STKS) Beats Q2 Earnings Estimates
ZACKS· 2024-08-06 23:40
The ONE Group Hospitality, Inc. (STKS) came out with quarterly earnings of $0.08 per share, beating the Zacks Consensus Estimate of $0.06 per share. This compares to earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 33.33%. A quarter ago, it was expected that this company would post earnings of $0.02 per share when it actually produced a loss of $0.02, delivering a surprise of -200%. Over the last four quarter ...
The ONE Group Hospitality(STKS) - 2024 Q2 - Quarterly Report
2024-08-06 20:38
Financial Performance - Total revenues increased by $89.1 million, or 106.8%, to $172.5 million for the three months ended June 30, 2024, compared to $83.4 million for the same period in 2023, primarily due to the Benihana Acquisition[72]. - Same store sales decreased by 7.0% in the second quarter of 2024 compared to the second quarter of 2023[72]. - Restaurant operating profit increased by $18.1 million, or 151.3%, to $30.0 million for the three months ended June 30, 2024, compared to $11.9 million for the same period in 2023[72]. - Total revenues increased by $91.6 million, or 55.2%, to $257.5 million for the six months ended June 30, 2024, compared to $165.9 million for the same period in 2023[72]. - Restaurant operating profit increased by $18.3 million to $43.1 million for the six months ended June 30, 2024, compared to $24.8 million for the same period in 2023[72]. - The operating income for the three months ended June 30, 2024, was $1.654 million, a decrease from $6.323 million in the same period of 2023[75]. - Net loss attributable to The ONE Group Hospitality, Inc. for the three months ended June 30, 2024, was $6.929 million, compared to a net income of $3.174 million in the same period of 2023[75]. - Owned restaurant net revenue for the six months ended June 30, 2024, reached $250.529 million, compared to $158.502 million in the same period of 2023, marking a 58% increase[75]. - Adjusted EBITDA for the three months ended June 30, 2024, was $23.940 million, compared to $8.532 million for the same period in 2023[81]. Costs and Expenses - Total costs and expenses for the three months ended June 30, 2024, were $170.840 million, up from $81.348 million in the same period of 2023, reflecting a rise of 109.4%[75]. - Owned restaurant cost of sales for the three months ended June 30, 2024, was 21.2% of total revenues, down from 24.0% in the same period of 2023[77]. - General and administrative expenses, including stock-based compensation, were 6.2% of total revenues for the three months ended June 30, 2024, compared to 9.6% in the same period of 2023[77]. - Cost of sales for owned restaurants increased by $16.5 million, or 43.4%, to $54.6 million for the six months ended June 30, 2024, primarily due to the acquisition of Benihana and RA Sushi[90]. - General and administrative costs rose by $2.7 million, or 17.3%, to $18.2 million for the six months ended June 30, 2024, attributed to increased headcount from the Benihana acquisition[90]. - Depreciation and amortization expense increased to $13.3 million for the six months ended June 30, 2024, compared to $7.2 million for the same period in 2023, mainly due to the acquisition of Benihana and RA Sushi[90]. - Transaction and exit costs amounted to $8.3 million for the six months ended June 30, 2024, primarily related to the Benihana acquisition[90]. Acquisition and Expansion - The Benihana Acquisition was completed for $365.0 million on May 1, 2024, which includes most of the Benihana restaurants and all RA Sushi restaurants in the U.S.[68]. - The acquisition of Benihana and RA Sushi restaurants contributed $88.7 million in revenues for the two-month period owned by the company[86]. - The company intends to open eight to eleven new venues in 2024[66]. - The company plans to continue focusing on market expansion and new product development to drive future growth[75]. - The company opened STK Washington DC in March 2024 and plans to open a RA Sushi in Plantation, FL in July 2024, contributing to its market expansion strategy[100]. - The company expects to open an additional four to five Company-owned restaurants over the next six months[94]. Financing and Cash Flow - A credit agreement was entered into providing a $350.0 million senior secured term loan facility and a $40.0 million senior secured revolving credit facility[70]. - Interest expense, net, for the three months ended June 30, 2024, was $7.865 million, compared to $1.642 million for the same period in 2023[80]. - Interest expense, net was $7.9 million for the three months ended June 30, 2024, compared to $1.6 million for the same period in 2023, due to borrowing $350.0 million for the Benihana acquisition[88]. - Net cash provided by operating activities was $6.6 million for the six months ended June 30, 2024, down from $13.1 million in the same period of 2023[100]. - Net cash used in investing activities was $403.5 million for the six months ended June 30, 2024, primarily due to the Benihana acquisition costing $368.6 million[100]. - Net cash used in financing activities for the six months ended June 30, 2024, was $408.8 million, consisting of net proceeds from borrowings ($333.8 million) and issuance of preferred stock and warrants ($138.9 million), partially offset by repayment of Goldman Sachs debt ($73.6 million)[100]. - As of June 30, 2024, the company had $32.8 million in cash and cash equivalents and $350.0 million in long-term debt[94]. Legal and Compliance - The company is subject to class action lawsuits related to compliance with labor laws, which may require significant management attention and financial resources[104]. - The company believes that accrual and disclosure for legal matters are adequately provided for in its consolidated financial statements[104]. - The company intends to exclude the acquired Benihana business from its assessment of internal controls over financial reporting for the year ended December 31, 2024[103]. - The company concluded that its disclosure controls and procedures were effective as of June 30, 2024[102]. - The company has implemented new processes and internal controls following the Benihana acquisition to enhance financial reporting[103].
Is The ONE Group Hospitality (STKS) Stock Undervalued Right Now?
ZACKS· 2024-07-30 14:46
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks. One stock to keep an eye on is The ONE Group Hospitality (STKS) . STKS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.27. This compares to it ...
Is The ONE Group Hospitality (STKS) a Great Value Stock Right Now?
ZACKS· 2024-06-05 14:46
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers. Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental ...
How Much Upside is Left in The ONE Group Hospitality (STKS)? Wall Street Analysts Think 47.5%
ZACKS· 2024-06-03 14:56
Core Viewpoint - The ONE Group Hospitality, Inc. (STKS) shows potential for significant upside, with a mean price target of $7.67 indicating a 47.5% increase from its current price of $5.20 [1] Price Targets and Estimates - The mean estimate consists of three short-term price targets with a standard deviation of $1.53, suggesting variability among analysts [2] - The lowest estimate of $6 indicates a 15.4% increase, while the highest estimate suggests a 73.1% surge to $9 [2] - A low standard deviation indicates a high degree of agreement among analysts regarding the stock's price movement [7] Earnings Estimates - Analysts are optimistic about STKS's earnings prospects, as indicated by a positive trend in earnings estimate revisions [4][9] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 112.5%, with no negative revisions [10] - STKS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [11]