The ONE Group Hospitality, Inc. (STKS) reported preliminary fourth‑quarter and full‑year 2025 sales figures that fell short of consensus estimates. Total GAAP revenue for the year rose 20% to $805 million, but the figure was $20.94 million below the $825.94 million analysts had expected. Fourth‑quarter revenue was $207 million, a 6.8% decline from the $222.44 million consensus and $222 million reported in Q4 2024, reflecting a 1.8% drop in comparable sales for the quarter.
The revenue miss is largely attributable to the timing of the Benihana acquisition, which added $100 million in top‑line growth but also introduced integration costs that offset some of the upside. Despite the shortfall, the 20% year‑over‑year increase remains the strongest growth the company has posted since the acquisition, underscoring the strategic value of the deal. The full‑year comparable sales decline of 3.7% is driven by the closure of several Grill Concepts locations and a one‑day reduction in the fiscal fourth quarter, which together compressed the sales mix.
Management highlighted a conversion strategy that targets underperforming Grill Concepts venues, converting them to higher‑margin Benihana or STK formats at an estimated $1 million per conversion. The company has already completed a conversion of an RA Sushi location to an STK in Scottsdale, and it plans to pursue additional conversions to accelerate margin expansion and leverage existing real‑estate assets.
CEO Emanuel Hilario noted that “strong headwinds” continue to weigh on comparable sales, citing macro‑economic pressures such as rising labor costs and consumer spending uncertainty. He added that the company’s focus on operational initiatives and the robust holiday season helped mitigate some of the impact, but that the fiscal calendar change and portfolio optimization efforts contributed to the Q4 decline.
The results paint a mixed picture: revenue growth is driven by the Benihana acquisition, yet organic sales are under pressure. The conversion strategy is intended to shift the mix toward higher‑margin concepts, potentially offsetting the decline in comparable sales and improving profitability over the long term. Investors will be watching how quickly the company can convert more venues and whether the higher‑margin brands can sustain the momentum needed to reverse the downward trend in comparable sales.
The company will participate in the 28th Annual ICR Conference, hosting a fireside chat on January 13 and meeting investors on January 12‑13, providing an opportunity for management to discuss the results and future outlook in more detail.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.