ONE Group Hospitality (NASDAQ:STKS) outlined improving sales momentum and a more disciplined growth plan as executives reviewed fourth quarter and full-year 2025 results, while also providing fiscal 2026 guidance on the company’s earnings call.
2025 results shaped by Benihana inclusion, closures, and a shorter fiscal year
President and COO Manny Hilario said total GAAP revenue for full-year 2025 was approximately $805 million, up about 20% year-over-year, primarily driven by the inclusion of Benihana for all twelve periods. Full-year comparable sales declined about 3.7%, which management attributed to continued pressure across the full-service dining segment.
Comparable sales improved sequentially; management cites early 2026 inflection
Fourth quarter consolidated comparable sales declined approximately 1.8%, which Hilario said represented roughly four points of sequential improvement from the third quarter. He said all brands improved sequentially during the quarter and that momentum “has accelerated to 2026,” noting year-to-date consolidated comparable sales were “slightly positive.”
Hilario added that year-to-date comparable sales were positive at both Benihana and STK. He described Kona Grill’s turnaround as “gaining traction,” with year-to-date comparable sales down mid-single digits but transactions positive, which he said marked the brand’s best same-store performance since the beginning of 2023.
In response to a question about fourth-quarter revenue coming in below some expectations, Hilario pointed to Benihana execution, particularly table turn times. He said the company had expected to reduce average turns to around 90 minutes but ended closer to about 105 minutes, prioritizing guest experience over speed.
Margins, costs, and notable fourth-quarter items
Thaung said fourth quarter company-owned restaurant cost of sales improved 80 basis points to 19.6% of company-owned restaurant net revenue, citing Benihana integration synergies and strategic cost management, including contracted beef pricing. Company-owned restaurant operating expenses were 61.5% of net revenue, flat year-over-year, which she said reflected disciplined cost control despite sales deleverage, marketing investment, and general inflation.
Restaurant operating profit (excluding Grille Concepts restaurants closed or to be closed) was $38.9 million, or 19.5% of company-owned restaurant net revenue, up 10 basis points year-over-year.
General and administrative expenses increased to $14.5 million from $13.3 million, driven by increased marketing expense. Excluding stock-based compensation, adjusted G&A was $13.4 million compared with $11.7 million in the prior-year quarter, and 6.5% of revenue versus 5.3%.
The company recorded $7.2 million in impairment charges tied to one Kona Grill restaurant and the Kona Grill trade name, which Thaung said was primarily related to Grille portfolio optimization. Pre-opening expenses were approximately $1.8 million, largely related to pre-open rent and training payroll for restaurants slated to open in early 2026.
Operating income was $4.5 million compared to $12.1 million a year earlier. Net loss attributable to the company was $6.4 million versus net income of $1.6 million in the prior-year quarter, with management attributing the change primarily to the impairment charges and exit costs tied to portfolio optimization. Net loss available to common stockholders was $15.3 million, or $0.49 per share, compared to a $5.9 million loss, or $0.19 per share, in the prior-year quarter. Adjusted EBITDA attributable to the company was $28.1 million, down from $31.0 million.
Thaung said the company ended the quarter with $4.7 million in cash and restricted cash, $27.2 million available under its revolving credit facility, and $7 million outstanding on the revolver at quarter end. She also noted the term loan did not have a financial covenant under current conditions.
Strategic priorities: execution, asset-light growth, conversions, and balance sheet discipline
Management framed its plan around four priorities for 2026 and beyond:
- Accelerating same-store sales through execution: The company is guiding to a 1%–3% comparable sales increase in fiscal 2026, supported by operational benchmarks including social review scores, secret shopper evaluations, and EquiShare assessments. For Benihana, management emphasized improving reservation management and throughput while maintaining guest experience. Thaung and Hilario also reiterated that the company contracted beef pricing through September 2026 to reduce exposure to U.S. beef market volatility.
- Capital-efficient growth: In the fourth quarter, the company secured development rights for 10 Benihana and Benihana Express locations in California, which Hilario called the company’s largest asset-light development agreement to date, and additional agreements for a franchise Benihana and a licensed Benihana Express in the Florida Keys. Management also discussed non-traditional expansion in sports and entertainment venues, including renewal of a concession agreement in Phoenix and a new Benihana concession at UBS Arena.
- Portfolio optimization and conversions: In 2025, the company exited six underperforming RA Sushi and Kona Grill locations. Management said up to five additional Kona Grill locations are slated for conversion to Benihana or STK by the end of 2026, with expected conversion costs of $1.0 million to $1.5 million each and anticipated EBITDA accretion. Hilario also cited a recent RA Sushi-to-STK conversion in Scottsdale completed in about eight weeks at roughly $1 million, running at about $7 million in annualized sales. On timing, management said five restaurants are currently closed and in the conversion pipeline, with a goal to reopen them by around July 2026, depending largely on permitting.
- Maintaining balance sheet flexibility: The company plans to reduce discretionary capital expenditures and target company-owned development projects averaging $1.5 million or less in build-out costs, while working through an existing lease pipeline rather than adding new commitments.
Fiscal 2026 outlook and key operational themes
Thaung provided fiscal 2026 targets that include total GAAP revenue of $840 million to $855 million, management/franchise/licensed revenue of $14 million to $15 million, and Adjusted EBITDA of $100 million to $110 million. The company also guided to total company-owned operating expenses of approximately 82% to 83% of company-owned restaurant net revenue and total G&A (excluding stock-based compensation) of about $53 million. Capital expenditures net of landlord allowances are expected to be $38 million to $42 million, with pre-opening expenses of $5 million to $6 million. The company plans to open 6 to 10 new venues.
On pricing, Hilario told analysts the company was not planning near-term price actions and would typically consider its next pricing move in the fourth quarter. He said the company’s 2026 outlook includes pricing running around 5% to 6%, largely reflecting pricing taken in the fourth quarter of 2025.
Management also discussed growth opportunities in off-premises sales and loyalty. Hilario said off-premises mix was in the “low double digits” as a percentage of sales, with an internal stretch goal of reaching 20% over time, and he emphasized a push toward expanding curbside capabilities. The company’s “Friends with Benefits” loyalty program, launched in 2025, remains early-stage, with management focused on building organization and learning how to drive incremental traffic through targeted marketing.
About ONE Group Hospitality (NASDAQ:STKS)
ONE Group Hospitality Inc is a full-service hospitality company primarily engaged in the development, ownership and operation of upscale restaurant and lounge concepts. The company’s flagship brand, STK, combines a modern steakhouse menu with a high-energy lounge atmosphere, offering signature cuts of beef, fresh seafood, sushi selections, craft cocktails and an extensive wine program. ONE Group’s concept emphasizes a seamless blend of fine dining and nightlife, catering to guests seeking both culinary excellence and an immersive social experience.
Headquartered in El Segundo, California, ONE Group deploys a mixed model of company-owned and franchised locations across multiple markets.
