ONE Group Hospitality (STKS) Misses Q1 EPS by 1c, Revenues Beat

ONE Group Hospitality (NASDAQ: STKS) reported Q1 EPS of $0.01, $0.01 worse than the analyst estimate of $0.02. Revenue for the quarter came in at $19.5 million versus the consensus estimate of $18.7 million.

Highlights for the first quarter ended March 31, 2018 were as follows:

• Total GAAP revenue was $19.5 million compared to $20.4 million in the same period last year;
• Comparable sales* globally increased 6.6% compared to the same period last year. Domestic comparable sales for STK restaurants rose 7.3% and international comparable sales rose 4.5%;
• GAAP net income from continuing operations before income taxes was $143,000 compared to a loss of $511,000 for the same period last year;
• GAAP net income attributable to The ONE Group Hospitality, Inc. was $231,000 or $0.01 per share compared to GAAP net loss of $402,000 or $0.02 loss per share for the same period last year;
• Adjusted EBITDA** increased 11.6% to $1.8 million compared to $1.6 million the same period last year; and,
• Total restaurant expenses decreased 410 basis points to 89.0% from 93.1% as a percentage of revenues.

Emanuel “Manny” Hilario, Chief Executive Officer, said, “The ONE Group is off to a strong start this year with a notable 6.6% gain in comparable sales coupled with an 11.6% increase in Adjusted EBITDA despite a non-recurring Super Bowl event from 2017 that negatively impacted year over year revenues by $1.7 million and Adjusted EBITDA by $0.7 million. We are particularly pleased with the 7.3% increase in comparable sales for the domestic STK restaurants and the 410 basis points increase in margin for our domestic STK restaurants. Our results demonstrate that we are making headway executing our four-point strategy of driving comparable sales; focusing growth on license and management deals; improving operational efficiency in the restaurants; and reducing corporate G&A expenses, excluding stock-based compensation. We believe that the momentum we have achieved should continue and that there is still room for further sales improvements and greater profitability. We believe that 2018 is poised to be a highly productive year for our business.”

2018 Targets

The Company is providing the following targets for 2018:

• Total GAAP revenues between $80 million and $85 million;
• Total food and beverage sales at all our owned and managed units to be between $170 million and $180 million;
• Comparable sales growth of about 2% to 3%;
• Total food and beverage costs to be approximately 25% to 26%;
• Adjusted EBITDA between $9 million and $10 million, representing approximately 30% - 40% growth compared to the prior year; and,
• Total capital expenditures of approximately $3 million, which is significantly less than prior years and reflective of our capital-light strategy.

For earnings history and earnings-related data on ONE Group Hospitality (STKS) click here.

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