ONE Group Hospitality (STKS) Misses Q1 EPS by 1c, Revenues Beat, Domestic SSS Up 8.6%; Offers FY19 Revenue Guidance

ONE Group Hospitality (NASDAQ: STKS) reported Q1 EPS of $0.03, $0.01 worse than the analyst estimate of $0.04. Revenue for the quarter came in at $22.8 million versus the consensus estimate of $21.75 million.

• Total GAAP revenues increased 16.7% to $22.8 million from $19.5 million;
• Domestic same store sales* for STK restaurants rose 8.6%;
• GAAP income from operations was $1.1 million compared to $0.5 million;
• GAAP net income attributable to The ONE Group was $0.9 million or $0.03 net income per share compared to GAAP net income of $0.2 million or $0.01 net income per share;
• Adjusted EBITDA** increased 50% to $2.7 million from $1.8 million; and,
• Total restaurant expenses decreased 210 basis points to 86.9% from 89.0% as a percentage of revenues; and
• Opened one domestic Company-owned restaurant and one international-licensed STK.

Emanuel “Manny” Hilario, President and CEO of The ONE Group stated, "We delivered another strong quarter as we continue to execute and demonstrate progress against our four-point strategy. Despite a formidable year-ago comparison in same store sales growth, we still outperformed our peers while distinguishing the STK brand through our execution and emphasis on imbuing VIBE dining into the entire restaurant experience. We also drove higher restaurant profitability through lower cost of sales and operating expenses as a percentage of owned restaurant sales and reduced G&A both in dollars and as a percentage of revenues. The entire STK team is making a stellar effort contributing to our ongoing success.”

Mr. Hilario continued, “We are reiterating our financial targets for 2019. Our focus remains on sales-driving initiatives such as our elevated food program, national happy hour program, event business, and social-media driven marketing, while controlling restaurant level operating and corporate expenses.”

Mr. Hilario concluded, “We opened an international-licensed STK in Doha and a Company-owned STK in Nashville during the first quarter, which are both off to strong starts, and have plans to open two to four additional STK restaurants and one to two Food and Beverage venues in the back half of 2019. Our limited capital expenditures of approximately $3.5 million reflects our prioritization of capital-light development and should enable us to generate strong free cash flow.”

GUIDANCE:

ONE Group Hospitality sees FY2019 revenue of $93-95 million, versus the consensus of $94.42 million.

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

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