ONE Group Hospitality (STKS) Reports Q4 Revenues Miss

ONE Group Hospitality (NASDAQ: STKS) reported Q4 revenue for the quarter came in at $45 million versus the consensus estimate of $50.55 million.

Sales highlights for the fourth quarter ended December 31, 2020 compared to the same period last year are as follows.

• Total revenues decreased 13.8% to $45.0 million from $52.2 million.
• Consolidated comparable sales* decreased 14.8%:
  • Comparable sales increased 4.2% in October, decreased 18.4% in November, and decreased 26.4% in December;
• Comparable sales* for STK decreased 20.7%:
  • Comparable sales increased 0.3% in October, decreased 20.8% in November, and decreased 36.0% in December;
• Comparable sales* for Kona Grill decreased 8.0%:
  • Comparable sales increased 8.6% in October, decreased 15.8% in November, and decreased 14.4% in December;

Consolidated two-year comparable sales* from January 1, 2021 through March 14, 2021 increased 0.5%. For Kona Grill, the two-year comparable sales* from January 1, 2021 through March 14, 2021 increased 4.3% and for STK, the two-year comparable sales* from January 1, 2021 through March 14, 2021 decreased 3.0%. For STK, excluding Las Vegas where capacity averaged less than 30% from January 1, 2021 through March 14, 2021, the two-year comparable sales* from January 1, 2021 through March 14, 2021 increased 10.8%.

COVID-19 Update

Starting in May 2020, state and local governments began easing restrictions on stay-at-home orders; however, certain states re-imposed restrictions as COVID-19 cases increased during the fall of 2020. The Company has taken significant steps to adapt its business to recover sales while providing a safe environment for guests and employees, which resulted in a significant increase in revenues in the third and fourth quarter of 2020 compared to the second quarter of 2020. As the Company navigates through the pandemic, it has also implemented measures to reduce its costs, including deferring capital projects and negotiating payment deferrals and abatements with suppliers and landlords.

2020 In-Person Dining Capacity

• October: 51% (Consolidated Comparable Sales +4.2%)
• November: 44% (Consolidated Comparable Sales -18.4%)
• December: 38% (Consolidated Comparable Sales -26.4%)

2021 In-Person Dining Capacity

• January: 41% (Consolidated Comparable Sales -13.3%)
• February: 46% (Consolidated Comparable Sales -1.1%)
• March (through 3/14/2021): 55% (Consolidated Comparable Sales +24.0%)

Takeout and delivery were approximately 15% of sales in the fourth quarter of 2020 (2.7 times higher than in the first quarter of 2020) and will continue to be a meaningful layer of the business going forward.

2021-2022 Restaurant Development

The Company intends to open thirteen new venues between 2021 and 2022. There are currently four STKs and three managed F&B restaurants under construction.

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

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