STKS — The ONE Group Hospitality, Inc.

Summary of The 1 Group (STKS) Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Total Revenue: Approximately $201 million, down 3.3% from $207 million in Q2 2025.
• Comparable Sales: Increased by 0.9%, with U.S. STK restaurants growing 3.2% and Benihana restaurants growing 0.8%.
• Restaurant Operating Profit Margin: Improved by 110 basis points to 16.4%.
• Adjusted EBITDA: $21.1 million, a decrease of 9.7% from $23.4 million in the prior year.
• Net Loss: $2.1 million, improved from a net loss of $10.1 million in Q2 2025.
• Operating Cash Flow: Reached $33 million in the first half of 2026, nearly tripling from $11 million a year ago.
• Cash Position: Ended the quarter with $17.1 million in cash and short-term receivables.

2. Strategic Updates and Business Highlights

• Market Share Growth: Positive transaction growth across all segments, with operational excellence emphasized through the Vibe Dining™ concept.
• Cost Management: Continued improvement in cost of sales, now at 19.5%, down from 21.2% a year ago, attributed to sourcing adjustments and operational efficiencies.
• Expansion Plans: Opened two new company-owned restaurants and converted existing locations to higher-performing concepts. Plans to open 6 to 10 new venues in 2026, focusing on capital-efficient growth.
• Benihana Express: Strong interest in the new franchise model, which is expected to drive significant growth due to favorable economics and a smaller footprint.

3. Forward Guidance and Outlook

• Q3 2026 Revenue Guidance: Projected between $176 million and $180 million, with comparable sales anticipated to grow by 0% to 2%.
• Full-Year 2026 Revenue Guidance: Expected to be between $805 million and $820 million, with comparable sales growth of 1% to 2%.
• Adjusted EBITDA Guidance: Between $95 million and $105 million for the full year.
• Capital Expenditures: Reduced from $40 million to $30 million, reflecting a shift towards asset-light strategies.

4. Bad News, Challenges, or Points of Concern

• Revenue Decline: The 3.3% decrease in total revenue was primarily due to the closure of certain RA concept restaurants and delays in the STK Downtown New York relocation.
• Increased Operating Expenses: Higher marketing expenses during the World Cup impacted profitability, leading to a higher than expected operating expense ratio.
• Weather Impact: Elevated temperatures in certain markets affected customer traffic, particularly at Benihana.
• Economic Environment: General consumer spending remains cautious, with potential impacts from inflation and gas prices influencing dining habits.

5. Notable Q&A Insights

• Impact of New York Relocation: The delayed opening of the STK Downtown New York location resulted in a loss of expected revenues, estimated between $150,000 and $200,000 per week.
• Marketing Spend: Increased marketing expenses were necessary to drive traffic during the World Cup, which was more successful than anticipated.
• Franchise Interest in Benihana Express: There is growing interest from franchisees in the Benihana Express model, which is expected to be a significant growth area due to its favorable economics and proven revenue potential.
• Regional Performance: Traffic was generally consistent, with weather and TV scheduling (World Cup) being the primary drivers of regional differences in performance.

This summary encapsulates the key points from the earnings call, highlighting both the positive developments and the challenges faced by The 1 Group in Q2 2026.