ONE Group (STKS) Unveils New Restaurant in North Carolina
The ONE Group Hospitality, Inc. STKS recently announced the opening of its STK Steakhouse in Charlotte, NC. This marks the company’s first restaurant in the state. The move aligns with the company’s strategic expansion initiative and long-term nationwide growth strategy.
The newly-opened restaurant features the company’s signature Vibe Dining experience and elevated culinary curations. It also offers take-out & delivery options during operational hours. The management is optimistic concerning the opening.
Emphasis on Unit Expansion
ONE Group focuses on expansion efforts to drive growth. During the first quarter of 2023, the company opened a Kona Grill in Columbus, OH, two venues through a licensing agreement with Reef Kitchens and a rooftop at an STK in Scottsdale, AZ. In July 2023, it opened a Kona Grill in Riverton, UT.
The company reported better than expected performance from the new store openings. During the second quarter of 2023, sales at STKs averaged approximately $250,000 per week. The figure surpassed the company’s new store sales target of $154,000.
Backed by solid customer feedback, the company is optimistic and anticipates solidifying its development momentum in the upcoming periods. The company expects to open 1 to 2 additional corners in Phoenix, AZ and Tigard, OR. It also stated plans to open company-owned STKs in Washington, D.C., South Lake City, UT and Boston, MA. It expects to open a new venue every 4 to 6 weeks for the foreseeable future.
Price Performance
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Shares of ONE Group have declined 26.9% so far this year compared with the industry’s 3.8% fall. Wage inflation, increased marketing expenses and general operating expense inflation mainly caused the downside. Also, macro pressures on sales and a rise in strategic investments concerning staffing (ahead of growth) added to the negatives. During the second quarter of 2023, owned restaurant operating expenses (as a percentage of owned restaurant net revenue) increased 340 basis points year over year to 61%. General and administrative costs increased 10.7% year over year to $8 million. The company stated concerns about a challenging inflationary environment in 2023. Meanwhile, earnings estimates for fiscal 2023 have declined in the past 30 days, depicting analysts’ concern regarding the stock’s growth potential.
Zacks Rank & Key Restaurant Picks
ONE Group currently has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Zacks Retail-Wholesale sector include:
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The Zacks Consensus Estimate for TAST’s 2024 sales and EPS indicates a 2.9% and a 4.1% growth, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. ARCO currently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 35%, on average. The stock has gained 33.2% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests rises of 19.2% and 13%, respectively, from the year-ago period’s levels.
BJ's Restaurants, Inc. BJRI carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 121.2%, on average. Shares of BJRI have dropped 18.9% in the past year.
The Zacks Consensus Estimate for BJRI’s 2023 sales and EPS indicates a 5.2% and a 423.5% growth, respectively, from the year-ago period’s levels.
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The ONE Group Hospitality, Inc. (STKS) : Free Stock Analysis Report
