Why The ONE Group (STKS) Shares Are Sliding Today
What Happened:
Shares of upscale restaurant company The One Group Hospitality (NASDAQ:STKS) fell 13% in the pre-market session after the company reported third quarter results, which missed analysts' revenue, adjusted EBITDA, and EPS expectations. These shortcomings were driven by declines in its same-store sales (Wall Street was assuming flat same-store sales). On top of that, The ONE Group downgraded Its full-year revenue and adjusted EBITDA guidance, which were below estimates. Management cited a softening sales environment and margin pressure due to investments in labour for new restaurant openings. However, it expects the margin pressure to improve in the coming quarter. Overall, this was a bad quarter for The ONE Group.
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What is the market telling us:
The ONE Group's shares are quite volatile and over the last year have had 15 moves greater than 5%. But moves this big are very rare even for The ONE Group and that is indicating to us that this news had a significant impact on the market's perception of the business.
The ONE Group is down 34% since the beginning of the year, and at $4.17 per share it is trading 54.1% below its 52-week high of $9.08 from February 2023. Investors who bought $1,000 worth of The ONE Group's shares 5 years ago would now be looking at an investment worth $1,395.
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