What Happened?
Shares of upscale restaurant company The One Group Hospitality (NASDAQ:STKS) fell 10.1% in the afternoon session after the company reported mixed fourth quarter results: its EPS and full-year EBITDA guidance fell short.
On the other hand, The ONE Group beat analysts' revenue and EBITDA expectations, and its full-year revenue guidance outperformed Wall Street's estimates. The key highlight for the quarter was the sharp sales growth, which surged 147% year on year, largely due to the Benihana and RA Sushi acquisitions.
Despite this, comparable sales for existing restaurants declined by 4.3%.
Overall, while the quarter showcased strong top line expansion, underlying challenges in organic growth and rising costs presented hurdles that the company must navigate.
The shares closed the day at $2.53, down 12.8% from previous close.
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What The Market Is Telling Us
The ONE Group’s shares are extremely volatile and have had 45 moves greater than 5% over the last year. But moves this big are rare even for The ONE Group and indicate this news significantly impacted the market’s perception of the business.
The ONE Group is down 6% since the beginning of the year, and at $2.66 per share, it is trading 54.9% below its 52-week high of $5.90 from May 2024. Investors who bought $1,000 worth of The ONE Group’s shares 5 years ago would now be looking at an investment worth $1,285.
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