The ONE Group Hospitality, Inc. announced its financial results for the third quarter ended September 30.
Highlights were as follows:
The third quarter marked their 10th consecutive quarter of double-digit revenue growth.
Owned unit net revenues increased 22.6 percent to $16.3 million.
Management and incentive fee revenue increased 6.3 percent to $2.1 million.
Total food and beverage sales at owned and managed units increased 9 percent to $39.6 million.
Jonathan Segal, CEO of The ONE Group says, “As a result of the near-term challenging restaurant landscape and tourism decline in our core markets as well as the unstable political climate, our third quarter results fell short of our expectations. Despite this challenging environment, we believe that the demand for our brand remains strong. Over the long-term, our growth strategy continues to focus on management and license deals, which require a lower capital investment, while producing high margin EBITDA royalty stream.”
Segal continues, “During the third quarter we opened two managed STK restaurants, including our second STK in Miami with our partner, the ME Hotel Group and our first STK in Toronto, Canada. We also opened a rooftop restaurant at the Andaz Hotel in San Diego. Additionally, we opened our first licensed STK in the holiday island of Ibiza. Looking towards the next three to six months, we expect to open company-owned STK Restaurants in Denver and San Diego.”
Third Quarter 2016 Financial Results
Total owned unit net revenues increased 22.6 percent to $16.3 million in the third quarter of 2016 compared to $13.3 million in the third quarter of 2015. The increase was primarily due to the opening of STKs in Orlando and Chicago.
Comparable sales from owned STK units decreased 9.2 percent for the quarter. Comparable sales from owned and managed STK units decreased 4.2 percent for the quarter. The decrease in same store sales was driven by a decline in the private events business coupled with a decline in tourism in core markets.
Management and incentive fee revenues increased 6.3 percent to $2.1 million in the third quarter of 2016 compared to $1.9 million in the third quarter of 2015. The increase was driven by an increase in management and incentive fees at STK in Las Vegas as well as the opening of STK Ibiza and STK Miami at the ME Hotel and was partially offset by a decline in revenue and in the currency exchange rates versus the same period a year ago from U.K .operations.
Total food and beverage sales at owned and managed units increased 9 percent to $39.6 million compared to $36.3 million in the third quarter of 2015.
Net income attributable to The ONE Group Hospitality, Inc. was $1.5 million compared to a net loss of $2 million in the third quarter of 2015.