The ONE Group Hospitality Reports 102.3% Revenue Growth to $673.3 Million Amid Acquisition Challenges

The ONE Group Hospitality, Inc. reported significant financial growth for the fiscal year ending December 31, 2024, with total revenue reaching $673.3 million, a 102.3% increase from $332.8 million in 2023. This surge in revenue was primarily driven by the acquisition of Safflower Holdings Corp., which owns most of the Benihana and RA Sushi restaurants in the U.S., contributing approximately $339.7 million to the revenue increase. Despite this growth, the company experienced a net loss of $15.8 million, compared to a net income of $4.7 million in the previous year, largely due to transaction and integration costs associated with the acquisition.

In terms of operational metrics, the company opened six new venues in 2024, including STK restaurants in Washington, D.C., and Aventura, Florida, and plans to add five to seven new locations in 2025. The total number of venues operated by the company now stands at 166, comprising 30 STKs, 84 Benihanas, 27 Kona Grills, and 16 RA Sushis. However, same-store sales across various brands showed a decline, with a combined decrease of 6.8% for the year, indicating challenges in maintaining customer traffic and sales at existing locations.

The acquisition of Safflower Holdings Corp. on May 1, 2024, marked a pivotal strategic development for The ONE Group, allowing it to expand its footprint in the upscale dining sector. The company financed the acquisition through a $350 million term loan and the issuance of $160 million in Series A Preferred Stock, which carries a compounding dividend starting at 13%. This financing arrangement has increased the company's interest expenses significantly, which totaled $31.1 million for 2024, compared to $7.0 million in 2023.

As of December 31, 2024, The ONE Group employed approximately 10,800 individuals, including 594 full-time salaried employees at its venues. The company aims to leverage its expanded operations to improve efficiency and reduce general and administrative expenses as a percentage of revenue. Looking ahead, The ONE Group is focused on enhancing same-store sales and operational efficiency while continuing to explore acquisition opportunities to drive growth in the competitive restaurant industry.

Overall, while The ONE Group Hospitality, Inc. has made substantial strides in expanding its market presence and revenue, it faces ongoing challenges related to same-store sales performance and increased operational costs, particularly in light of its recent acquisition and the associated financial implications.