Executive Summary

Q4 2021 delivered record revenue of $84.1M (+86.8% YoY) with consolidated restaurant margins expanding to 20.4% as strong holiday demand, menu innovation, and disciplined cost management offset commodity inflation .
Comparable sales vs 2019 rose 49.8% overall, led by STK at +60.0% and Kona Grill at +38.2%; average weekly volumes reached $338K for STK and $108K for Kona Grill in the quarter, underscoring robust consumer appetite for “vibe dining” .
Q4 EPS was $0.17; adjusted EPS $0.24; adjusted EBITDA was $13.3M. Management also raised Q1 2022 revenue targets and reiterated G&A, signaling continued momentum into early 2022 .
Asset-light revenue lines re-accelerated (management/license/incentive fees $4.6M, +262% YoY), supported by reopened international units and new managed/licensed venues; pipeline remains the most robust in company history .

What Went Well and What Went Wrong

What Went Well

Record quarterly and annual revenue driven by strong holiday demand and effective sales initiatives; consolidated restaurant margins reached 20.4% in Q4 (+440 bps YoY) .
“Vibe dining” resonated: two-year comparable sales +49.8% in Q4, with STK +60.0% and Kona Grill +38.2%; AW volumes hit $338K (STK) and $108K (Kona) in Q4 .
Asset-light revenue growth: management/license/incentive fees were $4.6M in Q4, reflecting recovery and new locations, with CEO emphasizing “the power” of growth in managed/licensed properties .
- Quote: “We believe our units deliver best-in-class returns…we foresee a total addressable market of at least 400 restaurants” .
- Quote: “Our promotions for Thanksgiving, Christmas and New Year's Eve drove record demand for both brands” .

What Went Wrong

Cost of sales increased 150 bps YoY to 25.9% on commodity inflation; COVID-related direct costs rose to ~$2.0M in Q4 (vs $1.7M prior year), pressuring reported margins .
G&A increased to $8.3M in Q4 ($7.5M adjusted), reflecting normalized support activities and higher performance-based compensation; adjusted G&A was 8.9% of revenue .
Management maintained short-term outlook given macro uncertainty (inflation, labor, volatility), offering only Q1 guidance despite strong momentum .

Financial Results

Income Statement and Margin Summary

Metric	Q2 2021	Q3 2021	Q4 2021
Revenue ($USD Millions)	$70.8	$71.9	$84.1
GAAP Diluted EPS ($USD)	$0.41	$0.34	$0.17
Adjusted EPS ($USD)	$0.19	$0.11	$0.24
Adjusted EBITDA ($USD Millions)	$12.9	$10.0	$13.3
Restaurant Operating Profit Margin (%)	22.6%	17.1%	20.4%
Owned Cost of Sales (% of owned restaurant net revenue)	25.3%	26.1%	25.9%
Owned Operating Expenses (% of owned restaurant net revenue)	52.1%	56.9%	53.7%
vs Wall Street Consensus (Revenue, EPS)	n/a	n/a	Unavailable (S&P Global daily limit exceeded; see Estimates Context)

Segment, Comps, and KPIs

Metric	Q2 2021	Q3 2021	Q4 2021
Consolidated Comparable Sales vs 2019 (%)	+38.0%	+44.7%	+49.8%
STK Comparable Sales vs 2019 (%)	+54.3%	+63.8%	+60.0%
Kona Grill Comparable Sales vs 2019 (%)	+23.0%	+26.9%	+38.2%
STK Avg Weekly Sales ($000)	$288	$285	$338
Kona Avg Weekly Sales ($000)	$103	$99	$108
Mgmt/License/Incentive Fees ($USD Millions)	$2.9	$3.9	$4.6
Cash and Equivalents ($USD Millions, period-end)	$41.4 (6/30)	$19.1 (9/30)	$23.6 (12/31)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total GAAP Revenue ($USD Millions)	Q1 2022	Not disclosed numerically; management stated increase vs prior target	$69.0–$70.2	Raised
Owned Restaurant Net Revenue ($USD Millions)	Q1 2022	Not disclosed numerically	$66.0–$67.0	Raised
Mgmt/License/Incentive Fee Revenue ($USD Millions)	Q1 2022	Not disclosed numerically	$3.0–$3.2	Raised
Total G&A ($USD Millions)	Q1 2022	~$6.5 (target reiterated)	~$6.5	Maintained

Note: Company provided only Q1 guidance due to macro uncertainty; no margin, OI&E, tax, or dividend guidance was issued .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
Supply chain & commodities	Managed inflation via menu mix, dual-sourcing, contracts; cost of sales 25.3% (Q2), 26.1% (Q3); substitutions (e.g., crab) and toppers aided margin	Cost of sales 25.9%; inflation persists; flexibility, multiple vendors, wagyu and high-margin add-ons used to offset pressures	Stable/managed despite inflation
Labor & staffing	Aggressive hiring/retention; 100%+ staffing entering Q4; investments in training (Q3)	“100% staffed” through Q4; retention emphasized; perks and benefits programs; deep bench for 2022 openings	Strength improving execution
Off-premise & delivery	Additive layer; curated menus; $1–$1.5M annualized at top units (Q3); 9 delivery partners (Q2)	5–8% of sales at STK; 13–17% at Kona; aggregators drive brand discovery and in-restaurant visits	Sustained, marketing lever
Brunch	Emerging core daypart driving weekend utilization (Q2/Q3)	Continues to grow; long-term opportunity ($30M+ layer)	Expanding
Events/corporate	Rebuilding; strong holiday bookings expected (Q2/Q3)	Strong demand for smaller premium events; capacity balancing; selective private dining	Recovering, accretive
Development pipeline & asset-light	2021 openings across managed/licensed; new STKs & Kona units planned; credit amendment lowers interest	At least 9 units plan for 2022; strong pipeline; continued asset-light growth driving fees	Accelerating
Pricing strategy	Preserve entry steak value; maintain competitor price gaps; opportunistic pricing	Maintain value; take pricing where appropriate; menu flexibility	Balanced, market-follow
REEF Kitchens	Initial Texas focus; 5–7% top-line royalty; test market expansion	Licensed sites; auxiliary upside; next location Austin; no capital requirements	Test phase, optionality
Macro outlook	Strong TSR; focus on execution; limited guidance amid uncertainty (Q3)	Near-term guidance only; cautious on volatility, inflation, Omicron; momentum intact	Cautious near-term framing

Management Commentary

“We reported another quarter of record setting revenue, with over $84 million in total GAAP revenue…consolidated restaurant margins of 20.4%, an increase of 440 basis points from 2020…comparable sales increased almost 50% when compared to 2019” — Emanuel “Manny” Hilario, President & CEO .
“Our promotions for Thanksgiving, Christmas and New Year’s Eve drove record demand for both brands…average weekly volumes during the quarter to $338,000 and $108,000 for STK and Kona Grill respectively” .
“Looking to 2022, our development pipeline is the most robust we’ve had…we plan to open at least 9 new units” .
“We were 100% staffed throughout the quarter…retained every single general manager in the company” .

Q&A Highlights

Momentum and Q1 guide raise: Post-Omicron recovery aided by brunch and happy hour; “we clearly see positivity right now,” but management provides only one-quarter guidance due to macro uncertainty .
Inflation/pricing: Persistent commodity pressure mitigated via menu flexibility, multiple suppliers, substitutions, protecting entry steak value, and maintaining competitive price gaps .
Labor pipeline: Deep bench-building at assistant and entry manager levels; growth pace will flex with macro, prioritizing brand execution over expansion speed .
Asset-light fees: Management/license/incentive fee line recovering; strong pipeline expected to continue growing this revenue stream .
REEF Kitchens economics: Licensed sites, 5–7% top-line royalty; auxiliary growth to test markets without street stores, minimal capital .

Estimates Context

Attempted to retrieve Wall Street consensus (S&P Global Capital IQ) for Q4 2021 EPS and revenue; data was unavailable due to daily request limits at time of retrieval. As a result, “vs estimates” comparison is not provided for this quarter [GetEstimates error].
Implication: Sell-side models may need upward revisions to revenue and EBITDA trajectory given Q4 outperformance and Q1 guidance raise, particularly for asset-light fee ramp and sustained AW volumes .

Key Takeaways for Investors

Demand strength is durable: Two-year comps and AW volumes surged across both brands; sales-driving levers (brunch, happy hour, events, off-premise) continue to add layers, supporting top-line resilience .
Margin discipline amid inflation: Despite cost pressures, restaurant margins expanded; menu flexibility, mix management, and pricing discipline underpin profitability, with adjusted EBITDA stepping up in Q4 .
Asset-light growth is a key earnings driver: Managed/licensed fees accelerated; robust 2022 openings and REEF tests offer incremental, capital-light revenue streams .
Near-term guide positive: Q1 2022 revenue targets were raised, indicating momentum; expect continued focus on execution over long-range guidance given macro volatility .
Labor capability is a competitive advantage: 100% staffing and strong retention enable throughput and experience quality during peak periods, supporting sustained volumes .
Watch catalysts: Holiday/event recovery into 2022, incremental fee revenue from new venues, additional pricing/mix actions, and potential margin tailwinds as COVID-related costs normalize .
Risk factors: Commodity/labor inflation, macro volatility (gas prices, market wealth effects), and convention/large corporate events timing could impact cadence of recovery; management remains flexible on growth pacing .

Appendix: Prior Two Quarters Reference Materials

Q3 2021 8-K press release (record quarterly revenues; comps vs 2019; brand-level metrics; balance sheet and non-GAAP reconciliations) .
Q3 2021 call (AW volumes, off-premise economics, labor investments, inflation management, events demand, development pipeline) .
Q2 2021 call (record restaurant margin 22.6%, adjusted EBITDA $12.9M; comps vs 2019; delivery/brunch initiatives; development updates) .

Citations:

Q4 2021 preliminary sales 8-K press release and Exhibit 99.1 .
Q4 2021 earnings call transcript (financials, guidance, strategy, Q&A) .
Q3 2021 press release & call .
Q2 2021 call .

Estimates note: Wall Street consensus via S&P Global was unavailable at retrieval time (tool limit).

ONE Group Hospitality, Inc. (STKS)·Q4 2021 Earnings Summary