Traffic up 1.8%, One Group bets on $400-a-foot Benihana Express

Traffic rose 1.8% across The One Group's seven restaurant brands in the quarter ended Sept. 27 — the company's second consecutive quarter of positive traffic — even as same-store sales slipped 0.4%.

The Denver-based parent of STK and Benihana credited a barbell pricing strategy: value offers at one end, premium occasion-driven pricing at the other. Two items are doing the heavy lifting on the value side — STK's $3-$6-$9 daily happy hour and Benihana's $15.95 lunch special. Both drew guests while consumers kept watch on spending.

Benihana carried the quarter. Same-store sales there increased 0.7% and traffic climbed 2.7%. At STK, same-store sales declined 0.9%. CEO Manny Hilario said same-store sales would have been flat without September storms along the East Coast, which dampened business.

"You're still seeing that in the business model," Hilario said of the special-occasion traffic that anchors the upscale portfolio. "But no doubt that the value price point and playing with value is really critical in keeping your traffic and your market share on."

What does the quarter mean for guidance?

The company narrowed its full-year same-store sales projection to positive 1%, down from a prior range of 1% to 2%. It also trimmed revenue expectations to $800 million to $810 million, from $805 million to $820 million.

Third-quarter revenue fell 1.8% year over year, to $177 million, as the company closed restaurants permanently or for conversion to other brands:

• Four Kona Grill and three Ra Sushi locations are closed and awaiting conversion to Benihanas.
• Two Kona Grills and one Ra Sushi closed in the quarter as their leases expired.

Rebranding is already paying off. This year the company reopened a former Kona Grill as a Benihana in Riverton, Utah, and converted another Kona Grill into an STK paired with a smaller-footprint Kona in Baltimore. Hilario said sales have improved significantly since the conversions, including a doubling of sales at the Baltimore outlet.

Can a smaller Benihana scale by franchise?

The growth engine the company is betting on is Benihana Express, a small-footprint version of the teppanyaki concept designed to accelerate franchising. The format runs 800 to 1,000 square feet and carries much of the regular Benihana menu — minus the signature teppanyaki tables and the bar.

The unit economics are specific:

• Development cost: about $400 to $500 per square foot.
• Combined food and labor costs: a projected 45% to 50% of sales.

Two company-operated Express prototypes are open, in Miami and Denver. The Miami location is pacing at roughly $1.8 million in annual sales. Two more units are slated for 2026: one in Islamorada, Florida, and one in Topanga Mall in Canoga Park, California. Demand is strong enough that The One Group is redirecting all of its other licensing efforts toward selling Benihana Express.

How are margins holding up?

Cost of goods held steady at 19.5% of sales — an all-time low for the company — despite widespread beef inflation. Hilario attributed the figure to the group's beef sourcing strategy, menu optimization and other supply chain initiatives. Restaurant operating profit rose 190 basis points, to 13.2%.

Investors barely moved on the news: The One Group stock rose less than 1% Thursday morning, to $1.18 per share.

With conversions in the pipeline and Benihana Express positioned as the franchising vehicle, the company enters 2026 with a sharpened focus on small-box growth and value-anchored traffic.