The ONE Group Hospitality, Inc. (STKS) Earnings Call Transcript & Summary

Greetings, and welcome to the ONE Group Fourth Quarter and Full Year 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this event is being recorded. I would now like to turn the conference over to Tyler Loy. Please go ahead.

Thank you, operator, and hello, everyone. Before we begin our formal remarks, let me remind you that part of our discussion today will include forward-looking statements. These forward-looking statements are not guarantees of future performance, and you should not place undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Please also note that these forward-looking statements reflect our opinion only as of the date of this call. We undertake no obligation to revise or publicly release any revisions of these forward-looking statements considering new information or future events. We refer you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. During today's call, we will discuss certain non-GAAP financial measures, which we believe can be useful in evaluating our performance. However, the presentation of these measures or other information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. For reconciliations of these measures, such as adjusted EBITDA, adjusted net income, restaurant operating profit, comparable sales and total food and beverage sales at company-owned, managed license and franchise units to GAAP measures, along with a discussion of why we consider these measures useful, please see our earnings release issued today. With that, I would like to turn the call over to Manny Hilario.

Thank you, Tyler, and hello, everyone. Thank you all for joining us today and for your continued interest in the ONE Group. I would like to begin this call by recognizing our amazing team members. Their unwavering commitment to our mission, creating great guest experiences by operating the best restaurant in every market we're in by delivering exceptional and unforgettable guest experiences to every guest every time. What gives me confidence that we can realize our vision of becoming the global leader in Vibe Dining. 2024 marked a transformative year for us with the strategic acquisition of Benihana and RA Sushi last spring. This milestone event expanded our portfolio of vibe-dining venues and enabled us to achieve scale that would have taken us years to build organically. The acquisition also drove significant operational efficiencies, yielding significant run rate synergies during 2024. These savings came from streamlining restaurant operations and support functions eliminating redundant costs and leveraging our enhanced scale to secure more favorable supplier contracts. Looking ahead, we are targeting a total of $20 million in total cost savings by year-end 2026. Our annual financial performance certainly reflected the transformational change at our company. Full year revenue increased over 100% to $672 million and adjusted EBITDA increased almost 130% to $75.2 million. Both metrics obviously represent significant growth from the prior year but also came in at the higher end of our 2024 guidance ranges. First, we increased revenues by almost 150% to a record $222 million. We had our best consolidated comparable sales of the year, including positive transactions at STK and improved sales performance at Benihana due to our initiatives. The momentum seen in the fourth quarter has secured into the first quarter and we anticipate another quarter of sequential improvement in comparable sales. In addition, we increased our adjusted EBITDA by almost 150% to $30.3 million, led by strong restaurant level margins of 16.4%. Next, we opened three restaurants, including two company-owned units and one managed location ended the year with six new restaurants. And finally, we had over $71 million in liquid resources at year-end between cash on hand, shortened credit card receivables and revolver availability, which is currently undrawn. Looking ahead, let us review our priorities. First, driving sales across our brands by executing our strategic pillars. As I referenced earlier, we are determined to create great memories for our guests by operating the best restaurants across all our markets and delivering exceptional and unforgettable experiences to every guest every time. We do this through our focus on three strategic pillars: operations, culinary and marketing. While traffic generation across the industry remains challenging, we were encouraged by the positive transactions at STK during the fourth quarter. Our focus is on maintaining guest frequency and brand engagement during this period. And when the economic conditions improve, we expect these guests to return to traditional dining patterns. Our menu strategy balances accessibility with innovation. We offer complete dinner and beverage packages at $69 for STK and $39 for all other brands and maintain strategic entry price points. For instance, like $50 premium stakes at STK and $39 Bistro options at Benihana. We also refreshed our offerings 4 to 5x annually with new seasonal items. The stool strategy of approachable pricing and regular menu innovation helps maintain guest engagement and loyalty, which is particularly important in today's promotion-driven environment. On culinary innovation, we launched a successful [indiscernible] program at Benihana as a premium offering with significant potential for further menu innovation ahead. We also launched a new drink menu with three new margaritas. Moving on to marketing. We are prioritizing local store outreach within a 4-block radius of each restaurant, building strong relationships with local businesses, concierge and hotels to drive traffic across our portfolio of brands. Evolving our digital tool engagement and assets is critical across all our brands. We maintain active communication with our guests across digital platforms, consistently sharing fresh, compelling content that showcases our innovation and keeps guests connected to our brands to their mobile devices. At Benihana, we have updated our digital channels to showcase the brand as more than just a special location destination, highlighting our quality ingredients in everyday dining appeal. Obviously, Benihana does well with celebrations birthdays and anniversaries, but one of our biggest learnings so far is that promotions and product innovation also bring people into our restaurants. And so there is tremendous opportunity to build frequency beyond milestone events and turn people into regular Monday to Thursday customers of the brand. On a related note, this year, we plan to launch a new customer loyalty program across all our brands with a special emphasis on celebrating veritas and rewarding our guests milestone moments with personalized offerings. This is another strategy in how we show appreciation to our guests, and reference a key step forward in our retention efforts, because our underlying goal is to convert those who dine with us once or twice annually into more frequent visitors. Our second key priority is the successful integration of Benihana delivering on our cost initiatives. Our post-acquisition integration efforts have delivered strong results this year. We have achieved significant synergies through streamlined operations at both the restaurant and support center levels. These savings came from consolidated contracts and eliminating redundant [ costs ]. Key areas of optimization include workforce efficiency, professional services consolidation, unified insurance coverage, centralized purchasing and streamlined supply and management. We expect to fully realize these benefits over the next 12 months. Looking ahead, we have identified additional opportunities for operational efficiency and expect to achieve annual synergies of at least $20 million from the acquisition. Our company's largest scale and strength of supply chain team have helped us negotiate better prices from our suppliers across all our brands. We take pride in constantly pushing ourselves to maintain the most competitive cost structure in the industry. This focus on cost efficiency, combined with our commitment to delivering great customer experience means that as we gain more traffic, we will be able to increase our profit margins. Notably, we're not overly dependent on any single product across any of our brands, and therefore, are able to manage our product mix to keep the cost structure in line and manage through these fluctuations. And finally, as part of our integration process, we have applied our core strengths to enhance both Benihana and RA Sushi. By sharing our expertise in operations, marketing and culinary innovation we are boosting sales and performance at both restaurant brands. This includes improvements in supply chain management, reservation systems, digital marketing strategies and menu development. We have also streamlined our back office operations by implementing unified systems for HR, payroll, financial reporting and employee training across all of our restaurants. Third, we are focused on our next phase of growth, balancing company-owned development and asset-light growth. We ended 2024 with six new restaurants opening three units in the last 70 days of the year. In October, we opened an STK in Aventura, Florida; our third STK in the state of Florida. In November, we opened our new concept, South water Social within the Cherry Creek neighborhood of Denver, Colorado. And in November, we opened a managed STK in the Embassy Suites Niagara Falls hotel on the Canadian side of the falls. Throughout 2025, we plan to open 5 to 7 company-owned restaurants and will balance with asset-light growth of managed and licensed STK and Kona Grill and franchise Benihanas. In March, we will open a company owned Benihana in San Mateo, California at the Bridgepoint Shopping Center, one of the premier power centers in the Bay Area. Next, we'll open a company-owned STK in Los Angeles, California and Westwood Village. This is a relocation of the existing STK in the W Hotel. We also plan to open a company-owned STK restaurant in the Westfield Topanga Shopping Center, located in the heart of California, San Fernando Valley. The New [ Tapagna ] location will extend our presence in the greater Los Angeles area. Also under construction is a Kona Grill on Lake Union in Seattle, Washington. We are still in the early stages of our growth story with significant expansion potential across our portfolio. Looking ahead, we envision Benihana growing to 400 locations, while STK has a clear path to 200 restaurants and provide us with an exceptional return on investment, making it one of the most profitable expansion models in the restaurant industry and naturally positions STK as our priority for developments. We're also accelerating our franchising strategy for Benihana. We have discovered strong interest from franchisees looking to diversify their portfolios with an established upscale casual dining brand, in response we have enhanced our franchise infrastructure and we are currently negotiating numerous development agreements. This franchising initiatives will be instrumental in driving Benihana's expansion. Turning to our growth concepts. We'll be highly selective on growth opportunities for Kona Grill and RA Sushi depending on the circumstances. The demand for our concepts in nontraditional venues continues to grow. We are seeing significant opportunities in airports with both STK and Benihana Express. Hotels are actively seeking to refresh their food and beverage programs post-COVID, while casinos represent another exciting channel building on our existing successful locations. We are also exploring retail opportunities for Benihana. Lastly, our fourth key priority is balance sheet flexibility and returning value to our shareholders through share repurchases. We finished the quarter with over $71 million in liquid resources went binding our cash on hand, short-term credit card receivables and the availability under the revolving credit facility, which remains undrawn. Under the current conditions, our total loan is not subject to a financial covenant. During 2024, we returned approximately $3.2 million to shareholders through share repurchases, and we will continue to evaluate opportunistic share repurchases under our board authorized program. We are laser focused on our balance sheet and our prioritizing cash flow generation, balance sheet flexibility and maximizing shareholder returns. As you can tell, we have been busy building our path to $5 billion in systemize sales. Our operator generation compliant with our disciplined pipeline of new locations, proven unit economics and our asset-light strategies provide us with multiple avenues for growth. We're excited for the future and will remain focused on executing our strategy and creating long-term shareholder value. I will now turn the call over to Tyler.

Thank you, Manny. Let me start by discussing our fourth quarter financials in greater detail before providing our outlook for the first quarter and current year. Please note that the fourth quarter of 2024 has 3 months of contributions from Benihana and RA Sushi, whereas the prior year quarter excludes any contribution from the acquisition of Benihana, which closed on May 1, 2024. Total consolidated GAAP revenues were $221.9 million increasing 147% from $89.9 million for the same quarter last year. Included in total revenues were our company-owned restaurants net revenue of $217.8 million, which increased 155.7% from $85.2 million for the prior year quarter. The increase was due primarily to $130.4 million in contributions from Benihana and RA Sushi. And to a lesser extent, contributions from the opening of 6 SDKs, 2 Kon Grill and the Saltwater Social restaurant since the onset of the fourth quarter of 2023. These were partially offset by a 4.3% reduction in consolidated comparable sales. Management license and incentive fee revenues decreased 14.5% to $4.1 million from $4.8 million for the prior year quarter. Benihana franchise restaurants contributed $0.5 million in revenues during the fourth quarter of 2024, but was offset by decreased revenues that managed STK restaurants in North America and the prior termination of an F&B hospitality agreement with [indiscernible]. Company-owned restaurant cost of sales as a percentage of company-owned restaurant net revenue decreased 250 basis points to 20.4% compared to 22.8% in the prior year quarter. This was primarily due to the addition and strong performance of Benihana and RA Sushi as they contributed positively to cost of sales as a percentage of company-owned restaurant revenue. Company-owned restaurant operating expenses as a percentage of company owned restaurant net revenue increased 340 basis points to 61.2% from 57.8% in the prior year quarter. This was due to cost inflation and fixed operating costs, partially offset by operational cost reduction initiative and pricing at STK and [indiscernible]. Notably, the addition of Benihana and RA Sushi contributed positively to operating expenses as a percentage of company-owned restaurant net revenue. Restaurant operating profit decreased 90 basis points to 18.4% compared to 19.3% in the prior year quarter. This included restaurant operating profit of 22.6% for Benihana brand locations, which improved approximately 300 basis points versus the prior year. On a total reported basis, general and administrative costs increased $5.3 million or 66.5% to $13.2 million from $7.9 million in the prior year quarter, driven by the addition of the Benihana acquisition. When adjusting for stock-based compensation, adjusted general and administrative expenses were $11.6 million and $6.7 million in the fourth quarter of 2024 and 2023, respectively. As a percentage of revenues, adjusted general and administrative costs improved 230 basis points to 5.2% compared to 7.5%. The improvement is due to the sales leverage realized Benihana acquisition and the implementation of cost savings and transaction synergies. Depreciation and amortization expense was $11.4 million compared to $4.8 million in the prior year quarter. The increase was primarily related to depreciation and amortization for the Benihana and RA Sushi restaurants. Depreciation associated with the opening of 8 new company-owned venues in October 2023 and capital expenditures to maintain and enhance the guest experience in our restaurants. Preopening expenses were $2 million compared to $2.9 million in the prior year. Nonrecurring costs of $3.7 million consisted of transition and integration cost of $3.6 million and transaction and [indiscernible] costs of $0.1 million, both related to the acquisition. Interest expense was $10.5 million compared to $1.9 million in the prior year quarter due to our higher level of outstanding debt post acquisition. Provision for income taxes was $0.3 million compared to a benefit of $1.5 million in the prior year quarter. Net loss available to common stockholders was $5.4 million or $0.18 net loss per share compared to a net income available to common stockholders of $4.6 million in the fourth quarter of 2023 or $0.15 net income per share. Adjusted net loss available to common stockholders was $0.9 million or $0.03 adjusted net loss per share compared to an adjusted net income available to common stockholders of $5.3 million or $0.17 adjusted net income per share in the prior year quarter. Adjusted EBITDA attributable to the ONE Group Hospitality, Inc. was $30.3 million compared to $12.2 million in the prior year quarter. Please note, in the third quarter of 2024, we updated our definition of adjusted EBITDA to no longer adjust for preopening expenses. Under the previous definition, adjusted EBITDA would have been $32.1 million versus $14.5 million in the fourth quarter of the prior year. We have included a reconciliation of adjusted EBITDA, adjusted net income and historical adjusted EBITDA in the table in our fourth quarter 2024 earnings release. Turning to liquidity. We finished the year with $38.1 million in cash and short-term credit card vehicles and $33.6 million under our revolving credit facility, which remains undrawn. Under the current conditions, our term loan does not have a financial covenant. Now, I would like to provide some forward-looking commentary regarding our business. This commentary is subject to risks and uncertainties associated with forward-looking statements as discussed in our SEC filings. We, as always, remind our investors the actual number and timing of new restaurant openings for any given period is subject to a number of factors outside the company's control, including macroeconomic conditions, weather and factors under control of landlords, contractors, licensees and regulatory and licensing authorities. Based on the information available now and the expectations of today, we are issuing the following financial targets for the first quarter of 2025. Beginning with top line, we project total GAAP revenue of between $205 million and $210 million, which reflects our anticipation of consolidated comparable sales of minus 4% to minus 3%. And a sequential improvement from the fourth quarter of last year. Managed franchise and license fee revenues are expected to be between $3.5 million and $4 million. Total company-owned operating expenses as a percentage of company-owned restaurant net revenue of approximately 83%, full G&A, excluding stock-based compensation of approximately $11 million. Adjusted EBITDA of between $24 million and $26 million; restaurant preopening expenses of between $1.5 million and $2 million. And finally, we plan to add 1 to 2 new venues. And based on the information available and the expectations as of today, we are issuing the following financial targets for 2025. We project total GAAP revenues of between $835 million and $870 million which reflects our anticipation of consolidated comparable sales of minus 3% to plus 1%. Managed franchise and license fee revenues are expected to be between $15 million and $16 million. Total company-owned operating expenses as a percentage of company owned restaurant net revenue of 83.5% to 82.2%, total G&A, excluding stock-based compensation of approximately $47 million adjusted EBITDA of between $95 million and $115 million, restaurant preopening expenses of between $7 million and $8 million, an effective income tax rate of approximately 7.5%. Total capital expenditures, net of allowances received from landlords of between $45 million and $50 million. And finally, we plan to add 5 to 7 new venues. Lastly, beginning this year, we will report financial information on a fiscal quarter basis using 4 13-week quarters with the addition of a 53rd week when that is necessary. For 2025, our fiscal calendar begins on January 1, 2025, and ends on December 28, 2025, and our first quarter will contain 89 days. I will now turn the call back to Manny.

Thank you, and thank you all for your time today and interest in the One Group. We remain confident in our portfolio of iconic high-volume brands and long-term vision to be the undisputed global leader in dining. We are in the early stages of an exciting phase in our company's journey, and we appreciate your continued support. Tyler and I are happy to answer any questions that you may have. Operator?

[Operator Instructions] And your first question today will come from Jim Salera with Stephens, Inc.

Manny, I wanted to drill down a little bit on maybe the shape of the year, obviously, some consumer uncertainty right now, but how can we think about the same-store sales progression? Is it fair to say that it will you expect it to kind of get gradually better each quarter as the year progresses? Or just any call-outs that work that. And then the other piece is what do you expect from traffic versus mix component as the year progresses, as we've heard industry traffic is expected to be kind of flat to down for the year?

Yes, Jim, thanks. So as you could see from our guidance for the quarter, we're looking at a minus 4% to minus 3% in same-store sales for the first quarter. And then for the full year, we're looking at a minus 3 to plus 1. So obviously, the progression has been sequentially better this quarter than it was in the fourth quarter last year. So we've seen continued improvement in the fourth quarter was already an improvement over prior quarters. So we're sequencing into much better periods. And then going on into the year, we think that we'll continue the improvement in the second, third and obviously the fourth quarter is always a great quarter for us in terms of being able to go on sale. So obviously, the environment is what the environment is. The challenges are still out there. But I think in total, we are making progress for our brands. In terms of traffic, as we mentioned earlier in the prepared comments, STK traffic was positive in the fourth quarter, and we feel really good about the traffic for that brand for the 2025. So we feel really good about the strategies and the initiatives that we've put in place there. And then for Benihana, obviously, we're now into our third quarter into working with the brands, and we have made significant amount of initiatives and improvements and changes to both marketing, menu and operations, which we think will continue to yield transactions going forward. So we also feel good about the transaction outlook for the Benihana brand. In terms of the growth, that continues to be a challenged sector in general. But I think as you saw from the numbers, is we continue to make improvements there. And we do have a very solid leadership team in place and grow right now. So I feel pretty comfortable about our ability to get to better traffic in 2025.

Great. And then maybe another question just on the kind of sequencing of the new unit openings. Is there anything we should factor in, in terms of equipment availability, I don't know if any, the tariffs impact just your ability to get equipment set up for new restaurant openings, and if that should be kind of even throughout the year, we should expect maybe more in the back half versus the front half?

Yes. I mean -- so right now from a sequencing of restaurants, we have three units that are pretty much in final stages. We have our Benihana in San Mateo, which is already in heavy preopening operations right now. So that one is very close to getting opened. And then we also have 2 STKs that will follow shortly thereafter we have one in [ Tapagna ], California, which is coming up very soon. We also have West with 2 in the very near future. So all those 3 restaurants are currently already in preopening operations. So those are very -- will be very supposed to be open here. And then we also have a franchise Benihana Express that will be opening here very shortly, and then expect the balance of the openings to be late third quarter, early fourth quarter, with probably the most likely one is the Kona Grill in Seattle. So a bunch of them opening up now, one kind of middle of the year and then the balance late third quarter, early fourth quarter. In terms of equipment availability and stuff, of course, for those that are opening now, all the equipment is already in place. I think the Kona Grill equipment is pretty much sort out. And then for the late end of the year openings. I think we also have a big part of that equipment also sorted out. So I wouldn't say we'd see any immediate impact in 2025 with anything to do with equipment.

And your next question today will come from Mark Smith with Lake Street Capital.

Similar question. Just wanted to ask, as we look at the tariff front, any impact on commodities? Anything that you guys are seeing shifting out there on the commodity front?

I mean other than the more obvious ones that everybody speaks about today like eggs and some of the stuff we see out there, we don't see any significant shifts. Obviously, beef is a big one for us and also frozen seafood, as we go through a lot of shrimp and prong, et cetera. So I think those two commodities, at least from our perspective, are pretty well soft for the remainder of the year. So we don't see any impact, particularly now in the second and third quarter. We don't see anything that would be significant or even the first quarter. But yes, the environment is a little bit more, I guess, more complex in terms of navigating it towards all the conversations about tariffs and the potential shifting and supply sources, et cetera. So it's a little bit more complex, but I think as I mentioned in my prepared statements, one of our core strength now is a really strong supply chain team as well as a very strong supply chain process. So I feel pretty good that through the acquisition and integration process of Benihana, we've really gotten our systems and our practices in place for supply chain. So obviously, there will be some things happening in the environment, but I think that we set ourselves up to be able to navigate through that environment really well with our systems.

Okay. And then you already walked through kind of opening cadence and outlook there. I'm curious, as we think about primarily Rob, maybe with Kona, are there any restaurants coming to end of lease terms, or anything that maybe we should look for on the closure front?

I mean as I said in the earlier calls, obviously, portfolio management is really important for the growth side at this point. For RA, we don't have any plans. As a matter of fact, we don't have any plant closures at this point. But obviously, we'll continue to evaluate that, but no raw locations on our plan right now to close down.

Okay. And I think the last one for me. Just trying to dig in a little bit more into kind of consumer behavior as we think about kind of traffic ticket mix, maybe talk about your ability to take price where necessary and what's maybe built into the guidance here? And then I'm also curious, is any changes in behavior maybe over the last few months, are you seeing anything significant like cutback on alcohol or drinks, dessert, anything to call out on consumer behavior would be great.

Yes. I mean, I think there were two questions in there. One of them was the pricing and how we're looking at pricing. Obviously, we do want to be cautious on pricing just because the consumer is paying close attention to the kids right now, so what the prices are on the ticket. So we have to be thoughtful and cautious about it. We do still have some opportunities. We've been very disciplined. STK we've been very thoughtful about not going too far ahead in that brand. So we do have some firepower in pricing there if we wanted to. But for all intents and purposes, we won't look into pricing if we get into a commodity or a situation here where we have to deal with inflation. So we'll be very careful with that. In terms of the consumer behaviors, I mean, I think I've reported earlier, I think that's the bigger behavior that we've seen from consumers is them opting for alternative dayparts, such as Happy hour, we also see, particularly on the steakhouse side, we see more people sharing maybe some of the sides, but we haven't really seen anything out other than to make a trends, if you will, within the portfolio.

Your next question today will come from Nick Setyan with Wedbush Securities.

Can we just talk about some of the new openings and how they're doing, if you're happy with sort of the sales trends, particularly the Kona and the RA Sushi got opened this year.

Yes. I mean I think the two openings. One was in plantation was the route opening. I think that one is tracking in the $3.5 million, $4 million revenue range, which is for [indiscernible] is pretty much on brand. And then our second opening in that category was [indiscernible], which is an Oregon fantastic shopping mall, a fantastic Apple Store. I think that's up and coming restaurant. It's done. We did really well during season during the holiday season, which is you'd expect out of that shopping center. Obviously, the first quarter was a little slower, because of the rains up in Oregon and the fact that we have a beautiful rooftop in that property. So I'm actually been pretty pleased with the progress of both [ Florida ] and plantation. So I would say that's a good check. I mean the other openings that we've done are the STKs, which continue to be above our model and continue to do extremely well. And then we also opened South water Social. My view on that restaurant that opening was to be around 85,000 to 100,000 a week, we're in the mid-hundreds, about 130, 140. So that restaurant is actually, frankly, doing extremely, extremely well. for a one-off asset. So I would say that I look at the 2024 class is a class of openings and the '25 class is also super exciting, class of units, the quality of the real estate is high in all the properties. So we're looking forward to another strong year in real estate in 2025.

And just please update us on the construction costs, and where they are across the concept, at least the ones that you're developing, like how much it costs to build in new units?

Yes. I mean I think that the gross costs on concepts right now is in the high 600s to 700 per square foot on the space. And then we're getting about $150 and in TI, so call it in the mid-500s after TI. I mean, that's just kind of what the environment has been. If I look at the true-up the last 2 years. Obviously, with labor having been an issue at some point, construction did go up and then equipment and some other stuff. So obviously, the big pressure point not to really watch out is for steel prices. some of our properties we use steel in it. So we only are managing through it. But again, I think as we've gotten bigger, our -- the quality of our development team is really high. I have a very high-quality team that spends a significant amount of time on cost engineering, just to make sure that we're getting the right specs and we're doing a good job of spending what we need to spend on these projects. So I think that, again, our team and our process is very strong in that area right now.

Okay. And then just final question for me. Just given the down 20 bps for Benihana in Q4. But your comments around continued sequential progression, is it fair to assume that Banana has turned positive in Q1, or we should think about it as positive within the overall guidance, the comp guidance?

I mean, I think, generally we didn't provide brand guidance for the quarter, but I would say that looking at the post progression holds well, right? So I mean, obviously, our overall quarter-over-quarter based on our guidance, I think the midpoint of our guidance is about minus 3.5%, which is an improvement from the fourth quarter. And Benihana was relatively flat in the fourth quarter. I think you mentioned the minus 20 bps. I think that's correct. But I feel good about it. I think the thing I feel really good about Benihana has been the initiatives that we put in place and added emphasis on happy hour, which helps the Monday, Tuesday, Wednesday business. And I think the next big initiative has been our emphasis on throughput on Fridays and Saturdays, because the restaurants do get jammed up on those days of the week. So we've been working with operations and just really making sure that we put a lot of our know-how and how we do reservations and utilizing our central logistics process to really enhanced throughput at the restaurants and table turn times. So we're emphasizing that on the weekends. And then the other thing that we're super excited about is we've been adding products innovating with [indiscernible], for instance, and that's done very well in the windows that we put in for instance, we featured a great [indiscernible] offering -- for the Valentine's, and that was really well accepted by the consumer side. I would say that I'm super pleased with the progress that we've done on sales with Benihana. And then the other thing that we did in the quarter for Benihana, and this is in our press releases, we've improved the margins of Benihana by 300 basis points quarter-to-quarter on the fourth quarter, although we didn't own them last year, we did one this year. So I think that really shows not only our ability to get to better sales with Benihana, but we've made significant improvements in the store level economics to the brand. So I would say that we had a very successful fourth quarter with Benihana brand, and I look forward to it. I also want to emphasize that that's over 55% of our business now. So it's really good to have a significant part of our business operating at a really high level.

This concludes our question-and-answer session. I would like to turn the conference back over to Manny Hilario for any closing remarks.

Thank you, operator. And as I always say, thank you, ONE Group teammates for living our mission every day only through your significant contributions can we be successful and do what we do. So I appreciate everyone's commitment and living that mission every day. And then, also for all of you on the conference call, thank you very much for your interest in our company. And I always look forward to seeing you all in our restaurants. Everybody, have a great thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.