GEN Restaurant Group's Q2 2025: Unpacking Contradictions in Sales Performance, Margin Guidance, and International Expansion

Same-Store Sales Performance and Macroeconomic Factors, 4-Wall Margin Guidance and Operational Efficiency, Same-Store Sales and Traffic Trends, Premium Menu Mix and Impact on Sales, International Expansion and Market Strategies are the key contradictions discussed in GEN Restaurant Group's latest 2025Q2 earnings call.



Revenue Growth and New Store Openings:
- GEN Restaurant Group reported a 2.2% year-over-year increase in total revenue to $55 million for the second quarter of 2025, primarily due to new restaurant openings.
- This growth was driven by the opening of 9 new restaurants year-to-date, with plans to open 12 to 13 new stores by the end of 2025.

Impact of Macroeconomic Factors:
- The company experienced a sharp downturn in customer traffic and same-store sales in April due to global tariffs and immigration policies, particularly affecting locations in California, Texas, and Nevada.
- These factors led to a decline in sales across all regions and restaurants, but the company quickly adapted by optimizing staffing and operations.

Cost Management and Labor Efficiencies:
- Payroll and benefits as a percentage of company restaurant sales decreased by 29 basis points to 30.1% in the second quarter of 2025, driven by recently rolled-out labor efficiencies.
- This improvement in labor costs was achieved through the implementation of new technologies and AI tools, which are expected to further enhance operational efficiencies.

International Expansion and South Korea Entry:
- GEN Restaurant Group opened its first international expansion location in South Korea, with the costs to build these stores being approximately one-third of the cost of U.S. stores.
- The expansion into South Korea aims to identify early culinary trends for potential integration into U.S. locations and capitalize on lower operational costs.