GEN Restaurant 2025 Q2 Earnings Misses Targets, Net Loss Widens 182.3%

GEN Restaurant Group (GENK) reported its fiscal 2025 Q2 earnings on Aug 06th, 2025. The results missed expectations with a net loss widening significantly. The company raised its development outlook but did not provide a formal guidance adjustment.

Revenue
GEN Restaurant’s total revenue rose 2.2% to $55.04 million in 2025 Q2, reflecting a year-over-year increase from $53.86 million in the prior year period. This growth was primarily driven by the expansion of its restaurant footprint, with 50 restaurants in operation compared to 40 in the prior year quarter.

Earnings/Net Income
The company swung to a loss of $0.05 per share in 2025 Q2 from a profit of $0.06 per share in 2024 Q2, representing a 183.3% negative change. Concurrently, the net loss expanded to $-1.70 million, marking a 182.3% deterioration from the net income of $2.06 million in the prior year period. The EPS performance indicates a significant downturn in profitability.

Price Action
The stock price of GEN Restaurant has climbed 6.41% during the latest trading day, 3.75% during the most recent full trading week, and 8.36% month-to-date.

Post-Earnings Price Action Review
The strategy of buying GEN Restaurant (GENK) shares after its revenue raise quarter-over-quarter on the financial report released date and holding for 30 days resulted in a significant underperformance. Over the past three years, the strategy yielded a return of -64.75%, a substantial loss compared to the benchmark return of 41.73%. The strategy's excess return was -106.48%, and the CAGR was -39.38%, indicating a sharp decline in value over the period. The strategy also had a high maximum drawdown of 0.00%, which suggests that there were no losses during the holding period, but the overall performance was dismal.

CEO Commentary
David Kim, Chairman and Chief Executive Officer of GEN, highlighted the Company’s “solid results” for the first half of 2025, including the opening of its first restaurant in South Korea, which he emphasized as a milestone for global expansion. He acknowledged challenges such as tariffs and immigration-related economic headwinds, noting same store sales traffic declines in May and June, followed by customer returns in July. Kim expressed confidence in mitigating these headwinds through cost savings and operational efficiencies and underscored the robust development pipeline, with 7 additional restaurants under construction expected to open by year-end. He also referenced the early success of the dual-concept format as a growth lever, alongside strong cash flow, over $9.6 million in cash and cash equivalents, no material long-term debt, and full availability of a $20 million line of credit.

Guidance
The Company expects to exceed its 2025 development target of 12 to 13 new stores, with 7 additional restaurants under development expected to complete construction by year-end. It expects to absorb current economic headwinds through cost savings and operational efficiencies. The Company also anticipates the continued rollout of projects from its incubator division in 2025 and growth in brand awareness through expansion into big box retailers with gift cards and other products under the GEN name.

Additional News
GEN Restaurant Group announced the opening of its first restaurant in South Korea, marking a significant milestone in its global expansion strategy. The company also paid its first-ever dividend of $0.03 per share during the second quarter of 2025, a move signaling confidence in its financial stability. Additionally, GEN opened nine new locations in the first half of 2025, expanding its total store count to 52 across eleven U.S. states and South Korea. The company remains on track to surpass its 2025 development target of 12 to 13 new restaurants. The Company’s incubator division is set to roll out more projects in 2025, and the brand is expanding its presence through partnerships with big box retailers, leveraging gift cards and other branded products under the GEN name to grow brand awareness. The company has also emphasized its strong cash flow position, with over $9.6 million in cash and cash equivalents, and no material long-term debt.