GEN Restaurant 2025 Q3 Earnings Sharp Net Loss Amid Revenue Growth

GEN Restaurant Group (GENK) reported mixed third-quarter 2025 results, with revenue rising 2.7% to $50.4 million but swinging to a $0.11 loss per share from a $0.01 profit year-over-year. The company’s net loss of $3.63 million marked a 2,246.7% deterioration from 2024’s $169,000 net income, driven by inflationary pressures and softer consumer demand.

Revenue

GEN Restaurant’s total revenue for Q3 2025 increased to $50.42 million, reflecting a 2.7% year-over-year growth, primarily fueled by 15 new restaurant openings across the U.S. and South Korea. This expansion, including six international units, contributed to the revenue lift despite a 9.9% decline in same-store sales, attributed to macroeconomic challenges such as global tariffs and reduced customer traffic.

Earnings/Net Income

The company reported a net loss of $3.63 million ($0.11 per share) in Q3 2025, a stark contrast to the $169,000 profit ($0.01 per share) in the prior-year period. The 2,246.7% drop in net income underscores the impact of rising costs, including a 334-basis-point increase in cost of goods sold to 34.8% of restaurant sales, coupled with occupancy and operating expenses.

Price Action

GENK’s stock price declined 2.88% on the day of the earnings report, with a 9.55% drop over the previous trading week and a 7.53% monthly decline. Post-earnings, the stock surged 4.73% in after-hours trading, driven by optimism around operational expansions and product innovations, though this momentum remains untested in the broader market.

Post-Earnings Price Action Review

The strategy of buying GENK when revenue beats and holding for 30 days appears viable, supported by the company’s 2.7% revenue growth, 15–15.5% adjusted EBITDA margin guidance, and brand expansion initiatives. Recent operational expansions, including 15 new stores and partnerships with Costco and Sam’s Club, signal long-term growth potential. However, risks like global tariffs and macroeconomic pressures could dampen short-term performance. Investors should monitor same-store sales trends, margin resilience, and the success of grocery store initiatives to gauge the strategy’s viability over the next 30 days.

CEO Commentary

Wook Kim emphasized navigating macroeconomic challenges through new store openings, brand expansion, and product innovation. He highlighted 15 U.S. and six South Korean store launches, a “value-focused experimental dining model,” and $5.2 million average unit volume (AUV) as strengths. Kim also stressed resilience in 15% EBITDA margins despite 9.9% same-store sales declines, reiterating confidence in long-term profitability.

Guidance

GENK targets full-year 2025 revenue of $220–225 million with 15–15.5% restaurant-level adjusted EBITDA margins. It plans to open 17 stores by year-end, including 6 international units, and anticipates $250 million in annualized revenue post-new store openings. Leadership noted potential 2026 growth slowdowns if economic conditions persist, prioritizing operational efficiency and grocery channel expansion.

Additional News

GEN Restaurant expanded its Korean barbecue meat products to 600 grocery stores, including Albertsons and Vons, aiming for $100 million in annual sales by 2029. The company also secured gift card partnerships with Costco and Sam’s Club to boost brand visibility. Additionally, it plans to open two more stores by year-end and explore international expansion in South Korea, where lower construction costs and faster unit economics make the market attractive.