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- **Revenue Growth**: Q3 2025 revenue rose 2.7% YoY to $50.4 million, driven by 15 new stores.
- **South Korea Expansion**: 6 stores opened in South Korea, with Kan Sushi generating $3-4 million AUV vs. $2-3 million for GEN.
- **Grocery Initiative**: 600 locations launched, targeting $100 million in 4-5 years with minimal slotting fees.
- **Financial Performance**: Net loss of $3.9 million due to preopening costs; adjusted EBITDA of $7.6 million (15% margin).
- **Cost Efficiency**: Payroll efficiency improved 196 bps YoY; new South Korean stores cost $800,000 to build.
- **2026 Growth**: 7 stores under construction, 11 additional openings on hold pending Q4 sales.

**【Management Opening Remarks (CFO)】**
- CFO Thomas Croal provided forward-looking statements and non-GAAP financial measures disclosures.
- Highlighted the company's third-quarter earnings release and reminded investors of risks associated with forward-looking statements.

**【CEO Commentary】**
- **Revenue Growth**: Q3 2025 revenue increased 2.7% YoY to $50.4 million, driven by new store openings.
- **Store Expansion**: Opened 15 stores in the first 9 months (8 in Q3), including 6 in South Korea, exceeding the initial 12-13 store target for 2025.
- **Grocery Initiative**: Launched ready-to-cook Korean meats in 600 Albertsons/Vons/Pavilions locations, targeting $100 million in annual revenue over 4-5 years.
- **Same-Store Sales**: Down 9.9% YoY due to macroeconomic pressures, but emphasized AUV of $5.2 million per restaurant as a key metric.
- **International Expansion**: South Korean stores (4 GEN, 2 Kan Sushi) show early success, with Kan Sushi projected to generate $3-4 million AUV vs. $2-3 million for GEN.
- **Cost Efficiency**: New stores in South Korea cost $800,000 to build, significantly lower than U.S. locations.

**【CFO Financial Commentary】**
- **Net Loss**: $3.9 million ($0.11 per share) vs. $0.01 per share in Q3 2024, driven by $2.3 million in preopening costs.
- **Adjusted EBITDA**: $7.6 million (15% of revenue) vs. $9 million (18.2%) in Q3 2024.
- **Cost Pressures**: COGS rose 334 bps YoY due to inflation and new stores; payroll efficiency improved 196 bps YoY.
- **Liquidity**: $5 million cash and $20 million credit facility; may slow 2026 growth if macro conditions persist.
- **Return on Assets**: Warned against using total assets to measure ROI due to $140 million operating lease asset offsetting $165 million lease liabilities.

**【Q&A Highlights】**
- **South Korea Performance**: Kan Sushi outperforms GEN, with AUV of $3-4 million vs. $2-3 million for GEN. New stores cost $800,000 to build.
- **Grocery Initiative Velocity**: Test locations in Southern California show 60%+ new customers, with plans to expand to 300 Midwest stores.
- **Labor Efficiency**: Deployed AI technologies to reduce payroll costs, achieving 196 bps YoY improvement.
- **2026 Growth Strategy**: 7 stores under construction (2-3 to open by year-end), 11 additional openings on hold pending Q4 sales.
- **Premium Menu Impact**: 4-5% penetration but 1% margin dilution; plans to revamp menu in early 2026.
- **Competitive Landscape**: Competitors facing SBA loan challenges but new entrants continue to open stores.


GEN Restaurant Group, Inc. (GENK) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

GENK

GENK fundamentals

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