Core Viewpoint - GEN Restaurant Group (GENK) has identified a new growth opportunity in the packaged foods sector, which is not yet reflected in its current market valuation [1] Group 1: Company Overview - The main concept of GEN Restaurant Group is GEN Korean BBQ, which is a significant part of its business model [1] Group 2: Investment Thesis - The investment thesis suggests that the potential in the packaged foods market presents a long-term growth opportunity for GENK [1]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 increased by 2.7% year over year to $50.4 million, driven by new restaurant openings [8][10] - Same store sales dropped by 9.9% in Q3 2025, reflecting a downturn in customer traffic due to macroeconomic pressures [8][9] - Restaurant level adjusted EBITDA margin was 15% for Q3 2025, down from 18.2% in Q3 2024 [19] - Net loss before income taxes was $3.9 million, equating to $0.11 per diluted share, compared to a net income of $0.3 million or $0.01 per diluted share in Q3 2024 [18] Business Line Data and Key Metrics Changes - The company opened 15 new restaurants in the first nine months of 2025, with eight openings in Q3 alone [5][6] - The average unit volume (AUV) revenue per restaurant was $5.2 million, indicating strong performance in the casual dining space [9][10] - The cost of goods sold as a percentage of restaurant sales increased to 34.8%, reflecting inflationary pressures and the impact of new restaurant openings [14][16] Market Data and Key Metrics Changes - The company has expanded its grocery store initiatives, launching ready-to-cook Korean branded meats in over 600 grocery locations, anticipating annual revenues from this segment could exceed $100 million over the next four to five years [7][8] - The company is experiencing a downturn in customer traffic, particularly in California and Texas, attributed to economic factors affecting its customer base [30][31] Company Strategy and Development Direction - The company aims to build brand awareness through grocery store initiatives and expand its product offerings beyond restaurants [7][12] - The management is focused on maintaining growth while considering a potential slowdown in new restaurant openings if economic conditions do not improve [20][42] - The company plans to continue its expansion in South Korea, where operational costs are lower compared to the U.S. [6][55] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment for the restaurant industry but expressed confidence in their value-focused dining model for long-term growth [5][10] - The company is monitoring customer traffic closely and may adjust growth plans based on performance in the upcoming holiday season [20][42] - Management highlighted the importance of maintaining customer loyalty by not raising prices despite rising costs [15] Other Important Information - The company has approximately $5 million in cash and cash equivalents and full availability of a $20 million revolving credit facility [20][21] - The balance sheet reflects $165 million in lease liabilities, offset by $140 million in operating lease assets [21] Q&A Session Summary Question: Understanding the Korean units and their economics - Management indicated that the cons are outperforming the gens, with anticipated AUVs of $4 million for cons and $2-3 million for gens, with construction costs around $800,000 per store [26][29] Question: Trends on existing locations and Q4 expectations - Management confirmed continued softness in customer traffic, particularly in California, and expects similar trends in Q4 [30][31] Question: Grocery store initiative and revenue expectations - Management reported strong initial sales in test locations and expressed optimism about expanding product offerings in grocery stores [32][34] Question: Slowing or halting unit growth - Management confirmed they are considering pausing new restaurant openings if consumer trends do not improve, while still having several locations under construction [40][42] Question: Labor efficiency improvements - Management attributed labor efficiency gains to new technologies and operational adjustments, with potential for further improvements [53] Question: Competitive environment and market performance - Management noted that competitors are facing sales declines, but new entrants continue to emerge in the market [56]

Expansion and Development - The company operates 57 restaurants across various states and South Korea, with plans for continued expansion[149]. - During the first nine months of 2025, the company opened 15 new restaurants and closed one, with 16 more under development[151]. - In the first nine months of 2025, the company opened 15 new restaurants, all self-funded[215]. Financial Performance - Revenue for the three months ended September 30, 2025, was $50.4 million, an increase of $1.3 million or 2.7% compared to $49.1 million in the same period of 2024, driven by an increase in the number of restaurants from 41 to 57[182]. - For the nine months ended September 30, 2025, revenue was $162.8 million, an increase of $9.0 million or 5.9% compared to $153.7 million in 2024, attributed to the opening of 16 additional restaurants[192]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $3.3 million, with an Adjusted EBITDA Margin of 2.0%, compared to $11.3 million and 7.3% for the same period in 2024[206]. - Restaurant-Level Adjusted EBITDA for the nine months ended September 30, 2025, was $25.5 million, with a Restaurant-Level Adjusted EBITDA Margin of 15.6%, compared to $27.6 million and 18.0% for the same period in 2024[212]. Costs and Expenses - Food costs increased to $17.5 million for the three months ended September 30, 2025, up $2.0 million or 13.6% from $15.4 million in 2024, with food costs as a percentage of revenue rising to 34.8% from 31.4%[183]. - Payroll and benefits costs decreased to $14.4 million, down $0.6 million or 3.9% from $15.0 million in 2024, resulting in a reduction in payroll costs as a percentage of revenue from 30.5% to 28.5%[184]. - Occupancy expenses rose to $5.4 million, an increase of $1.3 million or 31.9% compared to $4.1 million in 2024, with occupancy expenses as a percentage of revenue increasing to 10.8% from 8.4%[185]. - Total restaurant operating expenses for the three months ended September 30, 2025, were $48.1 million, an increase of $4.4 million or 10.0% from $43.8 million in 2024[182]. - General and administrative expenses increased to $6.5 million, up $1.3 million or 23.8% from $5.2 million in 2024, with these expenses as a percentage of revenue rising to 12.8% from 10.6%[189]. - The total costs and expenses for the nine months ended September 30, 2025, were $170.6 million, an increase of $18.7 million or 12.3% from $151.9 million in 2024[192]. - General and administrative expenses grew by $4.3 million, or 28.7%, to $19.2 million for the nine months ended September 30, 2025, primarily due to additional marketing and personnel costs[200]. Profitability and Loss - The net loss for the three months ended September 30, 2025, was $3.6 million, compared to a net income of $0.2 million in 2024, representing a decrease of $3.8 million or 2246.7%[182]. - Net cash provided by operating activities for the nine months ended September 30, 2025 was $3.8 million, down from $10.5 million in the same period of 2024[223][224]. Debt and Financing - The company entered into a $20 million line of credit with PCB Bank, maturing on September 25, 2026, with no outstanding amounts as of September 30, 2025[152]. - As of September 30, 2025, the company had a balance of $1.5 million on a $2 million loan and $3.7 million on a $4 million loan, both with a 7.50% interest rate[153][154]. - As of September 30, 2025, the company had $13.3 million in contractual obligations related to debt, expected to be paid within the next 12 months[230]. - The company utilized $5.0 million for payments on the line of credit and third-party notes payable during the nine months ended September 30, 2025[227]. Market and Economic Conditions - Inflation has not had a material effect on the company's operations historically, including the first nine months of 2025[245]. - The company is exposed to interest rate risk with $6.3 million of outstanding loans bearing interest at the Wall Street Journal Prime Rate plus 0.25%[247]. - The company experienced a foreign currency translation loss of $74 thousand due to the depreciation of the South Korean won against the U.S. dollar[229]. Other Financial Activities - The company completed an IPO on June 30, 2023, selling 4,140,000 shares of Class A common stock at $12.00 per share, resulting in net proceeds of approximately $46.2 million[214]. - The company declared a dividend of $0.03 per share in May 2025, resulting in total payments of $988 thousand[221]. - The expected reduction in tax payments associated with the Tax Receivable Agreement is approximately $117.2 million through 2037, with $99.6 million payable to certain members of GEN LLC[217]. - Pre-opening costs increased to $7.0 million for the nine months ended September 30, 2025, compared to $5.3 million for the same period in 2024, reflecting more restaurants under development[199]. - Depreciation and amortization expenses rose to $6.5 million for the nine months ended September 30, 2025, with restaurant-level depreciation and amortization as a percentage of revenue increasing from 3.2% to 4.0%[198].

Financial Performance - Total revenue increased by 2.7% year-over-year to $50.4 million for Q3 2025, compared to $49.1 million in Q3 2024[7] - Loss from operations was $3.7 million, or 7.4% of revenue, for Q3 2025, compared to income from operations of $88 thousand, or 0.2% of revenue, for Q3 2024[8] - Net loss before income taxes was $3.9 million for Q3 2025, compared to net income before income taxes of $284 thousand in Q3 2024[10] - Net loss for the three months ended September 30, 2025, was $3,628,000, compared to a net income of $169,000 in the same period of 2024[26] - Adjusted net loss income attributable to GEN Restaurant Group, Inc. for the three months ended September 30, 2025, was $(107,000), compared to $349,000 in the same period of 2024[31] - Adjusted net loss income per share of Class A common stock for the three months ended September 30, 2025, was $(0.02), compared to $0.07 in the same period of 2024[31] Operational Metrics - Restaurant-level adjusted EBITDA was $7.6 million, or 15.0% of revenue, for Q3 2025, a decrease from 16.3% in Q2 2025[8] - Adjusted EBITDA for the three months ended September 30, 2025, was $226,000, down from $3,436,000 in the same period of 2024[26] - Restaurant-level Adjusted EBITDA margin was 15.0% for the three months ended September 30, 2025, compared to 18.2% in the same period of 2024[27] - Comparable restaurant sales performance declined by 9.9% for the three months ended September 30, 2025, compared to a decline of 9.1% in the same period of 2024[24] Expansion and Development - The company opened 15 new locations in the first nine months of 2025, exceeding its target of 12 to 13 new restaurants by the end of the year[6] - The company plans to open two more stores by the end of 2025, maintaining a strong development pipeline[6] - The number of restaurants increased to 57 as of September 30, 2025, from 41 as of September 30, 2024[24] Financial Position - Cash and cash equivalents at September 30, 2025, were $4.8 million, with total available liquidity of $20.0 million[11] - Cash and cash equivalents decreased to $4,793,000 from $23,675,000 as of December 31, 2024[24] - Total assets increased to $245,539,000 from $240,415,000 as of December 31, 2024[24] - Total liabilities rose to $205,952,000 from $194,798,000 as of December 31, 2024[24] Cost and Expenses - General and administrative expenses totaled $6.5 million, or 12.8% of revenue, for Q3 2025, up from $5.2 million, or 10.6% of revenue, in Q3 2024[9] - Cost of goods sold increased by 334 basis points compared to Q3 2024, primarily due to inflationary cost increases[13] Product Offering - The company is expanding its product offerings, including ready-to-cook meats at over 600 grocery stores in California and Hawaii[5]

Core Viewpoint - GEN Restaurant Group, Inc. will hold a conference call on November 7, 2025, to discuss its financial results for Q3 2025, which ended on September 30, 2025 [1]. Company Overview - GEN Korean BBQ is one of the largest Asian casual dining restaurant concepts in the United States, founded in 2011 by two Korean immigrants in Los Angeles [3]. - The brand has expanded to over 57 company-owned locations, offering a unique dining experience where guests grill their own meals at the table [3]. - The menu features traditional Korean and Korean-American dishes, including high-quality meats, poultry, seafood, and mixed vegetables [3]. - The restaurant's modern décor and lively atmosphere create an engaging and interactive dining experience that appeals to a broad demographic [3]. Conference Call Details - The conference call will be hosted by Chairman and CEO David Kim and CFO Tom Croal, followed by a Q&A session [2]. - The call is scheduled for November 7, 2025, at 5:00 p.m. Eastern time [2]. - Participants can join via toll-free and international dial-in numbers, with a conference ID provided for access [2]. - The call will be broadcast live and available for replay on the company's investor relations website [3].

Group 1 - GEN has expanded its grocery retail footprint through a new partnership with 300 Safeway stores, in addition to existing distribution through 300 Pavilions, Albertsons, and Vons stores [1][2] - The company's Ready-to-Cook Meats line, launched last month, will now be available in over 300 Safeway stores, increasing total retail distribution to 600 grocery stores across California and Hawaii [2][3] - The rapid expansion to 600 stores is expected to be fully in place by the end of November 2025, indicating strong consumer demand for authentic Korean BBQ and effective growth strategies [3] Group 2 - GEN Korean BBQ is one of the largest Asian casual dining restaurant concepts in the United States, founded in 2011, with 57 company-owned locations [4] - The dining experience at GEN allows guests to serve as their own chefs, preparing meals on embedded grills, featuring a menu of traditional Korean and Korean-American food [4]

Company Overview - GEN is an innovative leader in Korean BBQ and ready-to-cook meal consumer packaged goods (CPG) solutions, expanding its grocery retail footprint through partnerships with Pavilions, Albertsons, and Vons [1][2] - The company launched its Ready-to-Cook Meats line in 31 Pavilions stores and is now expanding to over 300 Albertsons and Vons locations in Southern California [1][2] Expansion and Growth Strategy - The rapid expansion from 31 to over 300 stores within weeks indicates strong consumer demand and the effectiveness of GEN's growth strategy [2] - GEN's Ready-to-Cook line features four authentic Korean BBQ-inspired products, designed for convenience and flavor, aligning with grocery industry trends [2][6] Brand Recognition and Consumer Connection - Over 50% of consumers purchasing GEN's Ready-to-Cook meats were already familiar with the brand from its restaurants, highlighting strong brand recognition as a key driver of retail momentum [3] - The connection with consumers is reinforced through various channels, including restaurants, gift cards at Costco and Sam's Club, and social media [3] Future Product Development - GEN plans to expand its product offerings beyond the initial four meat SKUs, with new product development already underway to provide more variety and convenience [4] - The company aims to leverage growing brand recognition and market momentum to enhance its product line [4] Industry Trends - The U.S. supermarket industry sales are projected to exceed $900 billion in 2025, with retail meat sales reaching $104.6 billion in 2024, reflecting a 5% increase from the previous year [6] - Korean cuisine is one of the fastest-growing segments in the ethnic food market, with 61% of Americans expressing interest in trying Korean foods [6] - The ethnic/Asian food sections in supermarkets are expanding, with Asian food unit sales up 3.9% year-over-year and dollar sales up 4.9% [6]

Core Insights - GEN Restaurant Group, Inc. has opened its second location in San Diego, California, specifically in La Jolla, expanding its presence in the market [1][2] - The new restaurant marks the 15th opening for the company in the current year, highlighting its growth strategy and commitment to connecting with customers [2] - GEN Korean BBQ is recognized as one of the largest Asian casual dining concepts in the U.S., with over 56 company-owned locations since its founding in 2011 [3] Company Overview - GEN Korean BBQ offers a unique dining experience where guests grill their own meals at the table, featuring a diverse menu that includes traditional Korean and Korean-American dishes [3] - The La Jolla location is strategically situated near the University of California, San Diego, targeting both local residents and visitors [2][3] - The restaurant operates with extended hours, catering to a wide range of dining preferences throughout the week [3]

Company Overview - GEN Restaurant Group, Inc. (NASDAQ: GENK) is not considered a top investment choice by the analyst, indicating uncertainty in establishing a fair target price for the company [1]. Analyst Background - The analyst is the founder of Goulart's Restaurant Stocks, a research firm that specializes in the U.S. restaurant industry, covering various segments from quick-service to fine dining [1]. - The analyst has extensive experience in finance and business management, holding an MBA in Controllership and Accounting Forensics, and a Bachelor's in Business Administration [1]. Research Focus - The research firm focuses on uncovering hidden value in public equities, particularly in micro and small-cap companies that are often overlooked by mainstream analysts [1]. - The analyst employs advanced financial modeling, sector-specific KPIs, and strategic insights in their research efforts [1].

Core Insights - GEN Restaurant Group, Inc. (NASDAQ: GENK) is not a preferred investment choice, with ongoing challenges in determining a fair target price for the company [1] Company Overview - The company operates in the all-you-can-eat restaurant segment, which is a niche within the broader restaurant industry [1] - The analysis is conducted by a research firm focused on various restaurant categories, including quick-service, fast casual, fine dining, and niche concepts [1] Analyst Background - The analyst has 10 years of experience in investment banking and specializes in industry and company research, particularly in the U.S. restaurant sector [1] - The analyst employs advanced financial modeling and sector-specific KPIs to identify hidden value in public equities, with a focus on micro and small-cap companies [1] Research Focus - The research covers a range of sectors including consumer discretionary, food & beverage, casinos & gaming, and IPOs [1] - The analyst's work has been featured on multiple financial platforms, indicating a recognized expertise in the field [1]