GEN Restaurant Group Announces Second Quarter 2025 Financial Results

Core Insights - GEN Restaurant Group, Inc. reported a total revenue increase of 2.2% year-over-year to $55.0 million for Q2 2025, driven by the expansion of its restaurant count from 40 to 50 locations [6][7][23] - The company opened its first restaurant in South Korea and plans to exceed its target of 12 to 13 new restaurants by the end of 2025, with 7 additional locations currently under development [4][5][7] - Despite facing economic headwinds, including tariffs and immigration concerns, the company remains optimistic about its growth trajectory, supported by strong cash flow and a robust development pipeline [4][5] Financial Performance - The loss from operations for Q2 2025 was $1.9 million, representing 3.4% of revenue, compared to an income from operations of $1.6 million in Q2 2024 [7][10][28] - Restaurant-level adjusted EBITDA was $9.0 million, or 16.3% of revenue, for the quarter, showing an improvement from 15.6% in Q1 2025 [7][8][28] - General and administrative expenses increased to $6.4 million, or 11.6% of revenue, in Q2 2025, up from $5.1 million, or 9.4% of revenue, in Q2 2024 [9][10] Operational Highlights - The company has a total of 52 locations across eleven states and South Korea as of July 2025, with plans for further expansion [7][19] - Cash and cash equivalents stood at $9.6 million as of June 30, 2025, with no material long-term debt and full access to a $20 million line of credit [5][11][27] - The company paid its first dividend of $0.03 per share during the second quarter [7][11] Cost Structure - Total restaurant operating expenses as a percentage of revenue increased to 91.7% in Q2 2025 from 87.6% in Q2 2024, primarily due to higher costs associated with new restaurant openings [8][9] - Payroll and benefits decreased by 29 basis points compared to Q2 2024, indicating improved labor efficiencies [13][28] - Pre-opening expenses rose to $2.1 million in Q2 2025 from $1.6 million in Q2 2024, reflecting the company's aggressive expansion strategy [13][28]