Financial Data and Key Metrics Changes - In Q1 2025, the company reported a 13% year-over-year increase in total revenues to $57.3 million, driven by restaurant expansion and existing location success [5][18] - Same store sales decreased by 0.7% in Q1 2025, a significant improvement from a 5.6% decline in 2024 [6][7] - Restaurant level adjusted EBITDA margin was 15.6%, slightly below the annual goal of 17-18% due to costs from new openings [7][20] - The company experienced a net loss before income taxes of $2.1 million in Q1 2025, compared to a net income of $3.8 million in Q1 2024, which included a one-time gain [22][23] Business Line Data and Key Metrics Changes - The company opened six new restaurants in Q1 2025, increasing the total to 49 locations, with plans for 12-13 new stores by February 2026 [6][28] - Adjusted EBITDA for Q1 2025 was $1.2 million, down from $6.4 million in Q1 2024, but improved when excluding a one-time gain [23][24] Market Data and Key Metrics Changes - The company is expanding into South Korea, planning to open three new restaurants in 2025, with the first expected by the end of Q2 [15][16] - The construction cost for new units in South Korea is projected to be 25-30% lower than in the US, enhancing potential returns [58] Company Strategy and Development Direction - The company focuses on a value-priced all-inclusive dining model, which is expected to support long-term growth [5][18] - Initiatives include enhancing training programs, expanding gift card sales through major retailers, and testing dual concept stores [11][12][13] - The company is prepared to pause new unit expansion if tariffs significantly impact construction costs [17][50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic pressures affecting consumer demand, particularly in recent months [32][33] - The company remains confident in achieving revenue targets of $245-250 million for 2025 and an annual run rate approaching $300 million by year-end [16][28] Other Important Information - The company has a strong liquidity position with $15.4 million in cash and only $5 million in long-term debt [24][27] - The founding group retains 85% ownership, aligning their interests with public shareholders [25] Q&A Session Summary Question: Can you discuss same store sales progression in Q1 and current trends? - Management noted strong performance in January and February, but a slight decline in March and continuing negative trends in April and May [32][33] Question: What gives confidence in achieving the 17-18% EBITDA margin target for 2025? - Management indicated that Q1 is typically the lowest quarter and expects to improve margins as the year progresses [47][48] Question: What are the expectations regarding the impact of tariffs on new builds? - Management expressed uncertainty about price increases for equipment and materials from China but is prepared to pause construction if necessary [50][51] Question: How are the new restaurant openings performing? - Management stated it is too early to assess performance, with mixed results from the new locations [52] Question: Can you break down Q1 performance in terms of average check versus traffic? - Management reported a 2.5% increase in average check but a 10-11% reduction in customer traffic, resulting in a less than 1% overall decline [56] Question: What are the expectations for the South Korean market? - Management highlighted the competitive landscape and lower construction costs, indicating potential for strong returns despite economic pressures [58][60] Question: What is the current redemption rate for gift cards? - Management reported stabilization around 65%, with indications that gift card users tend to spend more during visits [61][62]

Core Insights - GEN Restaurant Group, Inc. reported a strong start to 2025 with the opening of six new restaurants, including a dual-concept location in Austin, Texas, combining GEN Korean BBQ and Kan Sushi [4][8] - The company anticipates total revenue for the year to be between $245 million and $250 million, with a restaurant-level adjusted EBITDA margin projected between 17% and 18% [5][8] - Despite a cautious consumer spending environment, the company achieved a 13% increase in total revenue year-over-year for Q1 2025, reaching $57.3 million compared to $50.8 million in Q1 2024 [6][8] Financial Performance - Total revenue increased by 13.0% to $57.3 million in Q1 2025 compared to $50.8 million in Q1 2024 [6][8] - Restaurant-level adjusted EBITDA rose by 6.0% to $9.0 million from $8.4 million in the prior year [8] - The company reported a net loss before income taxes of $2.1 million, equating to $(0.06) per diluted share, compared to a net income of $3.8 million or $0.11 per diluted share in Q1 2024 [11][32] Operational Highlights - The company opened six new locations in Q1 2025, bringing the total to 49 locations across eleven states [8][25] - Comparable restaurant sales decreased by 0.7% in Q1 2025, a slight improvement from a 5.6% decline for all of 2024 [8][25] - The company has a robust development pipeline, aiming to open 12 to 13 new restaurants in fiscal 2025, including three international locations in South Korea [5][8] Cost and Expense Analysis - Total restaurant operating expenses as a percentage of revenue increased by 120 basis points to 88.0% in Q1 2025 from 86.8% in Q1 2024 [7][8] - General and administrative expenses increased to $5.6 million, or 9.8% of total revenue, reflecting increased personnel for new restaurant development and additional marketing expenditures [10][8] - Pre-opening expenses rose to $2.6 million in Q1 2025 from $1.9 million in Q1 2024 due to the opening of six new restaurants [17][8] Cash Position and Liquidity - As of March 31, 2025, the company had $15.4 million in cash and cash equivalents, with no material long-term debt and full access to a $20 million line of credit [13][8] - The company maintains a strong cash flow position, which supports its strategic priorities for growth [5][8]