GEN Restaurant Group (GENK) Q1 2025 earnings summary

Executive summary

• Revenue grew 13% year-over-year to $57.3 million in Q1 2025, driven by six new restaurant openings, expanding the footprint to 49 locations.

• Same-store sales declined 0.7% in Q1 2025, a significant improvement from a 5.6% decline in 2024.

• Net loss before income taxes was $2.1 million (EPS loss of $0.06), compared to net income of $3.8 million (EPS $0.11) in Q1 2024, which included a $3.4 million one-time gain.

• Adjusted EBITDA was $1.2 million (2.2% margin), or $3.3 million excluding pre-opening costs, down from $3 million in Q1 2024 (excluding one-time gain).

• Cash and cash equivalents stood at $15.4 million as of March 31, 2025, with no material long-term debt and full access to a $20 million credit line.

Financial highlights

• Restaurant-level adjusted EBITDA margin was 15.6%, slightly below the annual goal due to new store opening costs.

• Adjusted net income was $1.4 million ($0.04 per share), down from $2.9 million ($0.09 per share) in Q1 2024.

• Food costs rose 13.5% to $19.3 million, payroll and benefits increased 12.6% to $18.2 million, and occupancy expenses grew 18.6% to $5.1 million year-over-year.

• General and administrative expenses increased 36.3% to $6.4 million, reflecting higher marketing and personnel costs.

• Pre-opening costs were $2.6 million, up from $1.9 million, due to more new restaurant openings.

Outlook and guidance

• Full-year 2025 revenue expected between $245 million and $250 million, with a run rate approaching $300 million as new stores open.

• Restaurant-level adjusted EBITDA margin projected at 17% to 18% for the year.

• Plans to open 12-13 new restaurants in 2025, including three in South Korea.

• Targeting new restaurant payback periods of less than 3 years, equating to ROI of 33%-40%.

• Management believes cash on hand and operating cash flow will fund obligations and growth for the next 12 months.