GEN Restaurant Group, Inc. reported a significant increase in financial performance for the fiscal year ending December 31, 2024, with revenues reaching $208.4 million, a 15.1% increase from $181.0 million in 2023. The growth in revenue was primarily attributed to the expansion of its restaurant base, which increased from 37 to 43 locations during the year. However, the company experienced a decline in net income, which fell to $4.5 million from $11.4 million in the previous year, marking a decrease of 60.4%. This decline was largely due to increased operating expenses, including a 19.2% rise in total restaurant operating expenses, which amounted to $186.5 million.
In terms of operational developments, GEN Restaurant Group has been actively expanding its footprint, opening six new restaurants in 2024 and three more in January 2025. The company has signed leases for an additional 18 locations, with plans to open 10 to 13 new restaurants in 2025, including its first international locations in South Korea. The average unit volume (AUV) for the year was reported at $5,457, a decrease from $5,873 in 2023, indicating a need for the company to enhance customer engagement and sales strategies.
Strategically, the company completed the acquisition of the remaining 50% interest in GKBH Restaurant, which is expected to enhance its operational control and profitability. The acquisition was valued at $6 million and is anticipated to contribute positively to future earnings. Additionally, GEN Restaurant Group has implemented a modest price increase in late 2024, which did not adversely affect customer traffic, suggesting that the company may have room for further price adjustments to offset rising costs.
Looking ahead, GEN Restaurant Group faces challenges related to inflationary pressures on food and labor costs, which increased as a percentage of revenue. The company reported food costs at 33.0% of revenue, up from 32.2% in 2023, and payroll and benefits costs decreased slightly to 30.9% from 31.4%. The management remains optimistic about future growth, focusing on expanding its restaurant base and enhancing operational efficiencies to improve profitability. However, the company acknowledges the uncertainties in consumer spending and market conditions that could impact its financial performance in the coming years.
About GEN Restaurant Group, Inc.
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