GEN Restaurant Group (NASDAQ:GENK) is looking to shift its focus toward packaged Korean food while pursuing a proposed sale of 47 U.S. restaurants, executives said on the company’s third-quarter earnings call. The company reported lower revenue and a wider net loss for the quarter.
Chairman and CEO David Kim said GEN is targeting a $40 million annualized consumer packaged goods revenue run rate by the end of 2027. The plan depends in part on new retail placements and the launch of refrigerated, ready-to-eat meals next year.
The proposed restaurant transaction with Chubby Group could bring GEN up to $100 million over time, but the companies have not signed a definitive asset purchase agreement. Final terms, payment protections and closing arrangements remain subject to negotiation and applicable closing conditions, Kim said.
Third-Quarter Loss Widens
Revenue fell 3.3% to $48.7 million from $50.4 million a year earlier. The net loss increased to $5.5 million, or $0.16 per basic and diluted Class A share, from $3.6 million, or $0.11 per share.
The operating loss widened to $6 million from $3.7 million. Adjusted EBITDA, a non-GAAP measure, was a loss of $600,000, compared with a loss of approximately $200,000 in the prior-year quarter.
General and administrative expenses fell 15.3% to $5.5 million, reflecting corporate cost reductions and lower stock-based compensation, according to CFO Luke Hewko. Those savings more than offset continued investment in marketing and sales efforts for the packaged goods business.
GEN ended September with $2.9 million in cash and cash equivalents and $26.8 million in outstanding debt. That compares with $2.8 million in cash and $14.6 million in debt at the end of 2025. Hewko said debt reduction remains a priority, with the timing dependent on operating cash, any transaction proceeds and other obligations.
Proposed Restaurant Transition
Under the contemplated structure, GEN would retain its brand, packaged goods business and Cerritos, California, restaurant, which Kim said would support training and product development. Hewko said GEN would also retain its existing 49% ownership interest in five Chubby Group-branded restaurants.
The proposed transfer would occur in phases, and GEN would continue to operate each restaurant and bear its operating responsibilities until that location transferred, Kim said. The timing would depend on the final agreement and conditions for each location. The third-quarter results reflected the full restaurant portfolio.
Kim said GEN plans to reduce corporate overhead by about 75% by the end of the transition, with further cuts targeted afterward. Hewko said the company is targeting annual general and administrative expenses of approximately $6 million to $8 million in connection with the proposed transaction. GEN recorded $19.5 million in those expenses during the first nine months of 2026.
Hewko cautioned that the timing and extent of savings would depend on the pace of restaurant transfers and GEN’s ability to cut costs while supporting packaged goods growth.
Packaged Goods Expansion
GEN’s core packaged products are frozen, ready-to-cook marinated meats, including beef bulgogi, short rib, spicy pork bulgogi and chicken bulgogi. Kim said the company uses manufacturing partners rather than owning plants.
During the third quarter, GEN added distribution at all 14 Bristol Farms stores, 55 Vallarta Supermarket locations and Olé City Markets, Kim said. He also cited entry into university dining and live entertainment venues. GEN products are sold at a range of grocery chains and on rotation at Costco in several regions, he added.
Kim said additional secured placements are expected to begin reaching shelves in the second quarter of 2027. The company has met with Walmart and anticipates entering programs in the second quarter, but Kim said he could not predict the size of potential orders. Discussions about a national Costco program are also underway.
GEN plans to introduce fully cooked, refrigerated Korean barbecue meats and complete meals in 2027 while continuing to sell its frozen products. During the question-and-answer session, Kim said he hoped the ready-to-eat products could roll out in late first quarter or early second quarter, once packaging is complete.
Hewko emphasized that the $40 million target represents an annualized sales pace at the end of 2027, not a forecast for the full year. Reaching it depends on placements, repeat orders, customer demand and the company’s ability to supply retailers, he said.
Executives said a future dividend or share buyback could be considered after debt is retired, but Kim said no decision has been made on returning capital to shareholders.
About GEN Restaurant Group (NASDAQ:GENK)
GEN Restaurant Group, Inc. operates GEN Korean BBQ, an Asian-inspired restaurant concept specializing in Korean barbecue. Its restaurants offer an all-you-can-eat dining experience in which guests select from a menu of marinated meats, seafood, vegetables, appetizers and other Korean- and Asian-influenced dishes that are prepared on tabletop grills. The company’s menu typically includes items such as bulgogi, spicy pork, chicken, beef, shrimp and other barbecue selections, along with traditional Korean side dishes and sauces.
