GEN Restaurant Group — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the third quarter of 2026 was $48.7 million, a 3.3% decrease from $50.4 million in the same period of 2025.
• Restaurant revenue was $44.0 million, a 12.7% decrease year-over-year, driven by a 9.2% decline in comparable restaurant sales and a smaller restaurant base.
• CPG revenue generated was $4.7 million in Q3 2026, compared to no CPG revenue in the prior-year period.
• Loss from operations was $6.0 million (12.4% of revenue) in Q3 2026, compared to a $3.7 million loss (7.4% of revenue) in Q3 2025.
• General and administrative expenses totaled $5.5 million (11.2% of revenue) in Q3 2026, down 15.3% from $6.5 million (12.8% of revenue) in Q3 2025.
• Net loss for the quarter was $5.5 million ($0.16 per share), compared to a net loss of $3.6 million ($0.11 per share) in the prior-year quarter.
• Adjusted EBITDA reflected a $0.6 million loss in Q3 2026, compared to a $0.2 million loss in Q3 2025.
• Cash and cash equivalents totaled $2.9 million as of September 30, 2026, compared to $2.8 million as of December 31, 2025.
• Total debt outstanding was $26.8 million as of September 30, 2026, compared to $14.6 million as of December 31, 2025.

Guidance and Future Outlook:

• The Company expects to reach a CPG revenue run rate of $40 million per year and positive consolidated net income on a run-rate basis by the end of 2027.
• These projections assume completion of the Chubby transaction and planned restructuring of corporate overhead.
• Newly secured retail placements are expected to reach shelves beginning in the second quarter of 2027, which are not yet reflected in third-quarter results.
• The Company aims to eliminate outstanding debt using proceeds from the Chubby transaction and expects to have capital allocation flexibility thereafter, including potential buybacks or dividends.

Business Segments and Product Lines:

• Retail footprint expanded to more than 2,000 doors nationwide, adding 14 Bristol Farms stores, 55 Vallarta Supermarkets locations, and Olé City Market.
• The Company entered university dining and live-entertainment venues for the first time with accounts at UCLA Dining and SoFi Stadium.
• The Company retains full ownership of the GEN brand, its CPG business, and its Cerritos, California restaurant, which will serve as a hub for training, staffing, and R&D.
• A binding letter of intent was signed to sell operations at 47 U.S. GEN Korean BBQ restaurants to Chubby Group in a transaction valued at up to $100 million.
• The restaurant transition to Chubby is expected to occur in four phases over 12 months, with Chubby funding all conversions and buildouts.

Market and Competitive Landscape:

• The global rise of Korean culture, including K-pop, K-dramas, and social media, is driving robust demand for Korean food.
• The Company notes that millions of guests have already cooked at a GEN grill, providing brand recognition that reduces the need for years of awareness-building typically required by new CPG brands.
• Management states that Korean brands are currently in high demand in the market.

Risks and Challenges:

• The transaction with Chubby Group is subject to the negotiation and execution of definitive agreements, satisfaction of closing conditions, and obtaining necessary landlord consents, license transfers, lender arrangements, and regulatory or stockholder approvals.
• There is a risk that the transaction may not be consummated on anticipated terms, timelines, or at all.
• Risks include Chubby Group failing to make payments, or the guarantee and collateral proving insufficient.
• Performance of acquired restaurants may differ from historical results, affecting sweep payments.
• The Company faces risks related to reducing corporate overhead as planned and achieving anticipated CPG revenue and net income run rates on the expected timeline.
• There is no guarantee that the Company will pay dividends, repurchase shares, or return capital to shareholders.

Management Commentary and Tone:

• Chairman and CEO David Kim described the third quarter as the beginning of a "new GEN," focusing on monetizing restaurant operations while retaining the CPG business.
• Management emphasized a shift toward a "lean, debt-free GEN" with a focus on profitable revenue rather than revenue alone.
• Kim noted that the transaction transforms the balance sheet by reducing operating lease liabilities and adding a guaranteed, secured receivable.
• The Company is reducing corporate overhead, with G&A expenses down 15% year-over-year, and anticipates a substantial reduction in the corporate workforce as the transition progresses.
• Management expressed confidence in the CPG business's growth trajectory and the optionality to return capital to shareholders once debt is retired.

Other Key Points:

• The transaction with Chubby Group is valued at up to $100 million and is expected to substantially reduce operating lease liabilities.
• Chubby Group would continue the employment of team members at each acquired restaurant.
• GEN will retain operating profits from restaurants until each location is taken over by Chubby.
• The Company is focused on profitable revenue and has locked in a significant number of new retail placements not yet on shelves.
• The Company plans to restructure its overhead and infrastructure around a leaner CPG business, with senior management dedicating full time to building the CPG segment.
• The Company previously reported a net loss of $17.3 million for the nine months ended September 30, 2026, compared to $7.3 million in the same period of 2025.