Operating margins have deteriorated to -13.4% in 2026Q1, reflecting an inability to manage protein costs and rising SG&A expenses that reached $6.9M.
| Sales/Revenue | 209.1M | 212.54M | 208.38M | 181.01M | 163.73M | 140.56M | 62.66M | 113.87M |
| Revenue Growth % | -2.72% | 2% | 15.12% | 10.55% | 16.48% | 124.33% | -44.97% | - |
| Cost of Goods Sold | 194.54M | 193.07M | 186.46M | 156.4M | 136.12M | 112.42M | 62.2M | 37.55M |
| COGS % of Revenue | - | 90.84% | 89.48% | 86.4% | 83.14% | 79.98% | 99.26% | 32.97% |
| Gross Profit | 14.56M | 19.47M | 21.92M | 24.61M | 27.61M | 28.14M | 462K | 76.32M |
| Gross Margin % | 6.96% | 9.16% | 10.52% | 13.6% | 16.86% | 20.02% | 0.74% | 67.03% |
| Gross Profit Growth % | - | -11.18% | -10.92% | -10.85% | -1.9% | 5991.34% | -99.39% | - |
| Operating Expenses | 30.71M | 26.09M | 21.45M | 16.52M | 15.26M | 11.46M | 8.91M | 69.03M |
| OpEx % of Revenue | - | 12.28% | 10.29% | 9.13% | 9.32% | 8.15% | 14.21% | 60.63% |
| Selling, General & Admin | 28.78M | 25.93M | 21.33M | 15.26M | 12.88M | 9.15M | 7.47M | 52.46M |
| SG&A % of Revenue | - | 12.2% | 10.23% | 8.43% | 7.87% | 6.51% | 11.92% | 46.07% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 1.08M | 158K | 122K | 1.26M | 2.37M | 2.31M | 1.44M | 75.84K |
| Operating Income | -16.14M | -6.62M | 476K | 8.09M | 12.35M | 16.68M | -8.44M | 7.29M |
| Operating Margin % | -7.72% | -3.11% | 0.23% | 4.47% | 7.54% | 11.87% | -13.48% | 6.4% |
| Operating Income Growth % | - | -1490.76% | -94.12% | -34.5% | -25.97% | 297.6% | -215.82% | - |
| EBITDA | -1.76M | 8.89M | 14.15M | 17.62M | 19.27M | 21.05M | -3.9M | 11.42M |
| EBITDA Margin % | -0.84% | 4.19% | 6.79% | 9.74% | 11.77% | 14.97% | -6.23% | 10.03% |
| EBITDA Growth % | -113.96% | -37.12% | -19.73% | -8.56% | -8.43% | 639.14% | -134.19% | - |
| D&A (Non-Cash Add-back) | 14.39M | 15.52M | 13.67M | 9.53M | 6.92M | 4.36M | 4.54M | 4.13M |
| EBIT | -24.23M | -19.5M | 5.29M | 12.07M | 12.55M | 53.51M | -8.25M | 7.96M |
| Net Interest Income | -519K | -232K | 829K | 347K | -638K | -412K | -653K | -855.14K |
| Interest Income | 503K | 568K | 1.23M | 964K | 179K | 256K | 69K | 0 |
| Interest Expense | 1.02M | 800K | 399K | 617K | 817K | 668K | 722K | 855.14K |
| Other Income/Expense | -8.96M | -13.69M | 4.41M | 3.37M | -620K | 36.16M | -526K | -186.73K |
| Pretax Income | -25.1M | -20.3M | 4.89M | 11.46M | 11.73M | 52.84M | -8.97M | 7.1M |
| Pretax Margin % | -12% | -9.55% | 2.35% | 6.33% | 7.17% | 37.6% | -14.32% | 6.24% |
| Income Tax | -488K | -930K | 357K | 21K | 0 | 0 | 0 | 0 |
| Effective Tax Rate % | 1.94% | 4.58% | 7.3% | 0.18% | 0% | 0% | 0% | 0% |
| Net Income | -3.89M | -3.03M | 592K | 8.41M | 10.28M | 49.86M | -9.27M | 7.03M |
| Net Margin % | -1.86% | -1.42% | 0.28% | 4.64% | 6.28% | 35.47% | -14.8% | 6.18% |
| Net Income Growth % | -1817.24% | -611.15% | -92.96% | -18.24% | -79.38% | 637.62% | -231.85% | - |
| Net Income (Continuing) | -24.61M | -19.38M | 4.53M | 11.43M | 11.73M | 52.84M | -8.97M | 7.1M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 7.95M | 13.98M | 31.39M | 28.55M | 3.25M | 1.8M | 863K | 859.57K |
| EPS (Diluted) | -0.73 | -0.59 | 0.13 | 0.08 | 2.86 | 13.85 | 0.06 | 1.95 |
| EPS Growth % | -2369.67% | -553.85% | 62.5% | -97.2% | -79.35% | 22166.88% | -96.81% | - |
| EPS (Basic) | - | -0.59 | 0.13 | 0.08 | 2.86 | 13.85 | 0.06 | 1.95 |
| Diluted Shares Outstanding | 5.33M | 5.16M | 4.67M | 4.23M | 3.6M | 3.6M | 3.6M | 3.6M |
| Basic Shares Outstanding | 5.33M | 5.16M | 4.67M | 4.23M | 3.6M | 3.6M | 3.6M | 3.6M |
| Dividend Payout Ratio | - | - | 142.74% | 314.88% | 283.87% | - | - | 136.63% |
Negative operating margin expansion
As reported in recent financial filings, GENK's revenue growth has decelerated significantly, shifting from double-digit gains in early 2024 to a contraction of 6.0% in 2026Q1, suggesting that the company's aggressive footprint expansion is failing to offset weakening demand in its core California-centric market.
The transition from growth to contraction indicates that the company's AYCE model may be hitting a saturation point or experiencing reduced discretionary spending from its target demographic. Investors should monitor whether this trend reflects a permanent loss of pricing power or merely a temporary lull in new store productivity.
Based on the provided income statement data, GENK's gross margin has deteriorated from a peak of 13.7% in 2025Q3 to a negative 0.6% in 2026Q1, highlighting an inability to effectively manage protein costs within the fixed-price all-you-can-eat service model during inflationary periods.
The collapse into negative gross margins suggests that the cost of goods sold is no longer being adequately covered by menu pricing, likely due to rising wholesale protein costs. This structural weakness implies that the company lacks the necessary procurement leverage to protect its bottom line from commodity price volatility.
According to the company's quarterly income statements, operating margins have remained consistently negative for most of the last ten quarters, reaching a low of -13.4% in 2026Q1, which suggests that corporate overhead and store-level expenses are scaling faster than the company's ability to generate revenue.
The failure to achieve positive operating leverage despite significant revenue scale indicates that the current business model is not yet self-sustaining. The persistent negative operating income warrants further investigation into whether the company's G&A structure is bloated or if the unit-level economics are fundamentally flawed.
Analysis of the income statement reveals that SG&A expenses have trended upward to $6.9M in 2026Q1, representing a significant burden that, when combined with high COGS, has pushed the company into a net loss position, as noted in the most recent quarterly financial disclosures.
The inability to control SG&A costs while revenue growth stalls suggests a lack of expense discipline during a critical expansion phase. This cost structure appears to be a major drag on profitability, and investors should monitor whether management can implement meaningful cost-cutting measures to stabilize the bottom line.
As indicated by the financial data, the company's reliance on debt to fund expansion, coupled with a minimal cash balance of $2.8M, suggests that the current growth trajectory may be unsustainable without further dilutive financing or a rapid improvement in operational cash flow generation.
Short-sellers would likely focus on the company's inability to turn a consistent profit despite its scale, viewing the negative margins as a sign of a broken business model. The high debt-to-equity ratio further complicates the outlook, as rising interest expenses could exacerbate the existing liquidity constraints.
Quick answers to the most common questions about buying GENK stock.
For fiscal year 2025, GEN Restaurant Group, Inc. (GENK) reported total revenue of $212.5M. This represents a 86.7% increase compared to $113.9M in 2019.
GEN Restaurant Group, Inc. (GENK) reported a net loss of $3.0M for the fiscal year ending 2025.
GEN Restaurant Group, Inc. (GENK) reported an operating income of $-6.6M, resulting in an operating profit margin of -3.1%. This margin reflects the operational efficiency of the business before interest and taxes.
GEN Restaurant Group, Inc. (GENK) generated $19.5M in gross profit for the year, representing a gross profit margin of 9.2%. This demonstrates the company's core pricing power and production efficiency.