Q3 2025 GEN Restaurant Group Inc Earnings Call

Speaker #3: Good afternoon , ladies and gentlemen , and welcome to GEN Restaurant Group, Inc. , Inc. . Three Q 2025 Earnings Call . At this time , all lines are in .

Speaker #3: Listen only mode . Following the presentation , we will conduct a question and answer session . If at any time during this call , you require immediate assistance , please press star zero for the operator .

Speaker #3: And now I would like to turn the conference over to Mr. Tom Krull, the company's Chief Financial Officer.

Speaker #4: Thank you . Operator , and good afternoon . By now , everyone should have access to our third quarter 2020 earnings release . If not , it can be found at .

Speaker #4: In the Investor Relations section . Before we begin our formal remarks , I need to remind everyone that our discussions today will include forward looking statements within the meaning of federal securities laws , including , but not limited to , statements regarding growth plans and potential new store openings , as well as those types of statements identified in our quarterly Report on Form 10-q for period ended September 30th , 2025 , and our subsequent reports filed with the SEC .

Speaker #4: These forward looking statements are not guarantees of future performance and therefore you should not put undue reliance on them . These statements represent our views only as of the date of this call , and are also subject to numerous risks and uncertainties that could cause actual results to materially differ from what we currently expect .

Speaker #4: We refer you to our recent SEC filings, including our annual report on Form 10-K and our quarterly reports on Form 10-Q, for a more detailed discussion of the risks that could impact our future operating results and financial condition.

Speaker #4: Except as required by law, we undertake no obligation to update or revise these forward-looking statements in light of new information or future events.

Speaker #4: During today's call, we will discuss some non-GAAP financial measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Speaker #4: Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are available in our earnings press release and our SEC filings, which are available in the Investor Relations section of our website.

Speaker #4: Now, I'd like to turn it over to our Chairman and CEO, David Kim.

Speaker #5: Thank you , Tom , and good afternoon , everyone . The third quarter continued to be a very challenging environment for the restaurant business .

Speaker #5: In spite of this , we continue to implement our business plan , including opening new stores , continuing to deliver an exceptional service and build our brand recognition .

Speaker #5: Although macro pressures continue to persist , we strongly believe our value focused experimental dining model resonates with guests and positions us for durable , long term growth and profitability .

Speaker #5: We opened 15 restaurants in the first nine months of 2025, eight of which opened in the third quarter. This includes six new restaurants in South Korea, for a total of 57 restaurants in operation.

Speaker #5: The Korean restaurants use and operational model consistent to our restaurants in the US at a fraction of the construction and operational costs . These 2025 openings represent a balanced geographic mix , including new , existing and international markets , and we are scheduled to open an additional two stores by the end of 2025 .

Speaker #5: We have exceeded our initial estimate of 12 to 13 stores , for a total of 17 stores in 2025 . Recently , we announced the launch of Ready to Cook Korean branded meats for sale at Albertsons , Vons and Pavilion grocery stores in California and Hawaii .

Speaker #5: These products feature the exact same meats and recipes used in our restaurants, bringing the true restaurant experience without compromising quality. Most other restaurant companies that sell food in the frozen section of grocery stores cannot replicate the same taste and quality of food, like Jen can.

Speaker #5: These are not TV dinners, but are the same crafted meals and quality ingredients we serve in our restaurants, bringing our genuine quality restaurant food to your dining room table.

Speaker #5: With four product choices of ready to cook meats , we recently announced partnerships to sell at over 600 grocery locations . We took this challenge because we anticipate annual revenues from grocery store could exceed $100 million over the next 4 to 5 years .

Speaker #5: This allows for the expansion of our brand awareness, as Jen is building a powerful ecosystem that extends beyond restaurants into a community of authentic Korean products, experiences, and digital innovation.

Speaker #5: During the third quarter , we generated a 2.7% year over year increase . In total revenue to $50.4 million for the third quarter of 2025 , due to our new restaurant openings .

Speaker #5: Over the last year , as we reported last quarter , during the month of April , after global terrorists were announced , we have continued to see a downturn in our restaurant customer traffic , which resulted in same store sales dropping by 9.9% for the third quarter .

Speaker #5: And some of our peers are experiencing the same downturn . In spite of the inflationary driven increase in cost , our restaurant level adjusted EBITDA margin was 15% in the third quarter of 2025 , and 15.6% year to date .

Speaker #5: Consistent with our previous messaging, same store sales are not the metrics that define our success. I can't stress that enough. Our revenue is $5.2 million per restaurant in the casual dining space.

Speaker #5: This is a very elite level. Our AUV revenue levels drive our margins and strong cash flow. Our business model revolves around growing our footprint to capitalize on the short duration to recoup our initial investment in new restaurants.

Speaker #5: Since our IPO two years ago, we have added 24 new stores with total costs of approximately $2.5 million each, roughly increasing our store count by 73%.

Speaker #5: We believe this proves the value of our high free cash flow model. Although the restaurant industry is facing a software environment, we remain confident in our strategy.

Speaker #5: Our team and our ability to drive long-term growth. Having said this, we still deeply focus on ways to drive growth at existing locations and have a number of initiatives to share as we continue the expansion of the Jen brand of products and services.

Speaker #5: Last year , we announced the launch of Jen gift Cards at 95 Costco locations , all within five mile radius of all of our current restaurant across the US .

Speaker #5: The gift cards continue to sell exceptionally well. Recently, we began selling gift cards at 92 Sam's Club locations. Our success in expanding this initiative is a testament to Jen's brand strength and position as a leader in Korean barbecue.

Speaker #5: We're also expanding our reach beyond our restaurants through several exciting initiatives . These include bulk sales of Korean BBQ meats , e-commerce business growth , sales of Korean beef jerky , sales of Korean soldiers developed in Korea and imported to the US , and sales of our proprietary Korean and other Korean related gene products under development .

Speaker #5: All of these products will be sold at our restaurants and/or through our distribution channels. Ultimately, we anticipate that most of these items will also soon be available in grocery stores.

Speaker #5: Each of these initiatives are created to build off of Jen's powerful brand recognition and enhance our margins through new revenue streams . With a solid operating model , meaningful expansion across both core and new concepts , and continued investment in our development pipeline , we're executing with focus and discipline .

Speaker #5: Now, I'd like to hand the call over to Tom for a detailed look at our third quarter financial performance.

Speaker #4: Thank you . David . David discussed revenue in his remarks , so I will start with expenses . Cost of goods sold as a percentage of company restaurant sales increased by 334 basis points to 34.8% in the third quarter of 2025 , compared to the third quarter last year .

Speaker #4: Cost of goods sold as a percentage of restaurant sales increased by 95 basis points compared to the second quarter of 2025. The increase reflects inflationary cost increases, more new restaurants in operation, and a minor impact from our premium menu.

Speaker #4: We have not taken any price increases since the end of 2024, and meat prices are at an all-time high. We have elected not to pass on these increases to our customers and will not raise our prices in the near term to show loyalty to our customers during these uncertain economic times.

Speaker #4: Payroll and benefits as a percentage of company restaurant sales decreased by 196 basis points in the third quarter of 2025 to 28.5%, compared to the third quarter of last year.

Speaker #4: Payroll and benefits as a percentage of sales decreased by 155 basis points from the second quarter of 2025. This decrease is due to recently rolled out labor efficiencies.

Speaker #4: Occupancy expenses as a percentage of company restaurant sales increased by 238 basis points to 10.8% compared to the third quarter of last year.

Speaker #4: Due to the opening of 16 additional restaurants, our performance has been impacted primarily by higher rent at our new locations, along with the startup costs of several restaurants.

Speaker #4: Other operating expenses, as a percentage of company restaurant sales, increased 58 basis points to 12.2% compared to the third quarter of last year.

Speaker #4: Gonna stock based compensation during the third quarter was 5.7 million , or 11.4% of revenue , compared to 4.5 million , or 9.1% of revenue in the year ago period .

Speaker #4: This increase is primarily due to increased personnel required for new restaurant development and additional advertising, marketing, and legal expenditures. G&A expenses in the third quarter remained flat compared to G&A expenses in the first and second quarters of 2025.

Speaker #4: In the third quarter, we had a net loss before income taxes of $3.9 million, which equated to $0.11 per diluted share of Class A common stock, compared to net income before income taxes of $300,000, which equated to $0.01 per diluted share of Class A common stock.

Speaker #4: In the third quarter of 2024, the third quarter of 2025 reflects higher costs associated with new restaurant development, including $2.3 million in pre-opening costs.

Speaker #4: If you look at adjusted net income , a non-GAAP measure , we had a net loss of 700,000 , or $0.02 per diluted share of class A common stock in the third quarter of 2025 , compared to adjusted net income of 2.6 million , or $0.07 per share , in the third quarter of last year .

Speaker #4: As David said, since going public in June of 2023, we have grown from 33 stores to 57. The 73% increase, if we stopped all new restaurant development, could have resulted in a net income or loss that may have been profitable for the third quarter.

Speaker #4: This figure strips out all pre-opening costs and includes a reduction in G&A restaurant level adjusted EBITDA for the third quarter of 2025 was 7.6 million , or 15% of total revenue , compared to 9 million , or 18.2% , in the third quarter of 2020 .

Speaker #4: Total adjusted EBITDA for the third quarter of 2025 was $200,000, as compared to $3.4 million in the third quarter of 2020.

Speaker #4: After removing pre-opening costs from both periods, adjusted EBITDA for the third quarter of 2025 was $1.8 million, compared to $4.5 million in the third quarter of 2020.

Speaker #4: For . Turning to our liquidity position , as of September 30th , 2025 , we had approximately 5 million in cash and cash equivalents .

Speaker #4: Additionally, we have full availability of our $20 million revolving credit facility. We anticipate using a portion of our revolving credit facility as we continue to open new restaurants in the future.

Speaker #4: If the current economic climate does not turn around in the near term, we will consider slowing our growth plans for 2026 and focus our efforts on improving operations and margins at our existing restaurants.

Speaker #4: And growth through our grocery store initiatives. Before concluding, I want to reiterate what we said on our last call. Our balance sheet reflects $165 million in lease liabilities as required under GAAP through the new ASC 842 lease accounting standard.

Speaker #4: These are not financial obligations in the form of long term debt , but rather the accounting recognition of our future lease commitments . Importantly , they are offset by 140 million in operating lease assets .

Speaker #4: We've also received questions about our return on tangible asset metrics. It's important to note that using total assets as a proxy for invested capital is inflated because it includes the operating lease asset of $140 million.

Speaker #4: This incorrect assumption can artificially lower our return metrics . To wrap up , we anticipate opening two stores by the end of the year for a total of 17 new restaurants for all of 2025 , which includes our six international units in South Korea we're targeting full year revenue of 220 to 225 million and achieving .

Speaker #4: Restaurant-level adjusted EBITDA margins are projected to be in the 15% to 15.5% range by the end of 2025. We anticipate achieving an annual run rate of approximately $250 million in revenue when all our new restaurants are open.

Speaker #4: This does not include our new initiatives. This concludes our prepared remarks. We'd like to thank you again for joining us on our call today.

Speaker #4: And we are now happy to answer any questions that you may have. Operator, please open the line for questions.

Speaker #3: Thank you . Ladies and gentlemen , we will now begin the question and answer session . Should you have a question , please press the star followed by the one on your telephone keypad .

Speaker #3: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star, followed by the two.

Speaker #3: If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Jeremy Hamblin of Craig-Hallum.

Speaker #3: Please proceed .

Speaker #6: Thanks for taking the questions . I thought I might start by getting an understanding of the Korean units . And first wanted to clarify , you know , in terms of , I think some of those locations are , you know , con sushi and some are gen Korean .

Speaker #6: I don't know if some of them are kind of joint locations and , you know , just want to understand what the , the economics look like , you know , what do you what do you anticipate the AUVs to be with those stores in year one ?

Speaker #6: And, you know, what's the cost to build those locations?

Speaker #5: So we have right now for gens and two cons. The cons are currently outpacing the sales of gens at this point. We anticipate the cons to do around, I would say, $3 million to $4 million, maybe more in the $4 million range.

Speaker #5: The gen side is is still needs more time . So we're probably going to do about 2 to 3 million . The gens .

Speaker #5: What was the second question, Jeremy? I apologize.

Speaker #6: Just a cost. The cost to build.

Speaker #7: Yeah . The cost . Yeah . The cost of build is coming out to be about lower than a million . A store that's about 800,000 .

Speaker #7: So, it's substantially lower than the U.S.

Speaker #6: Got it . And then in terms of the , you know , the softer trends on existing locations , it can we assume that that's kind of continued here in Q4 ?

Speaker #6: I mean , you know , are you kind of expecting down , you know , ten or something like that in Q4 ?

Speaker #7: Correct . Yes .

Speaker #5: Right now we're seeing softness . It started from the tariff days to the ice crackdown , especially in areas where we have our customer , our lot Hispanic , and they have been impacted for sure in the California region .

Speaker #5: And we're starting to see some in the Texas , but mostly California and it's just an assumption that and of course , we're we're not just comparing to other sit downs .

Speaker #5: There are actually sit down restaurants that are doing well , but a lot of them are struggling with the comp sales . We have not seen as of last week , substantial improvement on the traffic .

Speaker #6: Got it . And then I wanted to switch gears just to ask about the , you know , the grocery store initiative , you know , 600 locations .

Speaker #6: That's kind of an impressive ramp . What is the current run rate on on , you know , kind of annualized revenue of that portion of the business ?

Speaker #6: I mean , getting to 100 million in 4 to 5 years would be , you know , quite impressive , but , you know , wanted to get an understanding of of the velocity there .

Speaker #6: And then also in terms of , you know , the , the cost to run that business , right ? You know , I don't know if you're having to pay slotting fees or , you know , kind of what is the , you know , the , the start up cost of , of that initiative .

Speaker #4: Okay .

Speaker #5: We did a test with 31 locations by the by the name of pavilions . They're they're in our data show that they're much less traffic than the other brands .

Speaker #5: They own. Why we were able to get the first orders and get bin spaces, etc., is the response that they've gotten in the 31 tests.

Speaker #5: Locations: Was anywhere from 50% or more of the consumers that were buying the products already new gen or Gen customers? So, it really helped us solidify the strength of our brand.

Speaker #5: The buying department has mandates in grocery stores. Now that they want to take more direction in merchandising, Asian foods and Hispanic foods.

Speaker #5: And we happen to fall in in that category . And because of the strong brand presence and the strong customer acceptance of our brand , the 31 store store data came in high in terms of new products going into their shelves without any discounting .

Speaker #5: And how we were able to go into the 570 stores is the other brands that they own , which is a higher traffic brand like Albertsons and Safeway , is where we think that the that the sales of those stores will be a much higher than the pavilions brand .

Speaker #5: The velocity we've just gotten into the pavilions for less than a month and a half, and the 570 stores will go into the month of November.

Speaker #5: They normally don't slot products during these times because they're focused on the holiday season, but for some reason, they saw such a popularity of our brand.

Speaker #5: They made concessions and did a last minute . A last minute adjustments . But but most retailers don't do that . They're locked in till I think , February .

Speaker #5: And that's when they do their schematics again. So we don't have the velocity. But what they're telling us on the 31 locations is, as a brand new brand, they're very happy with how we are selling down our products.

Speaker #5: The cost to manage this is substantially, substantially less than the cost of running the restaurant division. There is going to be margin.

Speaker #5: Erosions will happen once they start approaching us , which they have had discussions with us on shelf space and discounts and etc. they did say that in the history of their corporation , it was the first time they allowed their brand to come in without committing to a slotting fee .

Speaker #5: In Southern California , Northern California and Hawaii . They we have negotiated a very small slotting fees , but that's just being worked out .

Speaker #5: But the products are all made and already in their warehouses. There are another 300 stores in the Midwest, from Texas on, with the same company.

Speaker #5: I think that is going to be between 300 to 400. They'll probably put us in there, but they're telling us certain areas in the Midwest margins are not that better than the West Coast.

Speaker #5: We are now . We have appointments to discuss with the big boxes in about two weeks , because we have had very high successes with our gift card program , and they want to now see what kind of products that they can enhance with the gift card .

Speaker #5: And cross-work, so that customers who buy our gift cards can be introduced to our other branded meat products, and etc.

Speaker #6: Awesome . Thanks for the color . Last one for me , I was very interested to hear a bit more about the , you know , the idea of of of slowing or halting unit growth going forward .

Speaker #6: That seems , you know , certainly from a cash perspective , like a great idea . And I wanted to see if you and Tom had had really , you know , kind of gone through , you know , what the cash flow might look like .

Speaker #6: I mean , you have about , you know , 9 or $10 million in pre-opening costs this year . You know , and CapEx , I think tracking in the range of , you know , close to $30 million .

Speaker #6: So wanted to just get a sense of , you know , how much you've explored that , that that might , you know , given kind of some ambitious growth here that you've had in , you know , the existing stores performance ?

Speaker #6: It seems like that might be a , you know , an interesting path here , you know , from a perspective of generating , you know , a lot more cash flow .

Speaker #5: Yes, we definitely have run that number. We have seven under construction, and 2 or 3 will come on board this year.

Speaker #5: By the end of this year . And we cannot stop those . The other ones can pause . We have another 11 because these these locations you have to be at least a year ahead of signing leases .

Speaker #5: So we will see how the year-end sales progress, and we'll watch it very carefully. If we can maintain the year's numbers, we will continue.

Speaker #5: If we think that the slowdown of the consumers on the restaurant sector gets a little behind and continues to slow , yes , we will for sure consider pausing the the opening of new restaurants and we all we have looked at all the financial numbers and the projections .

Speaker #4: In detail right .

Speaker #6: Great. Thanks. Thanks for taking the question.

Speaker #4: Thank you, Jeremy. Thank you.

Speaker #5: You .

Speaker #3: The next question comes from Todd Brooks of Benchmark. Please proceed.

Speaker #8: Hey. Good afternoon, guys. How are you doing?

Speaker #4: Hi, Todd. Good.

Speaker #8: A couple of follow-ups to Jeremy's questions, and I've got a few others. I just wanted to clarify. You talked about the industry seeming to experience a continuing deceleration here.

Speaker #8: Going into the fourth quarter , but I think , David , if I heard your comment right , quarter to date trends have stabilized with the 10% that you saw in the third quarter or have your trends also slowed a little bit from that trend that you put up for the full third quarter ?

Speaker #5: Some weeks are better , some weeks are worse . So I we're just into it now . I need a little more data .

Speaker #5: The true number actually for us starts in the second week of November because now we're going into the very high season for Thanksgiving.

Speaker #5: And Christmas. Those are critical months for us, so I don't have that number for you right now.

Speaker #8: Okay. Fair enough. Following up on the packaged food products, when you frame up a $100 million opportunity per year as you get 4 or 5 years into the effort, what assumptions do you put behind $100 million in revenues for four SKUs?

Speaker #8: Expands to a multiple of that number of SKUs. 600 doors expands to what number of doors? What does it take from an operation and offering in a number of doors to generate $100 million in annual revenue?

Speaker #5: There is a competitor that moves Korean barbecue, frozen products through the Trader Joe's network, and we have certain numbers that they have.

Speaker #5: And and those Trader Joe's do more volume per store , but they have much less stores and we looked at the initial one month of .

Speaker #5: Pavilions, and we are going to be putting in more products. We are already talking to the supermarkets to bring in GEN-branded products.

Speaker #5: Other than just the meats, it's all being worked on now as they come on. We will announce it. So, there will be more SKUs other than just the four SKUs.

Speaker #5: And as those grow, because we are getting information from our buyers about what they want, because what they have now is costing them more money and is of less quality.

Speaker #5: And they have their internal numbers of products that they currently sell. So when you start putting those numbers together with more SKUs, we can kind of formulate that number.

Speaker #5: So as the years go , as at least the first cycle of year with new SKUs coming on board and knowing some numbers with companies like what was the other one , the big I'm sorry , I just blanked out Trader Joe's .

Speaker #5: I, we, we kind of am able to formulate a number that we can achieve.

Speaker #8: That's exciting . Good to hear it . A few more from me . If we have the time , the labor efficiency was very impressive in the quarter , especially given how much the traffic trends fell off and where sales came in relative to probably what was an original expectation .

Speaker #8: How do you generate 200 basis points of efficiency year over year?

Speaker #5: I think we can generate more. I don't want to use loose words by saying "AI," "technology," and things like that, but we are actually deploying those right now.

Speaker #5: But there's going to be a certain point where I cannot run a store with no humans, right? So we're constantly deploying more technologies.

Speaker #5: So we can be more efficient. But there will be a certain line because we are going to drop off in service if we go too thin.

Speaker #5: I think there's a little more basis points to play with, but this is probably the extent of it. Short of us bringing Octopus Optimus from Tesla to serve customers.

Speaker #5: Okay .

Speaker #8: Okay . Fair enough . And then the six stores in South Korea , across the two brands . Is that your near term footprint for South Korea ?

Speaker #8: Thoughts on further growth there? What does it take to know if that warrants more capital, especially looking at the kind of multiple uses for the capital that you do have from an availability standpoint?

Speaker #5: We are going to study the Korean market , but we are very optimistic on the con side of the business . So therefore , if we do have restructure of the capital , then it would be more on the con expansion , which South Korea is very easy , faster and less expensive to build in that in that country .

Speaker #5: But as of now, we're just going to keep tweaking the operations to come up with a better EBITDA.

Speaker #8: Okay , great . And the final one for me , and I'll jump back in queue . David , on prior calls , you've spoken to the competitive environment and some of these maybe ankle biters that have followed very successful gen locations with their own kind of either mom and pop or maybe branded Korean offering .

Speaker #8: What do you see from activity from these competitors? How are they dealing with the slowing environment? And what is their pace of opening new stores?

Speaker #8: Is there any evidence of that slowing yet? So you'll see maybe less competitive intensity as you look out to 2026. Thanks.

Speaker #5: Yes , we hear information from our bankers . These are local community banks , minority local community banks . And yes , they say because they're borrowers of the SBA program who are our competitors ?

Speaker #5: Yes. They say that sales are substantially down, but it still has not stopped the entrepreneurs from wanting to achieve the same American dream as in January.

Speaker #5: And barbecue. So we are continuously having to deal with competitors, for sure.

Speaker #8: Okay, great. Thank you both.

Speaker #4: Thank you, Todd. Thank you.

Speaker #3: For your last question, we will hear from George Kelly of Rod Capital. Please proceed.

Speaker #4: Hey everyone. Thanks for.

Speaker #9: Taking my questions . Just a few more for you . Hey , David . Hey , Tom . Hi . First on your South Korean units , can you give a margin of for wall margin by brand ?

Speaker #5: I don't have that. We've probably been open for two and a half months. We had some changeover in senior management in a very short period of time.

Speaker #5: So we had to go in, send some people, some one executive in. Our margins are not good right now because we need to stabilize it.

Speaker #5: I don't have that data today, but on the next quarter call, I will have that data.

Speaker #9: Okay. Okay. And then I just wanted to follow up on one of the earlier questions about your expectations for openings next year.

Speaker #9: So I just want to make sure I had it right. There are seven under construction, and two to three of those are expected to open this year.

Speaker #9: That leaves 4 to 5 . Are those the the for sure . Openings next year . And then you mentioned an 11 number .

Speaker #9: I just didn't know kind of what the status is. Is it just those 11 that you might pause, or does it also include the 4 to 5 that are beyond this year?

Speaker #5: No . There's 4 to 5 beyond this year . So the six is locked . They're under construction . So I cannot stop that .

Speaker #5: But the next 11 are not under construction . Maybe 1 or 2 might come on board . But the rest we can we can put a pause if we wanted to .

Speaker #9: Okay . Okay . And then the premium menu , I forget if it was in the Q or in the press release . Sounds like there was a margin negative margin impact from that menu .

Speaker #9: Can you quantify that ? Did I read that right ? Like what have you seen from the premium menu . And also what is the current penetration of that that offering .

Speaker #5: The current penetration of the offering is about 4 to 5% because of how expensive the products that we serve are. I think that eroded about a percent in food cost.

Speaker #4: Yeah .

Speaker #9: So you're saying the impact from that 4% to 5% was a 1% impact on full-wall consolidated full-wall margin.

Speaker #5: On the food cost side.

Speaker #4: On the food cost, less than 1%. But approaching 1%, right.

Speaker #9: And do you plan to retain I mean , do you plan to to continue ? Does the math work or . I mean , are you comfortable ?

Speaker #5: No, we're not comfortable. We are working on another project. We think that our menu presentation needs an uplift and an update.

Speaker #5: We are working through it now. We have to be very careful when we roll it out, because if we roll it out during this busy season and we don't execute well, it might backfire.

Speaker #5: So, once the new menu comes out and we reorganize the presentation of it with different products, we will probably test it first before we roll it out throughout the country.

Speaker #9: And the new menu might or might not exclude the premium menu. Is that correct?

Speaker #5: No, it will include the premium menu in a different way. We have competitors right now that are offering a much better quality Wagyu meat, and we are right now thinking.

Speaker #5: If there are some thoughts and some discussions about it , if there if there's progress , we will test the higher meats . But we are definitely almost set to go forward with it .

Speaker #9: Okay, okay. And then, my last question for me is just on your 2025 cohort of U.S. openings. How would you characterize them?

Speaker #9: Are they opening , you know , just given the macro challenges like opening quite a bit slower than , than prior cohorts or any kind of geographic items you've noticed certain places are outperforming or underperforming , just any kind of background on your openings .

Speaker #5: The new markets , brand new markets that we have one stores are not performing as we are expected . We wanted to , but the other markets that we already in , we're doing well .

Speaker #9: Okay, okay. I appreciate the time. Thanks.

Speaker #4: Thank you. Thank you.

Speaker #3: At this time, this concludes our question and answer session. I would now like to turn the call back over to Mr. Kim for closing remarks.

Speaker #5: Thank you very much for your time today.

Speaker #4: Thank you all. I appreciate it.

Speaker #3: Ladies and gentlemen, this concludes today's conference. You may now disconnect your lines at this time. Thank you for your participation.