Gen Restaurant Group downgraded at Benchmark on ‘material strategic pivot’

As previously reported, Benchmark analyst Todd Brooks downgraded Gen Restaurant Group (GENK) to Hold from Buy with no price target The Group reported Q4 operating results that reflected both a revenue and profitability shortfall despite a better-than-feared same-store sales decline, the analyst tells investors. Management outlined “bold steps” to stabilize results, including entering a joint venture on five existing underperforming units, materially slowing future unit growth and in “the boldest step of all,” aggressively pursuing consumer packaged goods expansion. Given such a material strategic pivot, the firm is downgrading shares as it awaits proof that the company can truly scale a suite of CPG product offerings in retail outlets, the analyst tells investors.