News

Kura Sushi USA, Inc. KRUS reported second-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The metrics increased on a year-over-year basis.

During the quarter, the company emphasized positive developments, including an enhancement of 190 basis points in general and administrative leverage (as a percentage of sales), 23% growth in adjusted EBITDA and advancements in IT collaboration. Additionally, KRUS announced a partnership with DoorDash and promptly rolled out the program.

Management underlined the success in raising guidance during the first and second quarter earning calls, reflecting a robust confidence in the company's future. With the opening of 10 new restaurants so far, along with positive trends in restaurant traffic, KRUS is optimistic and anticipates to meet its new unit guidance, resulting in an improved revenue forecast.

Following the results, the company’s shares moved up 7.7% during the after-hours trading session on Apr 4.

Q2 Earnings & Revenues

Kura Sushi USA, Inc. Price, Consensus and EPS Surprise

In the quarter under review, the company reported an adjusted loss per share of 9 cents, wider than the Zacks Consensus Estimate of a loss of 1 cent. In the year-ago quarter, the company had incurred an adjusted loss per share of 10 cents.

Quarterly revenues of $57.3 million beat the consensus mark by 1.1%. In the prior-year quarter, the company reported revenues of $43.9 million. The upside was backed by new store developments.

Comps Details

During the fiscal second quarter, comparable restaurant sales increased 3% year over year. In the year-ago quarter, the company reported comparable restaurant sales growth of 17.4% year over year.

Operating Highlights

During the fiscal second quarter, restaurant-level operating profit amounted to $11.2 million compared with $8.9 million reported in the prior-year quarter. Restaurant-level operating profit margin during the quarter came in at 19.6% compared with 20.3% reported in the year-ago period.

General and administrative expenses in the fiscal second quarter came in at $8.2 million compared with $7.1 million in the prior-year period. The upside was primarily driven by compensation-related costs, professional fees and travel costs.

During the quarter, food and beverage costs (as a percentage of sales) came in at 29.6% compared with 30.1% in the prior-year quarter. The downside can be attributed to a rise in menu prices and supply chain initiatives.

Adjusted EBITDA in the fiscal second quarter came in at $2.9 million compared with $2.3 million reported in the prior-year quarter.

Balance Sheet

As of Feb 29, 2024, cash and cash equivalents totaled $56.8 million compared with $69.7 million as of Aug 31, 2023.

Total stockholders’ equity as of Feb 29, 2024, totaled $165.3 million compared with $164.6 million as of Aug 31, 2023.

Store Developments

The company opened five new restaurants in Kansas City, MO; Skokie, IL; Columbus, OH; and Euless and Webster, TX, during the second quarter of fiscal 2024. Subsequent to the quarter, KRUS opened one new restaurant in Orlando, FL. In fiscal 2024, the company anticipates opening 13-14 new restaurants.

Fiscal 2024 Outlook

For fiscal 2024, the company anticipates sales in the range of $243-$246 million compared with the previous projection of $239-$244 million. It expects general and administrative expenses (as a percentage of sales) between 14% and 14.5%.

Zacks Rank & Other Top Picks

Kura Sushi currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the Zacks Retail-Wholesale sector include:

Brinker International, Inc. EAT carries a Zacks Rank #2 at present. The company has a trailing four-quarter earnings surprise of 212.7%, on average. Shares of EAT have jumped 25.9% in the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for EAT’s 2024 sales and earnings per share (EPS) indicates 4.9% and 30.7% growth, respectively, from the year-ago period’s levels.

Texas Roadhouse, Inc. TXRH carries a Zacks Rank #2 at present. It has a trailing four-quarter negative surprise of 3.9%, on average. The stock has soared 34.7% in the past year.

The Zacks Consensus Estimate for TXRH’s 2024 sales and EPS suggests 14% and 25.3% growth, respectively, from the year-ago period’s levels.

Shake Shack Inc. SHAK carries a Zacks Rank #2 at present. It has a trailing four-quarter earnings surprise of 92.6%, on average. SHAK’s shares have surged 81.9% in the past year.

The Zacks Consensus Estimate for SHAK’s 2024 sales and EPS indicates 14.6% and 91.9% growth, respectively, from the year-ago period’s levels.

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