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Kura Sushi (KRUS) Q1 Earnings and Revenues Miss Estimates

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Kura Sushi USA, Inc. (KRUS - Free Report) reported first-quarter fiscal 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.

During the quarter, management highlighted significant enhancements in restaurant-level operating profit margin and Adjusted EBITDA. Additionally, they unveiled six new units (so far), with an additional seven stores under construction. The company is focused on maintaining its operational standards, accelerating the expansion of its restaurants and optimizing its G&A in alignment with the expanding restaurant network to propel further growth.

Q1 Earnings & Revenues

In the quarter under review, the company reported an adjusted loss per share of 18 cents, wider than the Zacks Consensus Estimate of a loss of 11 cents. In the year-ago quarter, the company reported an adjusted loss per share of 21 cents.

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

 

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

Kura Sushi USA, Inc. price-consensus-eps-surprise-chart | Kura Sushi USA, Inc. Quote

 

Quarterly revenues of $51.5 million missed the consensus mark by 0.9%. In the prior-year quarter, the company reported revenues of $39.3 million. The upside was backed by traffic growth and new store developments.

Comps Details

During the fiscal first quarter, comparable restaurant sales increased 3.8% year over year. In the year-ago quarter, the company reported comparable restaurant sales growth of 6.9% year over year.

Operating Highlights

During the fiscal first quarter, restaurant-level operating profit amounted to $10.1 million compared with $7.2 million reported in the prior-year quarter. Restaurant-level operating profit margin during the quarter came in at 19.5% compared with 18.2% reported in the year-ago period.

General and administrative expenses in the fiscal first quarter came in at $8.6 million compared to $6.6 million in the prior-year period. The upside was primarily due to compensation-related costs, professional fees and travel costs.

During the quarter, food and beverage costs (as a percentage of sales) came in at 29.8% compared with 31.6% in the prior-year quarter. The downside is primarily due to a rise in menu prices, partially offset by food cost inflation.

Adjusted EBITDA in the fiscal first quarter came in at $1.8 million compared with $0.6 million reported in the prior-year quarter.

Balance Sheet

As of Nov 30, 2023, cash and cash equivalents totaled $64.2 million compared with $69.7 million as of Aug 31, 2023.

Total stockholders’ equity at the end of the fiscal first quarter totaled $163.7 million compared with $164.6 million at the end of fourth-quarter fiscal 2023.

Store Developments

The company opened four new restaurants in Pittsburgh, PA; Flushing, NY; Tampa, FL; and Naperville; IL, during the first quarter of fiscal 2024. Subsequent to the quarter, the company opened two new restaurants in Kansas City, MO and Skokie, IL. In the fiscal 2024, the company anticipates opening 12-14 new restaurants.

Fiscal 2024 Outlook

For the fiscal 2024, the company anticipates sales to be $239-$244 million. It expects general and administrative expenses (as a percentage of sales) to be approximately 14.5%.

Zacks Rank & Key Picks

Kura Sushi currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Retail-Wholesale sector include:

Arcos Dorados Holdings Inc. (ARCO - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 28.3% on average. Shares of ARCO have surged 46.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for ARCO’s 2024 sales and earnings per share (EPS) indicates 10.6% and 15.5% growth, respectively, from the year-ago period’s levels.

Wingstop Inc. (WING - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 28.9%, on average. The stock has gained 77.2% in the past year.

The Zacks Consensus Estimate for Wingstop’s 2024 sales and EPS suggests rises of 15.8% and 18.2%, respectively, from the year-ago period’s levels.

Brinker International, Inc. (EAT - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 223.6%, on average. Shares of EAT have increased 14.4% in the past year.

The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 5.1% and 26.2% growth, respectively, from the year-ago period’s levels.


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