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Kura Sushi USA Inc (KRUS) Q2 2025 Earnings Call Highlights: Expansion Amidst Challenges

In This Article:

  • Total Sales: $64.9 million, up from $57.3 million in the prior year period.

  • Comparable Sales Growth: Negative 5.3%.

  • Restaurant-Level Operating Profit Margin: 17.3%, down from 19.6% in the prior year.

  • Net Loss: $3.8 million or negative $0.31 per share, compared to a net loss of $1 million or negative $0.09 per share in the prior year quarter.

  • Adjusted Net Loss: $1.7 million or negative $0.14 per share, compared to $1 million or negative $0.09 per share in the prior year quarter.

  • Adjusted EBITDA: $2.7 million, compared to $2.9 million in the prior year quarter.

  • Cash and Cash Equivalents: $85.2 million with no debt.

  • New Restaurant Openings: 11 units opened to date, with another six under construction.

  • Food and Beverage Costs: 28.7% of sales, down from 29.6% in the prior year quarter.

  • Labor and Related Costs: 34.8% of sales, up from 33% in the prior year quarter.

  • Operating Loss: $4.6 million, compared to $1.7 million in the prior year quarter.

  • Guidance for Fiscal Year 2025: Total sales expected between $275 million and $279 million, with 14 new units to be opened.

Release Date: April 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Kura Sushi USA Inc (NASDAQ:KRUS) opened 11 new units to date with six more under construction, indicating strong expansion efforts.

  • The company has a robust IP collaboration pipeline for fiscal '26, with seven to eight planned collaborations, which is expected to drive sales.

  • Kura Sushi USA Inc (NASDAQ:KRUS) has no debt and holds $85.2 million in cash and cash equivalents, showcasing a strong financial position.

  • The reservation system, currently being tested, has been well-received and is expected to drive traffic once fully rolled out.

  • The company is maintaining a 20%+ unit growth rate, with plans to open 14 units in fiscal year 2025, indicating continued expansion.

Negative Points

  • Comparable sales growth was negative 5.3%, with a significant decline in traffic of 8.5%, indicating challenges in maintaining customer visits.

  • Labor costs increased by 180 basis points due to wage inflation and sales deleverage, impacting profit margins.

  • Restaurant-level operating profit margin decreased to 17.3% from 19.6% in the prior year, reflecting operational challenges.

  • The company faced a net loss of $3.8 million, or negative $0.31 per share, compared to a net loss of $1 million in the prior year quarter.

  • Uncertainty around tariffs and their potential impact on consumer confidence and supply chain costs poses a risk to future performance.