Kura Sushi USA, Inc. KRUS reported third-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.

Following the results, the company’s shares moved down 4.2% in the after-hours trading session on Jul 9.

Q3 Earnings & Revenues

The company reported break-even earnings against the Zacks Consensus Estimate of a loss of 6 cents per share. In the year-ago quarter, the company had incurred an adjusted earnings per share of 16 cents.

Revenues of $63.1 million lagged the consensus mark of $64 million. In the prior-year quarter, the company reported revenues of $49.2 million. The year-over-year upside can be attributed to new store developments.

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

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

Comps Details

In the fiscal third quarter, comparable restaurant sales increased 0.6% year over year. In the year-ago quarter, the company reported comparable restaurant sales growth of 10.3% year over year.

Operating Highlights

In the fiscal third quarter, restaurant-level operating profit amounted to $12.6 million compared with $11.6 million in the prior-year quarter. Restaurant-level operating profit margin in the quarter came in at 20% compared with 23.5% in the year-ago period.

General and administrative expenses in the fiscal third quarter totaled $8.9 million compared with $7 million in the prior-year period. The increase was primarily due to professional fees, litigation accrual, compensation-related costs as well as travel costs.

Food and beverage costs (as a percentage of sales) came in at 29.2% compared with 30% in the prior-year quarter. This was due to a rise in menu prices and supply-chain initiatives.

Adjusted EBITDA in the fiscal third quarter amounted to $4.5 million compared with $5.1 million in the prior-year quarter.

Balance Sheet

As of May 31, 2024, cash and cash equivalents totaled $59.4 million compared with $69.7 million as of Aug 31, 2023.

Total stockholders’ equity as of May 31, 2024, was $166.4 million compared with $164.6 million as of Aug 31, 2023.

Store Developments

The company opened four new restaurants in Orlando, FL; Atlanta, GA; Scarsdale, NY; and Roseville, CA. KRUS expects to open 14 new restaurants in fiscal 2024.

Fiscal 2024 Outlook

For fiscal 2024, the company anticipates sales in the range of $235-$237 million compared with the previous projection of $243-$246 million. It expects general and administrative expenses (as a percentage of sales) between 14% and 14.5%.

Kura Sushi currently carries a Zacks Rank #5 (Strong Sell).