GICS Sector : Consumer Cyclical
Kura Sushi USA, Inc.operates technology-enabled Japanese restaurants in the United States.The company's restaurants provide Japanese cuisine through an engaging revolving sushi service model, which is known as Kura Experience'.
Kura Sushi USA, Inc. reported its fiscal first quarter 2026 earnings, with total sales of $73.5 million, representing a comparable sales growth of negative 2.5%. The company outperformed expectations, with a sequential improvement in sales at the end of the quarter that continued into November. Adjusted EBITDA was $2.4 million, compared to $3.6 million in the prior year quarter. The actual EPS came out at '-0.25266' relative to estimates at '-0.17'. Food and beverage costs as a percentage of sales were 29.9%, compared to 29% in the prior year quarter, due to tariffs on imported ingredients.
Publication Date: Jan -08
The company opened four new restaurants in the first quarter and currently has 10 restaurants under construction. Kura Sushi USA, Inc. expects to open 16 new units in fiscal 2026, maintaining an annual unit growth rate above 20%. The company plans to decouple its reservation system from its loyalty program to encourage more users and sees potential for increased reservations and sales growth. Management expects positive comps in Q2 2026, driven by improving trends in November and December.
Labor and related costs as a percentage of sales were 32.5%, compared to 32.9% in the prior year quarter. The company expects G&A expenses as a percentage of sales to be between 12-12.5% and full-year restaurant level operating profit margins to be approximately 18%. The company feels it has no further expectations to take price in fiscal 2026, and the flow-through from pricing taken in November is better than expected.
With a P/S Ratio of 2.31 and an EV/EBITDA of 75.35, the market seems to be pricing in a certain level of growth for Kura Sushi USA. Analysts estimate next year's revenue growth at 20.1%. Given the company's plans for expansion and its confidence in achieving flat to slightly positive comps for the full year, it's worth monitoring whether the company can meet these expectations. The company's long-term growth target of 100 units in the US remains unchanged, and its marketing efforts have been focused on social media and influencers, with a return on ad spend being exceptional.
The company discussed the competitive environment, noting that independent competitors may be absorbing 300-400 basis points of tariff pressure, potentially leading to more mom-and-pop closures. However, the company believes it can capture traffic due to its value offering, and its recent 3.5% pricing step-up has not deterred traffic and mix growth. Future planned promotions include Sanrio in February and Jujutsu Kaisen in March and April, which could drive sales and attract new customers.
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Kura Sushi USA, Inc. (KRUS) Q4 2025 Earnings Call Transcript
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Kura Sushi USA's 10.27% growth is driven by increasing popularity of technology-enabled dining experiences, rising demand for convenient and affordable Japanese cuisine, successful implementation of conveyor belt sushi concept, strategic expansion into new markets, and effective marketing strategies targeting health-conscious millennials and Gen Z consumers.
A variety of traditional and innovative sushi rolls, sashimi, and nigiri made with fresh, sustainable ingredients
Japanese-inspired hot dishes, including udon, ramen, and tempura, made with high-quality ingredients
A selection of Japanese beers, sake, and specialty drinks, including Ramune and Mugicha
Traditional Japanese-style desserts, such as mochi and manju, as well as unique fusion desserts
Customizable catering services for events and parties, featuring Kura Sushi's signature dishes
Kura Sushi USA, Inc. faces moderate threat from substitutes, as customers have alternative dining options such as other sushi restaurants and food delivery services.
Kura Sushi USA, Inc. has a high bargaining power of customers, as customers have many options and can easily switch to competitors, making it essential for the company to maintain high-quality products and services.
Kura Sushi USA, Inc. has a low bargaining power of suppliers, as the company has multiple suppliers for its ingredients and materials, reducing the dependence on a single supplier.
Kura Sushi USA, Inc. faces a moderate threat of new entrants, as entering the sushi restaurant market requires significant investment and expertise, but new entrants can still pose a threat to the company's market share.
Kura Sushi USA, Inc. operates in a highly competitive market, with many established players, making it essential for the company to differentiate itself through its unique revolving sushi bar concept and high-quality products.
| Value | |
|---|---|
| Debt Weight | 42.07% |
| Debt Cost | 3.95% |
| Equity Weight | 57.93% |
| Equity Cost | 13.88% |
| WACC | 9.70% |
| Leverage | 72.62% |
Value: 2.4
Growth: 6.0
Quality: 3.3
Yield: 0.0
Momentum: 9.5
Volatility: 3.7
1-Year Total Return ->
Value: 9.8
Growth: 6.4
Quality: 3.3
Yield: 0.0
Momentum: 1.5
Volatility: 2.0
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Value: 8.5
Growth: 5.0
Quality: 4.1
Yield: 0.0
Momentum: 1.0
Volatility: 3.7
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Value: 8.7
Growth: 5.2
Quality: 2.5
Yield: 0.0
Momentum: 0.0
Volatility: 3.0
1-Year Total Return ->
Value: 8.2
Growth: 1.4
Quality: 3.5
Yield: 0.0
Momentum: 3.5
Volatility: 1.7
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Value: 3.8
Growth: 6.3
Quality: 2.9
Yield: 0.0
Momentum: 1.0
Volatility: 2.3
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