Kura Sushi (KRUS) Stock Trades Up, Here Is Why
What Happened:
Shares of sushi restaurant chain Kura Sushi (NASDAQ:KRUS) jumped 22.7% in the afternoon session after the company reported first quarter earnings results that blew past analysts' gross margin expectations. Revenue also came in slightly ahead of Consensus estimates. Looking ahead, full-year revenue guidance came in higher than Wall Street's estimates, partly due to the strong same-store sales growth posted during the quarter. Management highlighted an acceleration in sales momentum, and the business continued to add new restaurants to meet growing demand. On the other hand, its operating profit and EPS missed analysts' expectations. Overall, it was a strong quarter, demonstrating that the company is staying on target.
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What is the market telling us:
Kura Sushi's shares are very volatile and over the last year have had 31 moves greater than 5%. But moves this big are very rare even for Kura Sushi and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was about 2 months ago, when the stock dropped 16.3% on the news that the company reported third-quarter results with revenue falling short thanks to worse-than-expected same-store sales growth. Furthermore, its FY 2024 revenue guidance missed Wall Street's estimates. On the other hand, its adjusted EBITDA and EPS slightly topped analysts' expectations. Overall, this was a weak quarter for Kura Sushi, and investors were likely hoping for better guidance.
At $91.13 per share Kura Sushi is still trading 16.3% below its 52-week high of $108.92 from July 2023. Investors who bought $1,000 worth of Kura Sushi's shares at the IPO in July 2019 would now be looking at an investment worth $4,671.
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