Kura Sushi USA Inc (KRUS) Reports Increased Sales and Restaurant-Level Operating Profit in Q1 ...
Total Sales: Increased to $51.5 million in Q1 2024 from $39.3 million in Q1 2023.
Comparable Restaurant Sales: Grew by 3.8% in Q1 2024 compared to Q1 2023.
Operating Loss: Recorded an operating loss of $2.8 million in Q1 2024, slightly higher than the $2.2 million loss in Q1 2023.
Net Loss: Improved to $2.0 million, or $(0.18) per diluted share, from a net loss of $2.1 million, or $(0.21) per diluted share, year-over-year.
Restaurant-Level Operating Profit: Increased to $10.1 million, or 19.5% of sales, up from 18.2% in the prior year.
Adjusted EBITDA: Rose to $1.8 million from $0.6 million in Q1 2023.
New Restaurants: Opened four new locations in Q1 2024, with more under construction.
On January 4, 2024, Kura Sushi USA Inc (NASDAQ:KRUS) released its 8-K filing, detailing its financial results for the fiscal first quarter ended November 30, 2023. The company, known for its technology-enabled Japanese restaurant concept and revolving sushi service model, reported a significant increase in total sales, which reached $51.5 million, up from $39.3 million in the same quarter of the previous year. This growth reflects a 3.8% increase in comparable restaurant sales, indicating a positive response from customers to the dining experience offered by Kura Sushi USA.
Financial Performance and Challenges
Kura Sushi USA's financial performance in the first quarter of fiscal 2024 shows a mixed picture. While the company achieved a notable increase in sales and restaurant-level operating profit, it also reported an operating loss of $2.8 million, which is slightly higher than the $2.2 million loss from the first quarter of 2023. The net loss improved marginally to $2.0 million, or $(0.18) per diluted share, compared to a net loss of $2.1 million, or $(0.21) per diluted share, in the previous year. The company's ability to maintain an upward trajectory in sales while managing costs is crucial for its long-term financial health.
Despite these challenges, Kura Sushi USA's restaurant-level operating profit increased to $10.1 million, or 19.5% of sales, compared to $7.2 million, or 18.2% of sales, in the first quarter of 2023. Adjusted EBITDA also saw a significant rise to $1.8 million from $0.6 million in the prior year's quarter. These financial achievements are important as they demonstrate the company's ability to generate profit at the restaurant level, which is a key indicator of operational efficiency in the restaurant industry.
Key Financial Metrics and Commentary
Key metrics such as food and beverage costs as a percentage of sales decreased to 29.8% from 31.6% due to menu price increases, partially offset by food cost inflation. Labor and related costs remained consistent at 31.6% of sales. However, occupancy and related expenses increased to $3.9 million due to the opening of twelve new restaurants since the first quarter of 2023. General and administrative expenses also rose to $8.6 million, primarily due to compensation-related costs and professional fees.
Hajime Uba, President and CEO of Kura Sushi, expressed optimism about the company's direction, stating, "Fiscal 2024 is off to an exceptionally strong start, with meaningful improvements in restaurant-level operating profit margin and Adjusted EBITDA, as well as six new units opened to date with another seven under construction."
The company's focus on maintaining excellent operations, expanding its number of restaurants, and leveraging general and administrative expenses against a growing restaurant base is evident in its strategic approach.
Outlook and Expansion
For the full fiscal year of 2024, Kura Sushi USA anticipates total sales between $239 million and $244 million, with general and administrative expenses as a percentage of sales to be approximately 14.5%. The company plans to open 12 to 14 new restaurants, with average net capital expenditures per unit of about $2.5 million. This expansion strategy is indicative of the company's confidence in its business model and growth prospects.
Kura Sushi USA's performance in the first quarter of fiscal 2024 reflects its resilience and adaptability in a competitive market. With a clear strategic focus and a commitment to operational excellence, the company is well-positioned to navigate the challenges ahead and continue its growth trajectory.
For more detailed information about Kura Sushi USA Inc's financial results, please visit the company's website or refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Kura Sushi USA Inc for further details.
This article first appeared on GuruFocus.
