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Kura Sushi USA (NASDAQ:KRUS) announced late on Thursday preliminary FQ3 unaudited results.
The restaurant company expects to report total sales are expected to be approximately $63.1 million. Comparable restaurant sales are expected to have increased approximately 0.6% for the quarter. Restaurant-level operating profit is expected to be approximately 20% of sales.
“The financial results of our fiscal third quarter did not meet our expectations, due largely to unanticipated softness in the California market,” highlighted CEO Hajime Uba. “While we believe that these sales pressures are transitory and consumer strength will normalize over time, we believe we have positioned the company to be able to deliver strong results regardless of the overall macro environment,” added Uba.
Roth MKM said it remained positive on Bur-rated Kura Sushi (KRUS) despite the disappointing pre-release and guidance update. The firm lowered its estimates for FY24 and FY25 on the continued California softness, but said it does not believe the growth outlook is broken. Analyst George Kelly noted that in over four years of coverage, the firm counted four 30% or greater down moves, always followed by new highs within less than six months. “We continue to see generally healthy underlying fundamentals, and we remain optimistic regarding the LT unit opportunity,” he added. Kelly also pointed to a healthy pipeline for Kura Sushi (KRUS), and said it is still tracking to +20% restaurant-level operating margin.
Shares of Kura Sushi USA were down 11.41% in premarket action to $72.99. The restaurant stock is down 33% from its 52-week high of $122.81.
