Kura Sushi USA(KRUS) - 2025 Q3 - Quarterly Results

Q3 2025 Financial Highlights Kura Sushi reported total sales of $74.0 million, a significant increase from the previous year, achieved a net income of $0.6 million, and opened three new restaurants, despite a 2.1% decrease in comparable restaurant sales Q3 2025 Key Performance Indicators (vs. Q3 2024) | Metric | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | | Total Sales | $74.0 million | $63.1 million | | Comparable Restaurant Sales | -2.1% | N/A | | Operating Loss | $0.2 million | $1.2 million | | Net Income (Loss) | $0.6 million | $(0.6) million | | Diluted EPS | $0.05 | $(0.05) | | Adjusted Net Income | $0.6 million | $4 thousand | | Restaurant-level Operating Profit* | $13.5 million | N/A | | Adjusted EBITDA* | $5.4 million | N/A | | New Restaurants Opened | 3 | N/A | - CEO Hajime Uba expressed satisfaction with the quarter's results, highlighting progress in the new reservation system, exploration of new market opportunities, and strategy for Bikkurapon collaborations to prepare for fiscal 2026[4] Detailed Financial Analysis (Q3 2025) The company's total sales grew due to new restaurant openings, though comparable sales declined, while the operating loss narrowed significantly and the company swung to a net profit, with improved food and beverage expenses as a percentage of sales, but increased labor costs Sales and Profitability Total sales increased by 17.3% to $74.0 million, primarily driven by the opening of thirteen new restaurants, partially offset by a 2.1% decrease in comparable restaurant sales, leading to a turnaround from a prior-year net loss to a net income of $0.6 million Q3 Sales and Profitability Comparison (in millions) | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Total Sales | $74.0 | $63.1 | +17.3% | | Comparable Restaurant Sales | -2.1% | N/A | N/A | | Operating Loss | $(0.2) | $(1.2) | +82.9% | | Net Income (Loss) | $0.6 | $(0.6) | Turnaround to Profit | - The 2.1% decrease in comparable restaurant sales was composed of a 2.9% decrease in traffic, partially offset by a 0.8% increase from price and product mix[5] Cost Structure Analysis Food and beverage costs improved to 28.3% of sales from 29.2% year-over-year, while labor costs rose to 33.1% of sales from 32.6%, and General and Administrative (G&A) expenses decreased to 11.8% of sales from 14.0% Cost as a Percentage of Sales | Cost Category | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | | Food and Beverage | 28.3% | 29.2% | | Labor and Related | 33.1% | 32.6% | | Other Costs | 14.7% | 14.1% | | General & Administrative | 11.8% | 14.0% | - The decrease in G&A expenses as a percentage of sales was primarily due to sales leverage and a reduction in professional fees and litigation expenses[9] - Occupancy expenses increased in absolute terms to $5.5 million from $4.3 million, driven by the opening of thirteen new restaurants since Q3 2024[7] Restaurant Development Kura Sushi continued its expansion by opening three new restaurants during the third quarter in Arizona, Washington, and Texas, with two additional restaurants opened subsequent to the quarter's end, bringing the total to 78 locations - Three new restaurants were opened during Q3 2025 in: - Scottsdale, Arizona - Lynnwood, Washington - McKinney, Texas[12] - Subsequent to the quarter end (May 31, 2025), two more restaurants were opened in The Woodlands, Texas and Salt Lake City, Utah[12] Fiscal Year 2025 Outlook The company updated its full-year guidance for fiscal 2025, projecting total sales of approximately $281 million, planning to open 15 new restaurants, and expecting general and administrative expenses to be below 13.0% of sales Updated FY 2025 Guidance | Metric | Guidance | | :--- | :--- | | Total Sales | Approx. $281 million | | New Restaurants | 15 (annual unit growth > 20%) | | Avg. Net Capex per Unit | Approx. $2.5 million | | G&A Expenses (% of Sales) | Below 13.0% (excl. legal settlements) | Financial Statements This section provides the detailed, unaudited financial statements for the third quarter and nine months ended May 31, 2025, including the income statement, selected balance sheet and operating data, and reconciliations of GAAP to non-GAAP measures Statements of Operations For the three months ended May 31, 2025, the company reported sales of $74.0 million and a net income of $0.6 million, or $0.05 per diluted share, a significant improvement from the same period in 2024, which saw sales of $63.1 million and a net loss of $0.6 million Consolidated Statements of Operations (in thousands, for Three Months Ended May 31) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Sales | $73,965 | $63,082 | | Total operating expenses | $74,127 | $64,251 | | Operating loss | $(162) | $(1,169) | | Income (loss) before income taxes | $620 | $(498) | | Net income (loss) | $565 | $(558) | | Diluted EPS | $0.05 | $(0.05) | Selected Balance Sheet and Operating Data As of May 31, 2025, the company held $47.1 million in cash and cash equivalents and had total assets of $419.4 million, with the total number of restaurants growing to 76, while restaurant-level operating profit margin was 18.2% and Adjusted EBITDA margin slightly increased to 7.3% Selected Balance Sheet Data (in thousands) | Account | May 31, 2025 | August 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $47,132 | $50,986 | | Total assets | $419,373 | $328,522 | | Total liabilities | $192,369 | $165,984 | | Total stockholders' equity | $227,004 | $162,538 | Selected Operating Data (for Three Months Ended May 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Restaurants at end of period | 76 | 63 | | Comparable restaurant sales | (2.1)% | 0.6% | | Adjusted EBITDA | $5,410 | $4,451 | | Restaurant-level operating profit | $13,492 | $12,604 | | Restaurant-level operating profit margin | 18.2% | 20.0% | Reconciliation of Non-GAAP Measures The company provides reconciliations for its non-GAAP metrics, showing Adjusted Net Income of $0.6 million, Adjusted EBITDA of $5.4 million, and Restaurant-level operating profit of $13.5 million for Q3 2025 Reconciliation to Adjusted EBITDA (Q3 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net income | $565 | | Interest income, net | $(782) | | Income tax expense | $55 | | Depreciation and amortization | $3,559 | | EBITDA | $3,397 | | Stock-based compensation | $1,293 | | Non-cash lease expense | $720 | | Litigation | $— | | Adjusted EBITDA | $5,410 | Reconciliation to Restaurant-level Operating Profit (Q3 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Operating loss | $(162) | | Add: Depreciation & amortization | $3,559 | | Add: Stock-based compensation | $1,293 | | Add: Pre-opening costs | $404 | | Add: Non-cash lease expense | $720 | | Add: General & administrative | $8,741 | | Less: Corp-level stock comp | $(1,063) | | Restaurant-level operating profit | $13,492 |