KRUS

Interested in Kura Sushi USA, Inc.? Here are five stocks we like better. Kura Sushi USA posted fiscal third-quarter sales of $85.9 million, with restaurant-level operating margin improving to 19.1% and adjusted EBITDA rising to $6.6 million despite a slight decline in comparable sales. Traffic weakened because of macro pressures and competition for consumer spending, but the company offset this with pricing, mix gains, and better labor efficiency. Food costs remained elevated due to tariffs, though management said cost control helped partially cushion the impact. The company still expects 16 new restaurant openings in fiscal 2026, but delays tied largely to fire inspections trimmed revenue by about six revenue months and led management to reduce its full-year sales outlook to $330.5 million-$331.5 million. Kura Sushi Stock Dips Into a Hot Buying Opportunity Kura Sushi USA (NASDAQ:KRUS) reported higher fiscal third-quarter sales and improved restaurant-level profitability despite negative comparable sales and continued pressure from tariffs on imported ingredients, executives said on the company’s earnings call. President and CEO Hajime Uba said the company made “significant progress” toward sustainable margin improvement and its goal of returning to historical 20% restaurant-level operating profit margins. Uba said cost of goods sold as a percentage of sales remained 200 basis points higher than a year earlier because of tariffs, but operating discipline more than offset that impact. → SK Hynix’s Nasdaq Listing Could Reset the AI Memory Trade Why Now Is the Perfect Time to Bite Into This Restaurant Stock Total sales for the fiscal third quarter were $85.9 million, up from $74 million in the prior-year period. Comparable restaurant sales declined 0.4%, reflecting a 5.1% decline in traffic that was partially offset by a 4.7% contribution from price and mix. Effective pricing in the quarter was 4.5%. Restaurant-level operating profit margin rose to 19.1% from 18.2% a year earlier. Adjusted EBITDA increased to $6.6 million from $5.4 million, while adjusted EBITDA margin improved 40 basis points to 7.7%. → 2 Short Squeezes for Summer Speculation: What the Bears Are Getting Wrong 3 Stocks That Look Like Chipotle in the Early Days Food and beverage costs were 30.2% of sales, compared with 28.3% in the prior-year quarter. Uba attributed the increase to tariffs on imported ingredients but said vendor negotiations and cost management helped produce a 20-basis-point sequential improvement from the second quarter. The company continues to expect full-year cost of goods sold to be approximately 30% of sales. Labor and related costs improved to 30.6% of sales from 33.1% a year earlier. Uba said the company had initially expected to lever labor costs by 100 basis points for the year but now expects improvement closer to 200 basis points. Benjamin Porten, SVP of Investor Relations and System Development, said labor gains were driven by the company’s reservation system, which reduced front-of-house headcount, and tighter scheduling practices. → How TeraWulf’s Anthropic Deal Booted Up a $19B AI Empire The company reported an operating loss of $39,000, compared with an operating loss of $162,000 in the prior-year quarter. Net income was $423,000, or $0.03 per share, compared with $565,000, or $0.05 per share, a year earlier. Kura Sushi ended the quarter with $66.1 million in cash, cash equivalents and investments, and no debt. Executives said weaker traffic reflected macroeconomic pressures, including elevated gas prices, particularly in California, as well as competition for consumer attention from the World Cup. Porten said traffic weakness was primarily a reduction in visit frequency rather than a meaningful difference between loyalty members and non-members. At the same time, the company said mix trends were stronger than expected. Porten said average check growth was faster among non-members than rewards members, which the company interprets as a possible sign that higher-spending customers are visiting Kura Sushi after seeing higher prices at competitors. Porten said the company’s pricing strategy has helped preserve its value proposition. He said Kura’s pricing has been lower than competitors’ increases, noting that the company is conducting an analysis of competitor pricing but can “speak anecdotally” that increases elsewhere are often closer to 20% versus Kura’s roughly 4%. Executives said customers are buying more per person, including more plates and higher drink attachment. Porten cited food-based promotions, including Kura Reserve offerings, as contributing to mix growth. The company said Kura Reserve promotions will increase from nine annually to 12 in fiscal 2027. Kura Sushi opened seven restaurants during the third quarter, in Orange, Union City, Temecula and San Diego, California; Goodyear, Arizona; Wellington, Florida; and Denton, Texas. After quarter end, it opened restaurants in Tulsa, Oklahoma; Sunset Valley, Texas; and Charlotte, North Carolina, bringing fiscal-year openings to date to 15. The company continues to expect 16 new restaurant openings for fiscal 2026, representing annual unit growth above 20%. However, executives said unexpected delays across several openings cost the company approximately six revenue months and affected revenue expectations. Porten said three of four recent delays were caused by fire inspections. He said typical corrections can often be completed in about two weeks, but the recent issues took an average of six weeks, with additional time required to schedule re-inspections. The company said it builds some delays into its planning, but the number and length of the recent delays were unusual. Kura Sushi now expects fiscal 2026 total sales between $330.5 million and $331.5 million. It continues to expect average net capital expenditure per new unit of approximately $2.5 million and G&A expense of approximately 12% of sales, excluding litigation expense. The company now expects full-year restaurant-level operating profit margin of approximately 18.5%. Uba said the company’s fiscal 2027 intellectual property collaboration pipeline is shaping up to be “one of our strongest ever.” Following the current Honkai: Star Rail collaboration, the company plans a collaboration with Atlus’ Persona. In September and October, Kura Sushi plans to partner with The Apothecary Diaries. In November and December, it plans its third collaboration with Nintendo, centered on Yoshi. Porten said typical intellectual property collaborations are expected to contribute low single digits to sales, while marquee collaborations such as Kirby or Yoshi are expected to contribute mid-single digits. The company also remains on track to launch an upgraded tiered rewards program in fiscal 2027. In addition, Uba said Kura Sushi is working on changes to its Bikkura Pon prize system that would allow guests to choose between a capsule prize and a free dessert voucher redeemable on a future visit. Porten said the change could improve guest satisfaction, encourage repeat visits and reduce prize production costs, potentially providing up to a 50-basis-point benefit once fully implemented. Executives said they remain optimistic about fiscal 2027, citing new market openings, more frequent intellectual property collaborations, the upgraded rewards program and additional cost initiatives, including robotic dishwashers and more in-house preventive maintenance work. Kura Sushi USA, Inc operates Japanese‐style revolving sushi restaurants across the United States. The company's concept centers on delivering a modern sushi dining experience by combining fresh ingredients with automated conveyer belt and plate‐return systems. Guests can choose from a broad menu that includes nigiri, sashimi, maki rolls, tempura, udon noodles and chef‐inspired seasonal dishes, all served directly from the conveyor belt or ordered on tabletop touchscreens. Each restaurant integrates patented technology to ensure food quality and operational efficiency. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Kura Sushi USA Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Image source: The Motley Fool. Tuesday, July 7, 2026 at 5:00 p.m. ET President and Chief Executive Officer - Hajime Uba SVP, Investor Relations and System Development - Benjamin Porten Operator: Good afternoon. Ladies and gentlemen. Thank you for standing by. Welcome to the Kura Sushi USA Incorporated Fiscal Third Quarter 26 Earnings Conference Call. At this time, participants have been placed in a listen-only mode. And the lines will be open for your questions following the presentation. Please note that this call is being recorded. On the line today, we have Hajime Uba, President and Chief Executive Officer and Benjamin Porten, SVP, Investor Relations and System Development, And now I would like to turn the call over to Mr. Porten. Benjamin Porten: Thank you, operator. Good afternoon, everyone, and thank you all for joining. By now, everyone should have access to our fiscal third quarter 26 earnings release. It can be found at www.kurosushi.com in the Investor Relations section. A copy of the earnings release is also being included in the 8-K submitted to the SEC. Before we begin our formal remarks, need to remind everyone that part of our discussions today will include forward-looking statements as defined under the Private Securities Litigation Reform Act of 2 thousand. These forward-looking statements are not guarantees of future performance. And therefore, you stop it under reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. We refer all of you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. Also during today's call, we will discuss certain non GAAP financial measures which we believe can be used when evaluating our performance. The presentation of this additional information should not be considered in isolation nor is the substitute for results for prepared in accordance with GAAP. And the reconciliations to comparable GAP measures are available in our earnings release. With that out of the way, like to turn the call over to Jimmy. Hajime Uba: Thanks, Ben, and thank you to everyone who is joining us on our call today. During our fiscal third quarter, we were able to make significant progress towards our goals of sustainable margin improvement and returning it to our historical 20% restaurant-level operating profit margins. Regardless of tariff relief. Despite our cost of goods sold as a percentage of sales, being 200 basis points higher than last year's due to tariffs. Operational efficiencies allowed us to more than offset this impact. And improve our restaurant level operating profit margin by 90 basis points over the prior year to 19.1%. We were also able to improve adjusted EBITDA margins by 40 basis points to 7.7% and grew our adjusted EBITDA dollars by more than 20% over the prior year. Our ability to improve profitability in a challenging environment speaks to what we do best. Responding rapidly to control what we can control. Total sales for the fiscal third quarter were $85.9 million representing comparable sales of negative 0.4%. Negative 5.1% of traffic. Offset by positive 4.7% in price and mix. Effective pricing for the quarter was 4.5%. During our last earnings call, we mentioned that mix being close to flat at negative 0.2% was the best flow through in pricing that we had ever seen. Mix actually saw further improvement in the third quarter with average check growth exceeding effective pricing. Pricing rolled off 1% as of June 1, which we offset with 1% of pricing on July 1. Making our effective pricing for fiscal third fiscal fourth quarter 4.2%. Cost of goods sold as a percentage of sales were 30.2%. As compared to 28.3% in the prior year quarter. Due to the impact of tariffs. While COGS remain meaningfully higher than historical levels, we are pleased with the progress of our vendor negotiations and cost management efforts, which resulted in A sequential improvement of 20 basis points over Q2. Our full year COX expectations as a percentage of sales remain approximately 30%. Labor as a percentage of sales improved by 250 basis points to 30.6%, due to operational initiatives. At the beginning of the fiscal year, we had shared an expectation to lever labor cost by 100 basis points over fiscal 2020 5 full year labor cost of 32.9%. I am very pleased to share that as of the end of our third quarter, we have been able to drive down our year to date labor cost. As a percentage of sales to 31.2%. It now looks like we are going to land in the neighborhood of 200 basis points of improvement. On our. Turning to clinical development. We opened 7 new restaurants in the third quarter. Orange, Union City, Temecula, and San Diego in California. Goodyear, Arizona, Wellington, Florida, and Denton, Texas. Subsequent to quarter end, we opened the reference in Tulsa, Oklahoma. Sunset Valley, Texas. And Charlotte, North Carolina, bringing us to 15 new unit openings to date. While we continue to expect to open 16 new restaurants for this fiscal year, We have unfortunately faced significant unexpected delays in a number of restaurant openings in both Q3 and Q4, and the loss of approximately 6 revenue months has impacted our revenue expectation for the year. Which we will discuss shortly. These delays occurred following the April earnings call across different geographies. And for different reasons. And for many unrelated reasons to coincide with 1 another. Is highly unusual. Our marketing team has been hard at work building our IP pipeline for fiscal 2020 7, which is reshaping up to be 1 of our strongest ever. Following our current collaboration with Honkai: Star Rail, we have a collaboration with Atlus' Persona. In general, Atlus officially announced the release of the much awaited Persona 6. Making the end of a decade long wait for fans since Persona 5 in February. In September and October, we are partnering with The Apothecary Diaries coinciding with the release of the anime's latest season. I am extremely excited to announce that. November marks our third collaboration with Nintendo. Our IP campaign for November and December is Yoshi to celebrate the recently released Yoshi and some mysterious books for the Nintendo Switch 2. In other marketing news, we remain on track for our fiscal 2020 launch of our app upgrade. to our rewards program. We are also in the process of introducing optionality to our Bikkura Pon system, by giving guests a choice. Between the capsule prize and the free dessert voucher that can be redeemed on their next visit. We believe this addition will improve guest satisfaction encourage repeat visits and reduce our prize production costs. Development is currently underway and we hope to have an update for you at our November earnings call. Now I will discuss our financials. and liquidity. For the third quarter, total sales were $85.9 million as compared to $74 million in the prior year period. Comparable restaurant sales growth compared to the prior year period was negative 0.4%. It is composed of negative 5.1% from traffic and 4.7% from price and mix. Comparable sales growth in our West Coast market negative 1.2% and negative 2.1% in our Southwest market. Effective pricing for the quarter was 4.5%. As a reminder, beginning in the first quarter of fiscal 2020 7, we will no longer provide regional breakdowns for comparable sales. Regional comps are largely determined by the timing of infills. And we do not believe they are indicative of overall company trends. Turning to cost. Food and beverage cost as a percentage of sales was 30.2%. Compared to 28.3% in the prior year quarter. Due to tariffs on imported ingredients. There were Labor and related costs as a percentage of sales were 30.6%. as compared to 33.1% in the prior year quarter, Due to operational efficiencies and pricing partially offset by low single digit wage inflation. Occupancy and related expenses as a percentage of sales was 7.8% compared to prior year quarters 7.5%. Depreciation and amortization expenses. As a percentage of sales were 4.9%. As compared to the prior year quarter's 4.7%. Other costs as a percentage of sales were 14.6%. As compared to the prior year quarter's 14.7%. And other administrative expenses as a percentage of sales were 11.9%. As compared to 11.8% in the prior year quarter. Operating loss was $39 thousand compared to operating loss of $162 thousand in the prior year quarter. Income tax expense Was $49 thousand. As compared to $55 thousand in the prior year quarter. Net income was $123 thousand or $0.03 per share. Compared to net income of $565 thousand or $0.05 per share. The prior year quarter. Restaurant-level operating profit as a percentage of sales Was 19.1%. Compared to 18.2% in the prior year quarter. Adjusted EBITDA was $6.6 million. As compared to $5.4 million in the prior year quarter. And at the end of the fiscal third quarter, we had $66.1 million in cash equivalents, and investments and no debt. Lastly, I would like to update and reiterate the following guidance for fiscal year 2020. We now expect total sales to be between $330.5 million and $331.5 million. We continue to expect to open 16 new units maintaining an annual unit growth rate above 20%. This average net capital expenditure per unit to continue to approximate $2.5 million. We continue to expect G and A expenses as a percentage of sales to be approximately 12% excluding litigation expense. And we now expect full year restaurant-level operating profit margins to be approximately 18.5%. Before we open the call to Q&A, I want to conclude my prepared remarks. By acknowledging our team whose execution during the quarter was excellent. Despite a challenging top line. This is best showcased in our improved guidance on restaurant-level margin and restaurant-level margin dollars which are both higher than our previous expectations for the year. We remain confident in our team's ability to deliver this kind of execution going forward. And I thank our team members for their continued effort. This concludes our prepared remarks. And I am happy to answer any questions you have. Operator, please open the line for questions. As a reminder, during the Q&A session, I may answer in Japanese before my response is translated into English. Thank you. Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the number keys. 1 moment while we poll for questions. Our first question is from Jeremy Hamblin with Craig Hallum. Please proceed with your question. Jeremy Hamblin: Thanks for taking the questions. I thought I might start with the comp trends. Obviously, a little bit disappointing with where traffic fell down 5% in the quarter. Wanted to see if you could provide us an update on how current quarter trends are looking, how June shaped up. And with the guidance range that you provided on revenues for FY 2026, what is the implied same store sale range that you would expect to hit those revenue figures given what you expect for unit openings? The remainder of the year? Hajime Uba: Sure. Thank you, Jeremy, for your first question. Please allow me to speak in Japanese. Benjamin is going to translate. Benjamin Porten: Hi, Jeremy. This is Benjamin. We were certainly, disappointed that traffic came in negatively as well. But we believe that this is largely due to elevated gas prices and along the lines of what we discussed in the prior earnings call. As the gas prices have eased, we are beginning to see a little bit of benefit as we have entered Q4, but those benefits are partially offset by how popular the World Cup is. And so the guidance that we are providing for the revenue contemplates the Q3 and Q4 macro background as well as the comp as well as the construction delays. Right? Jeremy, as it relates to comps, we continue to be confident in our ability to deliver slightly positive comps for the full year. it is this year has been choppy, but we are very much looking forward to fiscal 2020 7. As we have discussed in the past, the real estate pipeline is extremely promising. We it is the first time that we have had a majority new market ratio in many years, and so that will be a cannibalization tailwind. And so that will be a comp tailwind for us. The fiscal 2020 7 IP pipeline is phenomenal. I could not be happier with it, and so that should be a pretty meaningful tailwind as well. And we have the rewards program coming on as we enter the new year. And so as it relates to fiscal 2020, we remain very bullish about where we can land for the comps. Jeremy Hamblin: Gotcha. Okay. I think it implies something more like down 3%, 4% maybe in Q4. But I did have a follow-up question. Just you know, the company had a fairly consistent history of comp performance consistently positive with some volatility, but there is clearly been a bit more volatility over the past 2 years and wanted to just understand what you think might be driving that. And then in terms of thinking about as the company is closing in on 100 locations over, you know, the coming couple of quarters. How should we be thinking about kind of the long term growth algorithm for Kura, you know, as a concept? Is this something where you think of, kind of long term comps you know, in the range of, let's say, low single digit you know, positive low single digit, obviously, with some variability. But, you know, color on what internally you expect and whether, you know, obviously, there has been some noise in 26, but it seems as though the IP collaborations you know, have had maybe a bit of a bigger impact, you know, than you know, typical on results. Of course, you gotta throw in there the higher gas prices. But you know, thoughts on those 2 questions. Benjamin Porten: Sure. In terms of the things that we can the things that are under our control as it relates to comp, we see the real estate pipeline management is the dominant factor, and that really spoke to the real estate pipeline. As it relates to the IP pipeline, last year, we had a 5 month stretch without IPs, and so that was a very visible comp impact. We have since remedied that. We have done 7 this year, and we are actually, continuing to grow the number that we are doing every year as we know that there is maximal excitement at the beginning of every campaign. So fiscal 2020, beyond having higher quality IPs, we will also have a total of 8 IPs. We are also supplementing this by putting more energy into our food-based promotions. Our Kura Revolving Sushi Bar have been very, very successful with our guests, and so we were increasing the frequency from 9 a year to 12 a year. And these will also be supplemented by a different type of food-based promotion that allows us to be more reactive should there be macro pressure. So we can lean more into value if that were necessary. And as it relates to the last 2 years' comps, I would also add just that this has not happened in a vacuum We are in a world now with elevated gas prices last year. We had the FAST Act come online, and we have got a pretty big California presence. And so it is there are factors beyond our control, so we feel extremely good about the factors that are in our control. Jeremy Hamblin: Great. Alright. Well, thanks for taking my questions, and best wishes. Hajime Uba: Thanks, Jeremy. Thank you. Operator: Our next question is from Andrew Charles with TD Cowen. Please proceed with your question. Zachary Ogden: This is Zachary Ogden on for Andrew. Just have a follow-up to Jeremy's first question. I know you called out the delayed openings being partly responsible for the lower revenue guidance, but can you just talk about where that down 40 basis points same store sales for the quarter fell relative to your expectations? And then how your expectations for 4Q have changed over the last 90 days? Benjamin Porten: Hey, Zachary. This is Benjamin. In terms of the negative 0.4 for comps, this was not a this is within our range of possibilities, and so it was not a surprise to us. Just given the overall macro pressure and meaningfully elevated gas prices, especially in California, In terms of our thoughts on comps over the last 90 days, they have not really changed. We continue to believe that we can deliver positive comps for the full year. If we are talking about surprises, though, the restaurant delays are certainly the biggest surprise for us. This was not something that we had anticipated at all, during the at the time of the last call. Zachary Ogden: Got it. Okay. Thank you. And then the second question is on mix. Can you just unpack what made that flip positive in the quarter? Last call, it did sound like you were not expecting that to remain flat. So what drove mix to actually be positive and better than you were expecting? Benjamin Porten: Sure, Zachary. I am gonna have the surprises. It was a pleasant surprise at the beginning of the year when we began to see the mix turn so favorable. Especially after it had been a headwind for multiple years. That having continued through present day and actually further accelerating in June, have led us to believe that this is not, you know, just a coincidence or luck. And, we our interpretation is that this is completely a result of our pricing strategy. The 3.5% that we have priced up, that we took in November meaningfully under prices our competitors. And so our guests who have been going to other sushi restaurants have just become accustomed to paying a much higher price than they have, say, a year ago. And then they come into our restaurant with those higher price expectations. They see how much cheaper we are than we than they expect, and so they end up spending more as a result And so we are seeing growth not just in, per person plates, but also mix attachment and drinks. As well. So I think, generally in the restaurant industry, when there are macro pressures on the consumer, the expectation is that people reduce frequency. And so we are seeing that in traffic, and you know, given higher gas prices and the popularity of the World Cup, this is something that we would expect But seeing the mix grow is giving us enormous confidence just in terms of when our guests do come in, they are spending more than ever before. And so, clearly, they are responding extremely well to the efforts that we have been putting in place, whether it be the you know, the Coke float promotions that we are running in June, our new giveaways, hand roll campaigns, we have been, our promotional calendar has really been packed. And seeing that mix improvement sustain over, you know, more than 6 months now gives us that much more confidence that the competitive advantage between ourselves and the rest of the sushi industry is really it is it is it cannot be overstated. We feel that we have been able to take minimal pricing because of the aggressive cost controls, and our strong hope is that as, you know, the macro environment normalizes and the World Cup is no longer a factor, traffic returns, but our price mix remains elevated. Our pricing expectations for fiscal 2027 are actually to be below where we came in for fiscal 2020. And so we just hope to keep compounding this advantage. Zachary Ogden: Got it. Thanks, guys. Hajime Uba: Thanks, Zachary. Operator: Our next question is from Todd Brooks with Benchmark StoneX. Todd Brooks: Hey, thanks for taking my questions. Wanted to kind of dimensionalize the permitting delays in getting the new units open that you have experienced and that kind of caught you by surprise. I think you framed it up as maybe 6 months of lost unit operating time $4 million AUVs. I mean, can we ballpark the revenue guide down a kind of a couple of million attributable to the delays and the balance just same store sales performance? Operator: Go ahead. Hajime Uba: Just put them all. Benjamin Porten: Yeah. That yes. that is a fair analysis. Todd Brooks: Okay. Great. Thanks. And then just looking forward, you talked about how pleasantly surprised you have been by the mixed performance the last couple of quarters. I think coming into this quarter, you had looked for mix to revert that did not happen. Based on what you are learning here and as you are thinking about Q4, are you still assuming that you can kind of hold the hill on mix? Or are you expecting, in the guidance horizon going forward for the balance of the fiscal year mix to switch back to slightly negative? Benjamin Porten: Just given that the mix has actually, you know, improved as we have entered the quarter, we remain very optimistic We, in terms of the remainder of the quarter, we really do not see a reason for trends to change. That being said, you know, anything is possible, and so that is why we you know, that is the range of our that is reflected in the range of our restaurant level margin guidance as well as our expectations have slightly positive comps for the full year. So our we believe the macro situation as every macro situation will be ultimately transitory. But we believe that the mix flow through that we are seeing now is potentially a sustainable advantage And so net, this overall could be a very positive tailwind for us. In the coming years. Todd Brooks: Great. And then 1 final, and I will jump back in the queue. You quickly ripped through the review of the upcoming IP collab schedule. I know that Honkai just recently launched. Can we just review kind of the calendar for the back of this fiscal or this last quarter of the fiscal year? And then more importantly, can you quantify or maybe even qualify a product of the quality of Yoshi as a platform with Nintendo and this phenomena that seems like you keep earning your way up into a higher tier and maybe more impact promotions with Nintendo. Thanks. Benjamin Porten: Yep. It would be my pleasure So, after Honkai: Star Rail, we have Persona, Which is a role playing game. And then in September, October, we have the Apothecary Diaries which is a popular light novel series, which has since become a very popular anime. And then November and December, we have Yoshi. And just Yoshi relative to Kirby? Just on magnitudes of expected impact? I would say it is comparable. If not, yeah. I mean, you are asking me to choose between children. I love them both. Yeah. it is hard to pick. You can be very excited for the November call because we are extremely excited to share what we have for the back half of the year. in terms of the IP pipeline. Todd Brooks: Okay. Perfect. Thank you both. Hajime Uba: Thanks, Todd. Thank you. Operator: Our next question is from Matthew Curtis with D. A. Davidson. Please proceed with your question. Matt Curtis: Hi. Good afternoon. I was just wondering if we could get back to the third quarter for a minute. Could you guys describe maybe the sales impact that IP collabs had in the third quarter relative to second quarter. And then maybe more importantly, how are same store sales trends affected as you began to lap the resumption of IP collabs, which correct me if I am wrong, I believe happened at the end of April. Hajime Uba: Sure, Matthew. Benjamin Porten: This is Benjamin. For really any IP, our base case expectation is a low single digit comp. Contribution. When we have marquee items, like Kirby or Yoshi, the expectation is a mid single digit contribution. We are excited to continue to introduce more and more mid single digit contributing IPs as we, you know, continue so as it relates to Q3, we believe the IPs contributed low single digit They put it. [Inaudible] And part of the offset for the traffic pressure that we through the quarter was the success of our food collaborations. The Kura Reserve was very meaningful. In terms of, not just getting people to come in, but to spend more than they have before. that is been a pretty big part of the mix growth. And so we are we are very, excited for the incremental benefit that we will have next year by having an extra 3 of these. Matt Curtis: Thanks. And then a different topic. I think last quarter, you mentioned the 1% comp lift from the reservation system. I was just wondering if that persisted in the third quarter. Benjamin Porten: Yes. Matt Curtis: Okay, great. Thank you. Hajime Uba: Thank you. Thanks, Matthew. Operator: Thank you. Our next question is from Sharon Zackfia with William Blair. Please proceed with your question. Sharon Zackfia: Hey. Thanks for taking the question. So I am curious, as you have seen the slowdown in traffic, is there any difference in what you are seeing with new customer acquisition versus your existing customer frequency? Benjamin Porten: We are seeing much of a difference between, in terms of behavior between, nonmembers and members. The defining feature really for Q3 was just a reduction of frequency. And, again, going back to the reduction of frequency being tied to the macro environment with the higher gas prices and competing attention from the World Cup. All of these factors we understand are transitory. And we are very confident that we will be able to maintain the momentum of our mix. And come out stronger than before. Sharon Zackfia: Thanks for that. And then on the restaurant delays, are there steps that you are taking to help ensure that we do not see kind of any incremental issues in 2027. Are you adding more buffer to the pipeline as you think about that? Benjamin Porten: Of the 4 stores, 3 of the delays were caused by fire inspections. And in fact, when we do have delays, typically because of a fire inspection. When we do have a correction that we need to make, it is usually, something that we can do in 2 weeks, but the asks this time were much more involved And so that took they took on average 6 weeks with extra time added on top on the end as we were waiting for a reinspection to be scheduled. And so that was, pretty frustrating. Obviously, we adjust our practices with every you know, hiccup of these types that we face. But, unfortunately, it is always a different issue. it is it is you know, different counties have different rules and different inspectors even in the same county. Are idiosyncratic. And so that makes it pretty hard to head off. And so we do bake in to our expectations a certain degree of delays, but for so many to you know, follow on each other at the same time and for them to be much longer than we typically experience, that was what was somewhat expected. So we are happy to say that we actually just we just opened our Charlotte North Carolina location today, our 90 fourth restaurant. As part of that, inspection process, there was a request for, a third party inspection for conveyor belts, which had we had never happened with our preceding 93 restaurants. And so these kinds of surprises can always pop up. But now that is happened, we know you know, whenever we are opening up in a new county to come with that third party inspection ready, And head off that issue for the future. Sharon Zackfia: Okay. Thank you. Hajime Uba Operator: Our next question is Mark Smith with Lake Street Capital Markets. Please proceed with your question. Mark Smith: You mentioned some cannibalization kind of easing here, but I am curious any real impact in the quarter as well as your outlook for many of the restaurants that you have opened over the last several months from cannibalization. Benjamin Porten: Hey, Mark. This is Benjamin. In the past, I think our estimate for the comp headwinds, probably speaking, were between 300 to 400 basis points. Now we have been able to bring it down to about 52 basis points. We would expect this headwind to, continue into the first half of fiscal 2027, just given the timing of some of the openings, especially the first intels and next set key performers. But as we continue to as we start to benefit from the 55% new market mix, we would expect that cannibalization impact to steadily lessen over fiscal 2020 7 and 2020. Mark Smith: And then you talked about opening delays. I am curious if that is added any incremental costs. I know that you guys maintained your guidance here for kind of new restaurant build out costs. But, you know, are you seeing any incremental cost from delays or, you know, just inflation pressure that is leading to higher opening costs. Benjamin Porten: Mark. And so when we have a an opening delay, by an inspection, really, the primary cost would be in training costs or rehiring costs because you cannot ask somebody to wait for a month with no doubt. That being said, in spite of those incremental costs, we were able to raise our restaurant level operating profit margin guidance to 18.5%. And so we are spectacularly proud of just how efficient all of our, restaurant level members have been. And as, we get closer to the end of the year and have more visibility and fiscal 2020 7, we think that we are gonna get a lot closer to that 20% historical goal a lot faster than, we would expected. And so we are we are very excited to give you guys an update on that as well in November. Mark Smith: Perfect. I the last 1 for me is just thinking about menu price, increases what you guys have taken. It sounds like you are seeing positive results out of you know, offering a value proposition. But I am I am curious just if you wanna speak to elasticity in the price increases that you have taken and kind of response from consumers. Benjamin Porten: Well, I mean, I think the mix growth really speaks for it all. And so we are just, we are our plan is really to just keep the value as intact, as you know, as aggressive as it has been. Wait for that traffic to return and then just benefit on both ends. So we are actually in the process of performing an analysis to get an empirical view just how much pricing our competitors have been taking. We can speak anecdotally that against our 4% ish, it is much typically closer to 20%. It they are it is it is really just a gulf that has continued to widen exactly as we would expected. Post tariff. And so while it is unfortunate that the Q4 top line we expect some pressure. We believe that as long as we keep the pricing at a minimum and continue to drive margin improvement, in spite of that, when traffic returns will really margins will just we are extremely excited. Mark Smith: Excellent. Thank you, guys. Hajime Uba: Thanks, Mark. Mark. Operator: Our next question is from John-Paul Wollam with ROTH MKM. John-Paul Wollam: Great. Hi, guys. Appreciate you taking my questions. I wanted to kinda just follow-up on maybe sort of the new customer or sort of the understanding that you talked about earlier guests going to competitors and then coming to you guys and spending a little bit more. But I am curious, is there anything to show that you know, new customers or customers may be trading down from others is actually increasing as a percent of mix relative to your repeat customers. I am trying to get a sense of whether you think there is, you know, some real market share gains that are going on here that may be, you know, some customers have fallen off. But as that lower income traffic maybe returns, you see this big boost ahead. Benjamin Porten: Yeah. The biggest point in favor of that I could point at now is that the average check growth is actually the growth rate is faster among nonmembers than nonreward than reward members. Which has never been the case before. And so our interpretation is that is the reflection of a higher spending cost of guests coming to us. And we commissioned a consumer study twice a year. And so obviously, our, you know, that will be 1 of the top questions that we will have for the next analysis. And, look forward to updating you guys I am just know, how much we how much more can we be able to capture? John-Paul Wollam: Okay. Great. And then, 1 more, maybe more on a sort of strategic lens, but know, as you sit here almost a 100 units, thinking about your guys' centralized operations management at HQ, like, as you think about, you know, the next 100 units from here, how would you categorize where your infrastructure is at to support that? Is there anything that you are sort of seeing in the next 6 to 12 months that is needed? Benjamin Porten: JP. This is Benjamin. And so as it relates to fiscal 2020 7, we already have the pipeline locked and loaded, and we know that it is higher than 20%. So we are we are happy to report that. In terms of you know, the G&A and, know, support center, we think that we really do think that we have everything intact. We will just sort of need, proportionate growth to manage the more volume of work as we continue to grow. And so really nothing out of the ordinary there, and we would continue to expect to leverage G&A Just in terms of growth, unit growth broadly, the constraining factors for us have historically been the availability of high quality sites, our availability capital, and our management pipeline. We feel very good about our training department and our personnel We have got a great, bench. And, we opened 7 restaurants in Q3, but our cash burn was only $3 million. And so we are doing we are we are very, very pleased with, how our balance sheet management has been going. And so really, the remainder is just the availability of high quality sites. And so we wanna be flexible on that just so that we do not, you know, force ourselves to commit to sites that we would not otherwise choose. Great. John-Paul Wollam: Thanks, guys. Best of luck. Hajime Uba: Thanks, Jeremy. Operator: Our next question is from Jon Tower with Citi. Please proceed with your question. Jon Tower: Great. Thanks for taking the questions. Maybe real quick, obviously, you had spoke to the idea of seeing labor leverage and expecting that to be down, I believe, 200 basis points or so in fiscal 2020 6. Can you just speak to exactly what you are doing at store level to get that level of leverage particularly in the context of you know, very modest same store sales growth on the year? Benjamin Porten: So in terms of the labor gains this year, a lot of it comes down to the work that we did in fiscal 2020 5. The reservation system was installed system wide by Q4 of last year. And so that is resulted in headcount reduction in front of house. We have also gotten, better scheduling appropriately. We have gotten a lot tighter with that. And so those 2 factors have really been the, the driving factors for the improvement in fiscal 2020 We will be lapping the benefit of the reservation system, in implementation in Q4, but we have the robotic dishwasher to look forward to for fiscal 2020 7. And so this, again, and, you know, going back to your comment about leveraging 200 basis points on modest comps. This is really, I think, something that only Cura could do. Jon Tower: Okay. And then I appreciate all that color. Thank you for that. In terms of thinking about the other OpEx line, into next year? You know, obviously, right now, you have upped the IP cadence, which I know is gonna or has cost a little bit more money. But it does look like year over year, at least on a per week basis, that came down pretty nicely in the third quarter. The expectations for next year, given that you are going to be, I think, launching 1 more IP and then also you are gonna have these reserve 12 months or 12 reserve options throughout the year versus 9 this year. So broadly, how are you thinking about marketing spend next year versus this year? Benjamin Porten: Sure. Sure. John-Paul, we are we are happy you asked this because, this is something that Jim and I have been working on. So Jimmy touched on this in the prepared remarks, but the Bikkura Pon we think is actually going to be a maybe a bigger lever than people are initially appreciating. So to give you some context, we with the last consumer study, we saw that guests really saw the challenge of getting to that fifteenth plate and getting the prize is very compelling. But they found the prizes themselves not compelling. And so we were dispersing these prizes every time. Regardless of whether guests were interested on it in it or not. And by introducing the ability to get guests the option to choose between the capsule prizes or a food coupon, we no longer have that wasted toy that is left on the table. And, the cost of the dessert is really offset by the increment the incremental visit that we get when guests come to redeem it. And so altogether, once this is fully in place, we would expect up to a benefit of 50 basis points, and that would, more than offset the incremental investments in need additional frequency of IP campaigns and food LTOs. So we are we are really putting in every effort that we expect meaningful leverage in fiscal 2020 7 over fiscal 2020 6 as it relates to other costs as a percentage of sales. As we get ready for fiscal 2020 7, we have been pretty aggressively negotiating our contracts with our vendors for other cost items. We are at we are in the process of bringing a lot of our preventive maintenance work in house and that would be a very meaningful cost savings. And so with that and the, the Bikkura Pon savings as well, we are feeling very good about the other cost expectations for fiscal 2020 7. And this connects back to our earlier comment about you might be pleasantly surprised by how quickly we get back to that 20% restaurant level operating profit margin. Great. Jon Tower: Thank you for taking the questions. Appreciate it. Hajime Uba: Thanks, Jon. Operator: Our next question is from Jim Sanderson with Northcoast Research. Jim Sanderson: Hi, thanks for the question. Wanted to go back to the margin discussion. I think you are guiding towards 18.5% on a non GAAP basis. is comparable to last year? Is the biggest factor in fourth quarter going to be that continued improvement in labor rate that you would expect to continue into fiscal 2020 7? Benjamin Porten: As it relates to margin, yes, a lot of the benefit is coming from the labor. We will be lapping the introduction in Q4, so the benefit will be partial, but the bulk of it will be coming from the initiatives that we discussed earlier as well as the tight scheduling. The other costs improvements that we expect for fiscal 2020 7, we are already starting to see a little bit of benefit in Q4. And so some of that is part of our higher margin expectation as well. We also, we are getting some refunds on tariffs paid for our other cost items where we are the importer record. And so that is a onetime tailwind, but that does play into the 2023 expectation as well. And that 1 time tailwind Sorry. Oh, no. That being said, you know, all of our efforts, they are they are designed to be structural. And so they are just baked into the business now, and we expect the gains to only accelerate as we enter fiscal 2020 7. So we there would still be the opportunity for the robotic dishwashers to add value, in fiscal 2020 7 as we are rolled out. Yes. Yeah. And so, really, everything except outside of the nominal refund that we were on the tariffs for other costs, all of those factors continue to benefit us. Jim Sanderson: Okay. And the 1-time tariff will be fourth quarter? Pending? Benjamin Porten: Yes. Jim Sanderson: Okay. Benjamin Porten: Yes. Jim Sanderson: I wanted to also go back to traffic, the negative 5.4%. Can you break that down by month so we can try to get an understanding of how that, trended in the quarter? Benjamin Porten: There really was not enough difference between the month to really call out any sort of trend. Okay. So pretty much the same. Yep. I was just gonna the only thing I was gonna add is the June mix has seen a pretty it is it genuinely surprised me. So that is really it is good to be surprised, in a positive way. Right. Jim Sanderson: But relatively stable, traffic trend throughout the quarter. By month. Is the right way to look at this. Yes, sir. Alright. I will pass it on. Analyst: Thank you. Hajime Uba: Thanks, Jim. Operator: This now concludes our question and answer session. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines and have a wonderful day. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Kura Sushi (KRUS) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Total Sales: $85.9 million for the fiscal third quarter. Comparable Sales: Negative 0.4%, with negative 5.1% from traffic and positive 4.7% from price and mix. Restaurant-Level Operating Profit Margin: 19.1%, an improvement of 90 basis points over the prior year. Adjusted EBITDA Margin: Improved by 40 basis points to 7.7%. Adjusted EBITDA: $6.6 million, up from $5.4 million in the prior year quarter. Cost of Goods Sold: 30.2% of sales, compared to 28.3% in the prior year quarter. Labor Costs: 30.6% of sales, improved by 250 basis points from the prior year. Net Income: $423,000, or $0.03 per share, compared to $565,000, or $0.05 per share in the prior year quarter. Cash Equivalents and Investments: $66.1 million with no debt. New Restaurant Openings: Seven new restaurants opened in the third quarter, with a total of 15 new unit openings to date. Fiscal Year 2026 Sales Guidance: Expected to be between $330.5 million and $331.5 million. Expected New Units for Fiscal Year 2026: 16 new units, maintaining an annual unit growth rate above 20%. Warning! GuruFocus has detected 3 Warning Sign with KRUS. Is KRUS fairly valued? Test your thesis with our free DCF calculator. Release Date: July 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Kura Sushi USA Inc (NASDAQ:KRUS) improved its restaurant-level operating profit margin by 90 basis points over the prior year to 19.1%, despite higher costs due to tariffs. Adjusted EBITDA margins improved by 40 basis points to 7.7%, with adjusted EBITDA dollars growing by more than 20% over the prior year. Labor costs as a percentage of sales improved by 250 basis points to 30.6% due to operational initiatives. The company opened seven new restaurants in the third quarter and remains on track to open 16 new units for the fiscal year. Kura Sushi USA Inc (NASDAQ:KRUS) has a strong IP pipeline for fiscal '27, including collaborations with popular brands like Nintendo, which are expected to drive customer engagement. Comparable sales for the fiscal third quarter were negative 0.4%, with a 5.1% decline in traffic. The company faced significant unexpected delays in restaurant openings, impacting revenue expectations for the year. Cost of goods sold as a percentage of sales increased to 30.2% from 28.3% in the prior year quarter due to tariffs. Occupancy and related expenses as a percentage of sales increased to 7.8% compared to 7.5% in the prior year quarter. Net income decreased to $423,000, or $0.03 per share, compared to $565,000, or $0.05 per share, in the prior year quarter. Q: Can you provide an update on current quarter trends and the implied same-store sales range for FY '26? A: (Benjamin Porten, SVP, Investor Relations and System Development) We were disappointed with the negative traffic, largely due to elevated gas prices. As gas prices have eased, we're seeing some benefits, but these are offset by the World Cup's popularity. We expect slightly positive comps for the full year, and we're optimistic about fiscal '27 due to a promising real estate pipeline and strong IP collaborations. Q: What factors are driving the recent volatility in comp performance, and what are your long-term growth expectations? A: (Benjamin Porten, SVP, Investor Relations and System Development) Pipeline management, both IP and real estate, is crucial. Last year, we had a gap in IPs, but we've increased the number and quality of IPs this year. External factors like gas prices and the FAST Act have impacted comps, but we are confident in our internal strategies. Q: How did the delayed restaurant openings impact revenue guidance, and what are your expectations for mix in Q4? A: (Benjamin Porten, SVP, Investor Relations and System Development) The delays resulted in a loss of approximately six months of revenue, contributing to the lower guidance. However, the mix has improved as we've entered Q4, and we remain optimistic about maintaining positive trends. Q: Can you discuss the impact of IP collaborations on sales and the reservation system's effect on comps? A: (Benjamin Porten, SVP, Investor Relations and System Development) IP collaborations contributed low single-digit growth in Q3. The reservation system continues to provide a 1% comp lift, and we expect further benefits from additional IPs and promotions. Q: How are you addressing restaurant delays to prevent future issues, and what steps are you taking to ensure smooth operations? A: (Benjamin Porten, SVP, Investor Relations and System Development) Most delays were due to fire inspections, which are unpredictable. We adjust practices with each issue and have added measures like third-party inspections to mitigate future delays. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

IRVINE, Calif., July 07, 2026 (GLOBE NEWSWIRE) -- Kura Sushi USA, Inc. (“Kura Sushi” or the “Company”) (NASDAQ: KRUS), a technology-enabled Japanese restaurant concept, today announced financial results for the fiscal third quarter ended May 31, 2026. Fiscal Third Quarter 2026 Highlights Total sales were $85.9 million, compared to $74.0 million in the third quarter of 2025; Comparable restaurant sales decreased 0.4% for the third quarter of 2026 as compared to the third quarter of 2025; Operating loss was $39 thousand, compared to an operating loss of $162 thousand in the third quarter of 2025; Net income was $0.4 million, or $0.03 per diluted share, compared to net income of $0.6 million, or $0.05 per diluted share, in the third quarter of 2025; Restaurant-level operating profit* was $16.4 million, or 19.1% of sales; Adjusted EBITDA* was $6.6 million; and Seven new restaurants opened during the fiscal third quarter of 2026. * Restaurant-level operating profit and Adjusted EBITDA are non-GAAP measures and are defined below under “Key Financial Definitions.” Please see the reconciliation of non-GAAP measures accompanying this release. See also “Non-GAAP Financial Measures” below. Hajime Uba, President and Chief Executive Officer of Kura Sushi, stated, “During the fiscal third quarter, we were able to make significant progress towards our goals of sustainable margin improvement and returning to our historical 20% restaurant-level operating profit margins regardless of tariff relief. Despite our costs of goods sold as a percentage of sales being 200 basis points higher than last year due to tariffs, our operational discipline allowed us to more than offset this impact and improve our restaurant-level operating profit margin by 90 basis points over the prior year to 19.1%. We were also able to improve Adjusted EBITDA margins by 40 basis points, to 7.7%, and grew our Adjusted EBITDA by more than 20% over the prior year. Our ability to improve profitability in a challenging environment speaks to what we do best: responding rapidly to control what we can control.” Review of Fiscal Third Quarter 2026 Financial Results Total sales were $85.9 million compared to $74.0 million in the third quarter of 2025. Comparable restaurant sales decreased 0.4%, consisting of negative traffic of 5.1% and a price/mix of 4.7%, for the third quarter of 2026 as compared to the third quarter of 2025. Food and beverage costs as a percentage of sales were 30.2% compared to 28.3% in the third quarter of 2025. The increase is primarily due to tariffs on imported ingredients, partially offset by increases in menu prices. Labor and related costs as a percentage of sales were 30.6% compared to 33.1% in the third quarter of 2025. The decrease is primarily due to operational efficiencies and pricing, partially offset by low-single digit wage inflation. Occupancy and related expenses were $6.7 million compared to $5.5 million in the third quarter of 2025. The increase is primarily due to fifteen new restaurants opening since the third quarter of 2025. Other costs as a percentage of sales remained relatively consistent at 14.6% compared to 14.7% in the third quarter of 2025. General and administrative expenses were $10.2 million compared to $8.7 million in the third quarter of 2025, representing an increase of $1.5 million. The increase was primarily due to compensation-related costs of $1.1 million, $0.2 million of travel expenses and $0.2 million of other net expenses. As a percentage of sales, general and administrative expenses remained relatively consistent at 11.9% as compared to 11.8% in the third quarter of 2025. Operating loss was $39 thousand compared to an operating loss of $162 thousand in the third quarter of 2025. Income tax expense was $49 thousand compared to income tax expense of $55 thousand in the third quarter of 2025. Net income was $0.4 million, or $0.03 per diluted share, compared to net income of $0.6 million, or $0.05 per diluted share, in the third quarter of 2025. Restaurant-level operating profit* was $16.4 million, or 19.1% of sales, compared to $13.5 million, or 18.2% of sales, in the third quarter of 2025. Adjusted EBITDA* was $6.6 million compared to $5.4 million in the third quarter of 2025. Restaurant Development During the fiscal third quarter of 2026, the Company opened seven new restaurants in Orange, California; Goodyear, Arizona; Union City, California; Wellington, Florida; Temecula, California; Denton, Texas; and San Diego, California. Subsequent to May 31, 2026, the Company opened three new restaurants in Tulsa, Oklahoma; Sunset Valley, Texas; and Charlotte, North Carolina. Fiscal Year 2026 Outlook For the full fiscal year of 2026, the Company updates and reiterates the following annual guidance: Total sales between $330.5 million and $331.5 million; 16 new restaurants, maintaining an annual unit growth rate above 20%, with average net capital expenditures per unit of approximately $2.5 million; General and administrative expenses** as a percentage of sales to be approximately 12.0%, excluding litigation expenses. Restaurant-level operating profit margins to be approximately 18.5%. ** See “Non-GAAP Financial Measures” below. Conference Call A conference call and webcast to discuss Kura Sushi’s financial results is scheduled for 5:00 p.m. EDT today. Hosting the conference call and webcast will be Hajime “Jimmy” Uba, President, Chief Executive Officer, Chief Financial Officer and Benjamin Porten, SVP Investor Relations & System Development. Interested parties may listen to the conference call via telephone by dialing 201-689-8471. A telephone replay will be available shortly after the call has concluded and can be accessed by dialing 412-317-6671; the passcode is 13761106. The webcast will be available at www.kurasushi.com under the investor relations section and will be archived on the site shortly after the call has concluded. About Kura Sushi USA, Inc. Kura Sushi USA, Inc. is a leading technology-enabled Japanese restaurant concept with 94 locations across 24 states and Washington DC. The Company offers guests a distinctive dining experience built on authentic Japanese cuisine and an engaging revolving sushi service model. Kura Sushi USA, Inc. was established in 2008 as a subsidiary of Kura Sushi, Inc., a Japan-based revolving sushi chain with more than 650 restaurants internationally and 45 years of brand history. For more information, please visit www.kurasushi.com. Key Financial Definitions Adjusted Net Income (Loss), a non-GAAP measure, is defined as net income (loss) before certain items, such as litigation expenses, that the Company believes are not indicative of its core operating results. Adjusted net income (loss) per diluted share represents adjusted net income (loss) divided by the number of diluted shares. EBITDA, a non-GAAP measure, is defined as net income (loss) before interest, income taxes and depreciation and amortization expenses. Adjusted EBITDA, a non-GAAP measure, is defined as EBITDA plus stock-based compensation expense, non-cash lease expense and asset disposals, closure costs and restaurant impairments, as well as certain items, such as litigation expenses that the Company believes are not indicative of its core operating results. Adjusted EBITDA margin is defined as adjusted EBITDA divided by sales. Restaurant-level Operating Profit (Loss), a non-GAAP measure, is defined as operating income (loss) plus depreciation and amortization expenses; stock-based compensation expense; pre-opening costs and general and administrative expenses which are considered normal, recurring, cash operating expenses and are essential to supporting the development and operations of restaurants; non-cash lease expense; and asset disposals, closure costs and restaurant impairments; less corporate-level stock-based compensation expense recognized within general and administrative expenses. Restaurant-level operating profit (loss) margin is defined as restaurant-level operating profit (loss) divided by sales. Comparable Restaurant Sales Performance refers to the percent change in year-over-year sales for the comparable restaurant base. The Company includes restaurants in the comparable restaurant base that have been in operation for at least 18 full calendar months by the end of the accounting period presented due to new restaurants experiencing a period of higher sales upon opening. For restaurants that were temporarily closed the comparative period was also adjusted accordingly. Non-GAAP Financial Measures To supplement the financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company presents certain financial measures, such as adjusted net income (loss), EBITDA, adjusted EBITDA, adjusted EBITDA margin, restaurant-level operating profit (loss) and restaurant-level operating profit (loss) margin (“non-GAAP measures”) that are not recognized under GAAP. These non-GAAP measures are intended as supplemental measures of its performance that are neither required by, nor presented in accordance with, GAAP. The Company is presenting these non-GAAP measures because the Company believes that they provide useful information to management and investors regarding certain financial and business trends relating to its financial condition and operating results. These measures also may not provide a complete understanding of the operating results of the Company as a whole and such measures should be reviewed in conjunction with its GAAP financial results. Additionally, the Company presents restaurant-level operating profit (loss) because it excludes the impact of general and administrative expenses which are not incurred at the restaurant-level. The Company also uses restaurant-level operating profit (loss) to measure operating performance and returns from opening new restaurants. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that restaurant-level operating profit (loss) and restaurant-level operating profit (loss) margin are financial measures which are not indicative of overall results for the Company, and restaurant-level operating profit (loss) and restaurant-level operating profit (loss) margin do not accrue directly to the benefit of stockholders because of corporate-level and certain other expenses excluded from such measures. In addition, you should be aware when evaluating these non-GAAP financial measures that in the future the Company may incur expenses similar to those excluded when calculating these measures. The Company’s presentation of these measures should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. The Company’s computation of these non-GAAP financial measures may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate these non-GAAP financial measures in the same fashion. Because of these limitations, these non-GAAP financial measures should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. The Company compensates for these limitations by relying primarily on its GAAP results and using these non-GAAP financial measures on a supplemental basis. The Company believes that a quantitative reconciliation of the Company’s non-GAAP general and administrative expenses financial measure guidance to the most comparable financial measure calculated and presented in accordance with GAAP cannot be made available without unreasonable efforts. A reconciliation of this non-GAAP financial measure would require the Company to provide guidance for litigation expenses that cannot reasonably be predicted due to the fact that the timing and amount of such item is dependent on the timing and outcome of certain actions. For the same reasons, we are unable to address the probable significance of the unavailable information. Forward-Looking Statements Except for historical information contained herein, the statements in this press release or otherwise made by the Company’s management in connection with the subject matter of this press release are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and involve risks and uncertainties and are subject to change based on various important factors. This press release includes forward-looking statements that are based on management’s current estimates or expectations of future events or future results. These statements are not historical in nature and can generally be identified by such words as “target,” “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “continue,” “predict,” “potential,” “plan,” “anticipate” or the negative of these terms, and similar expressions. Management’s expectations and assumptions regarding future results are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements included in this press release. These risks and uncertainties include but are not limited to: the Company’s ability to successfully maintain increases in our comparable restaurant sales; the Company’s ability to successfully execute our growth strategy and open new restaurants that are profitable; the Company’s ability to expand in existing and new markets; the Company’s projected growth in the number of its restaurants; macroeconomic conditions and other economic factors; the Company’s ability to compete with many other restaurants; the Company’s reliance on vendors, suppliers and distributors, including its majority stockholder Kura Sushi, Inc.; changes in food and supply costs, including the impact of inflation and tariffs; concerns regarding food safety and foodborne illness; changes in consumer preferences and the level of acceptance of the Company’s restaurant concept in new markets; minimum wage increases and mandated employee benefits that could cause a significant increase in labor costs, as well as the impact of labor availability; the failure of the Company’s automated equipment or information technology systems or the breach of its network security; the loss of key members of the Company’s management team; the impact of governmental laws and regulations; volatility in the price of the Company’s common stock; and other risks and uncertainties as described in the Company’s filings with the Securities and Exchange Commission (“SEC”). These and other factors that could cause results to differ materially from those described in the forward-looking statements contained in this press release can be found in the Company’s other filings with the SEC. Undue reliance should not be placed on forward-looking statements, which are only current as of the date they are made. The Company assumes no obligation to update or revise its forward-looking statements, except as may be required by applicable law. Investor Relations Contact:Jeff Priester or Steven Boediarto(657) [email protected]

Kura Sushi (KRUS) came out with quarterly earnings of $0.03 per share, beating the Zacks Consensus Estimate of a loss of $0.05 per share. This compares to earnings of $0.05 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +160.00%. A quarter ago, it was expected that this company would post a loss of $0.1 per share when it actually produced a loss of $0.04, delivering a surprise of +60%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Kura Sushi, which belongs to the Zacks Retail - Restaurants industry, posted revenues of $85.92 million for the quarter ended May 2026, missing the Zacks Consensus Estimate by 0.4%. This compares to year-ago revenues of $73.96 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Kura Sushi shares have added about 7.2% since the beginning of the year versus the S&P 500's gain of 10.1%. While Kura Sushi has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Kura Sushi was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.20 on $94.01 million in revenues for the coming quarter and -$0.19 on $333.76 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Restaurants is currently in the bottom 17% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, First Watch Restaurant Group, Inc. (FWRG), has yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents a year-over-year change of +100%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. First Watch Restaurant Group, Inc.'s revenues are expected to be $350.27 million, up 13.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kura Sushi USA, Inc. (KRUS) : Free Stock Analysis Report First Watch Restaurant Group, Inc. (FWRG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Kura Sushi (KRUS) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended May 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 7. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of -200%. Revenues are expected to be $86.27 million, up 16.6% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 11.43% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Kura Sushi, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -122.22%. On the other hand, the stock currently carries a Zacks Rank of #4. So, this combination makes it difficult to conclusively predict that Kura Sushi will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Kura Sushi would post a loss of$0.1 per share when it actually produced a loss of -$0.04, delivering a surprise of +60.00%. Over the last four quarters, the company has beaten consensus EPS estimates three times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Kura Sushi doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kura Sushi USA, Inc. (KRUS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at sit-down dining stocks, starting with Kura Sushi (NASDAQ:KRUS). Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants. The 10 sit-down dining stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 1.1%. Luckily, sit-down dining stocks have performed well with share prices up 15.7% on average since the latest earnings results. Known for its conveyor belt that transports dishes to diners, Kura Sushi (NASDAQ:KRUS) is a chain of sushi restaurants serving traditional Japanese fare with a touch of modernity and technology. Kura Sushi reported revenues of $80.02 million, up 23.3% year on year. This print exceeded analysts’ expectations by 2.5%. Overall, it was a stunning quarter for the company with a beat of analysts’ EPS and EBITDA estimates. Hajime Uba, President and Chief Executive Officer of Kura Sushi, stated, “Entering this fiscal year, we knew that the second fiscal quarter would be critical regarding our ability to accomplish our stated goals, expectations and full-year guidance. Our fiscal second quarter was quite strong, with better-than-expected comparable sales performance and record-breaking labor leverage. This quarter is a great demonstration of the advantages that are unique to Kura, whether it’s our unmatched scale in the sushi space, our unique approach to technology, or the agility of our team members in building and implementing new initiatives.” Kura Sushi pulled off the fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 35.3% since reporting and currently trades at $47.19. Is now the time to buy Kura Sushi? Access our full analysis of the earnings results here, it’s free. Known for its country-themed food and merchandise, Cracker Barrel (NASDAQ:CBRL) is a beloved American restaurant and retail chain that celebrates the warmth and charm of Southern hospitality. Cracker Barrel reported revenues of $797.4 million, down 2.9% year on year, outperforming analysts’ expectations by 2.7%. The business had a stunning quarter with a beat of analysts’ EPS and EBITDA estimates. Cracker Barrel achieved the biggest analyst estimate beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 29% since reporting. It currently trades at $46.83. Is now the time to buy Cracker Barrel? Access our full analysis of the earnings results here, it’s free. Founded by Norman Brinker in Dallas, Brinker International (NYSE:EAT) is a casual restaurant chain that operates the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners. Brinker International reported revenues of $1.47 billion, up 3.2% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a narrow beat of analysts’ EBITDA estimates but full-year revenue guidance meeting analysts’ expectations. Brinker International delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. Interestingly, the stock is up 26.6% since the results and currently trades at $163.50. Read our full analysis of Brinker International’s results here. Founded in 1978 in California, BJ’s Restaurants (NASDAQ:BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist. BJ's reported revenues of $358.1 million, up 2.9% year on year. This result met analysts’ expectations. Aside from that, it was a mixed quarter as it also produced same-store sales in line with analysts’ estimates but a significant miss of analysts’ EPS estimates. The stock is up 39.1% since reporting and currently trades at $53.25. Read our full, actionable report on BJ's here, it’s free. Celebrated for its delicious (and free) brown bread, gigantic portions, and delectable desserts, Cheesecake Factory (NASDAQ:CAKE) is an iconic American restaurant chain that also owns and operates a portfolio of separate restaurant brands. The Cheesecake Factory reported revenues of $978.8 million, up 5.6% year on year. This number topped analysts’ expectations by 1.5%. It was a very strong quarter as it also logged a solid beat of analysts’ same-store sales and EBITDA estimates. The stock is up 23.4% since reporting and currently trades at $77.34. Read our full, actionable report on The Cheesecake Factory here, it’s free. Late in 2025 into early 2026, there was hand-wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure? These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. StockStory’s analyst team — all seasoned professional investors — uses quantitative analysis and automation to deliver market-beating insights faster and with higher quality.