54 Stores and Counting

Kura Sushi (KRUS) FY2023 Results

Yesterday, Kura Sushi concluded its fiscal year with record sales of $54.9 million in the final quarter, translating to $187.4 million (+33%) for the year. Store growth of 25% is in line with management’s goal and while the guidance for 2024 store growth implies another year of 25% growth, there is scope for upgrades throughout the year. Margins are razor-thin at this stage, but the company also saw a return to EBIT profitability during the quarter. Net income for the year was positive, but largely thanks to abnormally high-interest income in the high-rate environment. Restaraunt-level margins expanded 70bps, costs are about in line with last year, and average unit volumes (AUVs) across the portfolio grew 11.7%.

Despite all of this, the stock was taken to the woodshed after hours, down as much as 30% at one stage, and is currently down ~10% as I write this. Last quarter I kicked things off by saying:

“Kura Sushi recently surpassed $1 billion in market capitalisation. While the valuatio…