Kura Sushi USA, Inc. (KRUS) on Q3 2021 Results - Earnings Call Transcript

Operator: Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Kura Sushi USA, Inc., Fiscal Third Quarter 2021 Earnings Conference Call. At this time all 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 call today we have Jimmy Uba, President and Chief Executive Officer; Steven Benrubi, Chief Financial Officer, and Benjamin Porten, Investor Relations Director. 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 2021 earnings release. It can be found @www. kurasushi.com, in the investor relations section. A copy of the earnings release has also been included in an 8-K we submitted to the SEC. Jimmy Uba: Thank you, Ben and thank you everyone for joining us today. Let me begin by saying how pleased I am with the rate of recovery in our restaurant following the COVID-related operational challenges we've experienced over the past 16 months. During our fiscal third quarter, we not only saw meaningful improvement in sales, but were also able to improve our operating efficiency and restaurant revenue profitability as we steadily increased our dining room capacity in accordance with state and local regulation. Let me briefly expand on this. As we mentioned on our last call March performance improvement was largely driven by the relaxation of dining room restrictions in mid to late March, including the resumption of our base operation and limited indoor dining in our California stores, as well as increased indoor dining capacity in non-California restaurants. During the third quarter, our average available seating capacity was approximately 60% against the second quarter's available seating capacity of approximately 25%. Our sales momentum continued through April and May, culminating in third quarter revenue of $18.5 million, more than doubling the revenue we saw in our fiscal second quarter. Looking at the current quarter, our sales recovery has continued with the lifting of operating restrictions in California in mid-June, resulting in full month June revenue of $8 million. As of July 1, all of our restaurants system wide was back to operating at full capacity with no restrictions in place. Guest response to the return of the full Kura experience has been terrific, and with further restriction relaxation during the third quarter our stronger revenue led to a restaurant level operating profit for the first time since entering the pandemic. Steven Benrubi: Thank you, Jimmy. For the fiscal third quarter total sales were $18.5 million, as compared to $2.8 million in the past year period. We believe measurement of comparable sales growth is most relevant versus the pre-COVID period of 2019. On that basis, comparable sales declined 19% with California down 36% due to varying COVID operating restrictions continuing throughout the quarter, while our Texas market increased 5% as COVID restrictions were removed from that market in the third week of the quarter. Turning to cost, food and beverage costs as a percentage of sales were 31.7% compared to 38% in the prior year quarter, reflecting largely normalized performance as sales volume improved and lower inventory spoilage. Labor and related costs as a percentage of sales decreased to 8.9%, from 126.3% in the prior year quarter, primarily due to higher sales leverage and a $5.8 million employee retention credit recognized under The CARES Act extension. Excluding the credit and retention and hiring bonuses, labor and related costs would have been 36.6%, primarily due to the effect of lower sales and minimum staffing needed to operate our restaurants at reduced capacities. Jimmy Uba: This concludes our prepared remarks. We are now 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. Please bear with us. Operator: Thank you. At this time, we'll be conducting a question and answer session. One moment please while we poll for questions. Our first question is from James Rutherford with Stephens, Inc. Please proceed. James Rutherford: Right. Thank you. Good afternoon, guys. I wanted to start off on the comments around unit development. I think you noted you expect continued momentum into fiscal 2022? Just to clarify, do you mean you aim to keep a similar growth rate of units in 2022? Or is it a number of units you intend to keep at a kind of consistent level next year. Jimmy Uba: Thank you, Jim for your first question. Please allow me to answer in Japanese. . Benjamin Porten: Hi, James this is Ben. So our comments in the prepared remarks isn't a resetting of our guidance or us providing new guidance. It's simply a reference to us having opened seven units in fiscal '21 and our expectation to open more than 7 units in the coming fiscal year. Jimmy Uba: . Benjamin Porten: In terms of our unit opening piece, there's always the considerations between the unit pipelines having the management pipeline in place, pandemic delays in our liquidity, and once we have greater clarity on all of those factors we hope to provide some more granular guidance. James Rutherford: Okay, that's helpful. I wanted to shift over to the comp side of the discussion. If I heard you correctly, you were exiting June with total company 2 year comps slightly positive. Correct me if I heard that wrong. But I wanted to ask for California specifically what you're seeing? I know the recovery there seems like it's pretty robust. Where do you think that shakes out here in the near term? I think Texas is kind of settled in that mid-single digit positive. Where do you think California will look like in the near term? Steven Benrubi: Hi, James, this is Steve. And I'll speak a little bit to the June comp performance. So as I think you know, June 15, the State of California lifted all of the remaining restrictions on indoor dining, and we were able to go to 100% capacity. And we did see a change in performance that came right along with that almost immediately. For the full month of June, the total company, we were down low-single digits on our comp. Texas was low double-digit positive. California was a mid-teens negative, as we were just starting to transition the restaurants to fuller capacity. James Rutherford: That's super helpful. Thanks for all the detail, Steve. If I can squeeze one more in on labor costs and then I'll pass it on. It sounds like 36% of sales normalizing for few items. I know sales were still down in total for the full quarter. What do you think the post-pandemic normal sales level, what should we expect for labor in that environment, given sort of the wage dynamic today? Steven Benrubi: Yeah, we look at both, cost of goods and labor pre-pandemic, or historically in that low-30s range for the company and COGS came right in there for the quarter. Labor, we were pleased with the leverage pickup that we got from about mid-40% of sales in Q2 to the 36.6%, adjusted in Q3. And we hope to be working ourselves eventually toward the same kind of pre-pandemic labor rates, in that low-30s range. There are some factors, just the fact that we've got, with a lot of hiring to get the stores back to full capacity, there's a lot of green people in some of those locations. And it does take time in both new stores and newer employees to reach peak efficiencies. And so labor may run, a little bit more elevated for a period of time, but eventually getting back in that low-30s neighborhood is our target. There is some inflationary pressure in categories, like dish washer wages for instance. But we still believe that over time we can, work our way to a pretty similar kind of labor leveraging, both with the sales, recovery and continuing improvement on efficiencies in the restaurants. James Rutherford: All right, I really appreciate it. Congratulations. Steven Benrubi: Thanks, Jim. Jimmy Uba: Thank you, James. Operator: Thank you. Our next question is from Peter Saleh, BTIG. Please proceed. Peter Saleh: Great. Thanks. Jimmy, could you comment a little bit on the performance of the restaurants that are not in the comp base, especially those in some of the new markets and how they aligned or matched up with your expectations as you went into those markets? Jimmy Uba: Sure, I'm happy to answer this question. . Benjamin Porten: In terms of sales recoveries, we're seeing similar results in Texas to the rest of the Texas comp base, it's been a very strong performer. California has been, just a little bit slower to recover. I think this is a function of us having smaller stores in California, and so they tend to fill up more quickly. But again, just as Steve mentioned, even the stores outside of our comp base are well within our expectations and are on track to hit pre-pandemic productivity levels. Jimmy Uba: . Benjamin Porten: And as Jimmy mentioned in the prepared remarks we're extremely pleased with performance on these scores. Fort Lee and Bellevue, in particular, are neck and neck for the second and third top performing spots. That's continued through July. They're just -- they're great scores. The new units that we've opened in new markets have really been encouraging. And looking at these units, we're very confident that it's just a matter of time until we're able to return to the same unit level economics that we're delivering for COVID-19. Peter Saleh: Excellent, that's great to hear. Could you just comment a little bit on the commodity environment and inflation that you guys are seeing and/or expecting over the next several quarters and what level of pricing do you anticipate you'll need to take to cover that inflation? Steven Benrubi: Sure, Peter, I'll speak a little bit to that. And just for starters, to kind of remind on our commodity basket, we are fortunate to have a very diverse mix of proteins and other commodities in our restaurants with over 130 items on the menu and our top five commodities are in the neighborhood of 25% to 26% only of our purchase mix. So it's not heavily concentrated in any particular area. But having said that, we have seen some inflationary pressure in spots across our commodity mix. And it's hard to know how much of that's transient versus more longer term. At this point, it's fortunately not a big factor, as you can see on our COGS performance for the quarter. But we're going to remain mindful of what we see develop in that arena. And if we see or feel like, things are a little more sticky that way, in long term, we do feel like, as we have in the past, there's opportunity to adjust pricing in an appropriate way to go along with what we're delivering in food product and not getting into any expectations or plans about the future on pricing. But suffice to say we'll, as we've done in the past, for instance, on minimum wage, increase dates, there could be further pricing move that goes along with what we see in food and labor. Peter Saleh: All right. Thank you very much. I'll pass it along. Jimmy Uba: Thank you, Peter. Steven Benrubi: Thanks, Peter. Operator: Our next question is from Andrew Strelzik with BMO Capital Markets. Please proceed. Andrew Strelzik: Hey, good afternoon, everyone. My first question is on the whitespace opportunity. I know you've said that you thought it was greater than you thought in the past. And you were going to do some work to kind of explore what that might look like. I'm curious where you are in that process? And if you have any insights to share at this point. Jimmy Uba: So this is Jimmy. I'm happy to answer this question. . Benjamin Porten: In terms of our thinking about the whitespace opportunity growing as a result of pandemic that remains unchanged. We're very optimistic. That being said, we're still very much in the early days of the pandemic winding down. And so we're waiting until things have stabilized further and things are -- we're clearly at the end to commission a whitespace study. Andrew Strelzik: Okay, that makes sense. I think last quarter, you pointed to Texas, in particular, and the off-premise mix there and said, hadn't really dipped below 5% at any point. I'm just curious, for an update there, as you've seen Texas move to positive comps, and also in California as the gap is narrowing their relative to 2019. What does the off-premise mix look like as those key markets are more fully opening? Steven Benrubi: So the full June off-premises mix is 6%. So within that mid-single digit, the high single digit expectation that we have for post pandemic off-premises sales. We're seeing similar results across markets. And we're -- we think this is a great demonstration for the long term stickiness of off-premises, correct. Andrew Strelzik: Okay, great. And then just my last one here. You mentioned, you still have a bunch of hiring to do. I'm just curious, how fully staffed are you now relative to before the pandemic and what is the -- what has the experience been hiring as these markets have opened? How are you finding the environment to be for the brand? Thanks. Jimmy Uba: . Benjamin Porten: So obviously, we knew that California would be reopening on June 15. And so we made a very serious effort mid-May, at the end of May, to begin this hiring care. This is particularly focused on hiring and retention bonuses, the major change that we made in terms of the hiring end, referral bonuses would be that instead of having the bonuses dispersed after a month, or two months or three months of staying with the company, we made this an upfront bonus. And that was tremendously effective. And as a result, we were able to fill all the positions we needed in California to operate normally. It was a tremendously successful hiring campaign. Andrew Strelzik: Great, thank you very much. Jimmy Uba: Thank you, Andrew. Operator: Thank you. Our next question is from Jeremy Hamblin with Craig Hallum Capital Group. Please proceed. Jeremy Hamblin: Thanks, and congratulations in managing through this really well. I wanted to come back to the commentary around Bellevue and Fort Lee locations. And in terms of that incredible performance you're seeing from those locations in the early days, is there something about the design of those restaurants, the size of those locations that maybe serves as a template, or perhaps even where they're located? What you might do going forward? Or I mean, because these are markets that you never been in before that probably don't have a lot of brand equity. But any color you can add in terms of how you know those restaurants are operating so strong right out of the gate? Jimmy Uba: Thank you Jeremy for your question. . Benjamin Porten: In terms of -- you asked about the size of the template. Fort Lee's about 3,000 square feet, Bellevue's about 4,000 square feet. So the very strong cells we're seeing is not a function simply of larger sizes or greater occupancy limits. And so in terms of Bellevue or Fort Lee changing our thinking about sizing or templates prototypes, it's really -- it's not going to impact our thinking. It's more about having chosen very good -- the site selection within those markets was excellent. Jimmy Uba: . Benjamin Porten: In terms of looking at Bellevue and Fort Lee specifically, I think we might have benefited a little bit from relatively higher demand for evolving sushi in those markets, as compared to the rest of the country. I think we're also benefiting from the fact that Fort Lee's our first store on the East Coast, Bellevue is our first on the West Coast. And so I think we're drawing from a larger radius than we would for a more infield market. Just to give you an idea, when we opened our first Texas store, people driving three hours down from Oklahoma. And so we do draw from a very wide area. In terms of the demographics, we're not seeing anything truly unique to Bellevue or Fort Lee that is correlated directly to its success. But we're excited to drill down further to see what we can glean from these openings to inform future openings. I just know, we do take an unusual approach in our unit growth and that we are not hub and spoke model where we take a non-continuous approach which is powered by our remote management system. And I say that this is a huge competitive advantage for us. If we were operating from a more traditional hub and spoke model it would have been much later in our corporate life, that we would have discovered just how lucrative and attractive the Pacific Northwest and East Coast are as markets for us. Jeremy Hamblin: Thanks for that color. You mentioned, I think that you have eight leases executed already. And I know you're not prepared yet to give specific unit growth guidance for fiscal '22. But typically, when you have those leases signed would development take more than a year or less than a year. What's kind of the average timeline from lease execution to having that store open? Jimmy Uba: . Benjamin Porten: Historically, it was almost always the case that we would open a store within a year after executing the lease. That being said, as we've seen over the last year and a half of the pandemic, there are externalities, construction delays. And beyond just construction, permitting delays as well as municipal governments are spread thin. And so it's harder for us to predict the construction timeline right now. But typically yes, with an executed lease the stores open within a year. Jeremy Hamblin: Okay, great. And then just coming back to your labor model, the embedded technology that you have within your restaurants, if you think to the future of what the core sushi model is going to look like in the U.S., do you anticipate that that model drifts a little closer towards your core Japan locations where potentially there's even more functions that are performed, kind of technology or are more automated than you currently have in your restaurants or even what you had in your restaurants, kind of pre-pandemic? Jimmy Uba: I will answer this question. . Benjamin Porten: In terms of comparisons to Japan, it's just the labor model is so fundamentally different, plate prices are different, commodities are different, the rent is different. And so we're very loath to draw direct comparison. But that being said, we do have a shared services agreement with the parent. And we have a quarterly exchange of technological developments from whether they're coming from the parent or our sister company in Taiwan, or ourselves, we regularly exchange developments. And we're also working on our own internal stuff that the parent doesn't have to introduce our own improvements. But just to add on to Jimmy's comment, you mentioned stuff that the parents, one major difference would be that Japan is a more self-service culture. And so they can deliver drinks by conveyor belts, where's that really is not part of what people expect for hospitality in the United States. And so our sort of analog for that would be the touch panel drink ordering that we're testing right now. This will allow -- servers won't be taking drinks. They'll be ordered through the touch panels. So the servers have -- their absolute labor responsibilities are reduced and they are able to focus more on hospitality. We're also working on tableside payment. And as I'm sure you know, our labor's really -- our labor's percentage of revenue is really a function of sales, leveraging, with tableside payment, we're hoping to reduce our table turn times and increase the number of parties that we can see per day. And that would be another way to improve our restaurant level economics. Jeremy Hamblin: Great, that's helpful. Last one from me, Steve, in terms of the May quarter, third party delivery charges off-premises, swipe charges, through Square, what was that as a percent of sales of your total sales? Steven Benrubi: Well, on the delivery charges, we actually don't subsidize that cost which runs right around $8 per transaction. So the customer picks that up themselves directly and to us there's no net cost related to that. And the Square charges are really baked into the credit card transaction fees that they charge us for processing the sales themselves. There's a few basis points -- just like any processor -- a few basis points premium that they charge to what their internal cost is. But it's a pretty -- for us it's a pretty transparent thing in terms of, not a significant incremental costs by anything going through Square and certainly the delivery is just a wash. Jeremy Hamblin: Great. Thanks for taking all of my questions and best wishes. Steven Benrubi: Thanks. Operator: Thank you. Our next question is from George Kelly with ROTH Capital Partners. Please proceed. George Kelly: Hi, everybody. Thanks for taking my questions. So maybe I'll start with pricing. You mentioned in response to one of the earlier questions just that you're considering, managing through this inflationary environment is by taking minus pricing at least that's what I heard. So question for you is I know you've taken some real modest nothing major in the past but is there much sensitivity and have you kind of tested the upper bounds of when that sensitivity really does start to show through? Jimmy Uba: Thank you. Steve. Steven Benrubi: Go ahead, Jimmy. Jimmy Uba: Okay. . Benjamin Porten: In terms of testing what the potential upper limits of pricing would be we haven't done any tests specifically geared towards that. When we do take pricing the things that we're considering be -- we monitor, the plate price, not -- I'm sorry, not the plate price, the number of plates being eaten, the average tickets. Our goal is for our sushi to remain accessible. And so we try to keep our ticket in line with the ticket averages of our peers in casual dining industry. That being said, in terms of sensitivity, because we take such minor pricing because of our small plates menu, it's on the order of $0.05, $0.10, $0.25, there's been pretty minimal sensitivity or pushback from our guests in the past. In terms of margin management, that remains a very robust lever, whether we're talking about labor inflation or commodity inflation, there's still room to take price. George Kelly: Okay, that's helpful. And then different topics, back to the trends that you've seen just in same store sales, so did I miss on that? Did you comment at all on July? What you've seen, I'm just curious if you've seen continued acceleration? Steven Benrubi: Yeah, we haven't commented on July same store. We really talked about through the end of June. Jimmy did allude to the Sanrio Hello Kitty promotion, which launched on July 1, and like many of our other brand partnerships, we're very excited and happy about how that customer reception has been to that since the beginning of July. But we'll share more of that next time we talk. George Kelly: Okay, great. And then last question for me is when I look across your store base, I see wait times consistently at most of your restaurants. And I heard in response to a different question just that you don't think stores -- you're pretty comfortable with the size and everything. But why not open -- can you just, I don't know what the exact question is. But what is your largest restaurant? And why not in future units, why not tweak up the size a little bit just to boost your capacity? Thank you. Jimmy Uba: . Benjamin Porten: So we're fully aware of that we have long wait times during weekends in particular. But as Jimmy mentioned earlier, actually, when we were talking about Bellevue and Fort Lee, larger sizes don't necessarily have a one to one correlation to stronger sales. Our largest store is 6,800 square feet. But Bellevue and Fort Lee are 4,000 and 3,000 square feet respectively, and are stronger performers. And so thinking about it, cash on cash, restaurant build out costs, it's not always a matter of simply just going bigger and expecting, comparable margins or comparable returns. And so this is going to be something that is part of an ongoing discussion between the executive management team at Kura Sushi to continue to figure out what the most appropriate sizes or whether they're different appropriate sizes for different markets. George Kelly: Okay, thank you. And I guess I do have one more quick one. Texas, impressive statistics that you gave on same store sales. Within that, I'm sure you're not going to want to get too granular. But within that, what you reported, the positive comps and everything, is there a large range? And what I'm trying to understand is if there's a group of stores within the Texas market that still is being really, really negatively impacted by COVID? And that's my last question. Thank you. Jimmy Uba: . Steven Benrubi: Go ahead Jimmy. Jimmy Uba: Yeah, just to reiterate, Texas as a whole has -- you know, we're very happy with the rebound in the performance there. You can look at maybe some markets and consumer psychology around COVID in general. It may be a little more cautious, for instance in the Houston market than it might be in the Dallas market. And you would see, to some degree, a little difference in numbers. But on the whole, you know, Texas is clearly doing very well as evidenced by the overall rebound that we saw very quickly, and sustained since then over the last few months. Operator: Ladies and gentlemen, there are no more further questions, and this will conclude today's conference. You may disconnect your lines at this time. Thank you very much for your participation. Have a great day.
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Related Analysis

Kura Sushi USA, Inc. (NASDAQ: KRUS) Faces Financial Challenges Despite Revenue Growth

  • Kura Sushi USA, Inc. (NASDAQ: KRUS) reported an earnings per share (EPS) of -$0.31, missing estimates and indicating financial challenges.
  • The company generated revenue of approximately $64.89 million, slightly above estimates, showcasing its ability to maintain sales.
  • Despite negative profitability indicators, KRUS maintains a moderate debt-to-equity ratio of 0.72 and a strong current ratio of 2.67, suggesting financial stability.

Kura Sushi USA, Inc. (NASDAQ: KRUS) is a technology-driven Japanese restaurant chain known for its innovative approach in the dining industry. The company leverages technology to enhance customer experience and streamline operations. Despite its forward-thinking strategies, KRUS faces competition from other restaurant chains and must navigate financial challenges to maintain its market position.

On April 8, 2025, KRUS reported an earnings per share (EPS) of -$0.31, which was lower than the estimated -$0.08. This result was also worse than the previous year's same quarter loss of $0.09 per share. The company's financial performance was discussed during its Q2 2025 earnings conference call, featuring key executives and analysts from firms like TD Cowen and Barclays.

Despite the disappointing EPS, KRUS generated a revenue of approximately $64.89 million, slightly surpassing the estimated $64.87 million. This indicates that while the company is struggling with profitability, it is still able to generate sales. The price-to-sales ratio of 1.94 suggests that investors are paying $1.94 for every dollar of the company's sales, reflecting some confidence in its revenue-generating capabilities.

KRUS's financial metrics reveal challenges, with a negative price-to-earnings (P/E) ratio of -47.67 and an earnings yield of -2.10%, indicating negative earnings. However, the company maintains a moderate debt-to-equity ratio of 0.72, showing a balanced approach to leveraging debt. The current ratio of 2.67 suggests a strong ability to cover short-term liabilities with short-term assets, providing some financial stability.

The enterprise value to sales ratio of 2.23 and the enterprise value to operating cash flow ratio of 32 highlight the company's valuation relative to its sales and cash flow. These figures suggest that while KRUS faces profitability challenges, it continues to hold value in the market, driven by its innovative approach and revenue generation.

Kura Sushi USA, Inc. (NASDAQ:KRUS) Shows Signs of Financial Improvement Despite Challenges

  • Kura Sushi USA, Inc. (NASDAQ:KRUS) reported an earnings per share (EPS) of -$0.08, surpassing the Zacks Consensus Estimate.
  • The company's revenue was $64.46 million, slightly below expectations, but its price-to-sales ratio of 4.51 indicates investor confidence.
  • Despite a negative EPS, KRUS demonstrates strong liquidity with a current ratio of 3.47 and a moderate debt-to-equity ratio of 0.67.

Kura Sushi USA, Inc., listed as NASDAQ:KRUS, is a prominent player in the sushi restaurant industry. Known for its innovative dining experience, Kura Sushi operates a chain of revolving sushi bars across the United States. The company competes with other sushi chains and casual dining restaurants, striving to capture a significant market share with its unique offerings.

On January 7, 2025, KRUS reported an earnings per share (EPS) of -$0.08, which was a notable improvement over the Zacks Consensus Estimate of a -$0.24 loss per share. This performance also marked a positive shift from the previous year's loss of $0.18 per share, indicating progress in the company's financial health. Despite the negative EPS, the improvement suggests that KRUS is on a path to better financial performance.

The company generated a revenue of approximately $64.46 million, slightly below the estimated $66.59 million. This shortfall in revenue might be a concern, but the company's price-to-sales ratio of 4.51 indicates that investors are still willing to pay $4.51 for every dollar of sales. This suggests a level of confidence in KRUS's ability to generate future sales and growth.

KRUS's financial metrics reveal a complex picture. The price-to-earnings (P/E) ratio of -151.14 and an earnings yield of -0.66% highlight the current negative earnings situation. However, the debt-to-equity ratio of 0.67 suggests a moderate level of debt, which is manageable. The current ratio of 3.47 indicates strong liquidity, ensuring that KRUS can cover its short-term liabilities comfortably.

The enterprise value to sales ratio of 4.69 and the enterprise value to operating cash flow ratio of 66.99 reflect the company's valuation and cash flow generation. The high enterprise value to operating cash flow ratio suggests that while KRUS's valuation is high, its cash flow generation is relatively low. This could be an area for the company to focus on improving as it continues to enhance its financial performance.

Kura Sushi USA, Inc. Earnings Preview: A Deep Dive into Financial Metrics

  • Analysts predict a downturn in earnings for Kura Sushi USA despite a set EPS estimate of $0.15 and projected revenue of $65.39 million.
  • The company's high price-to-earnings (P/E) ratio of approximately 590.41 suggests a high valuation compared to earnings, raising concerns among investors.
  • KRUS's financial health indicators, such as the debt-to-equity (D/E) ratio of roughly 0.78 and a current ratio of about 2.43, reflect a balanced approach to financing and financial stability.

Kura Sushi USA, Inc. (NASDAQ:KRUS), a technology-enabled Japanese restaurant concept, is gearing up to release its quarterly earnings on Thursday, July 4, 2024, before the market opens. With Wall Street analysts setting the earnings per share (EPS) estimate at $0.15 and projecting revenue for the quarter to be approximately $65.39 million, stakeholders are keenly awaiting these figures. The company, based in Irvine, California, has already shared its preliminary unaudited financial results for the third quarter of fiscal 2024, hinting at its performance and potential growth trajectory during this period.

Despite the anticipation, analysts from Zacks Investment Research predict a downturn in earnings for KRUS in its forthcoming earnings report. This analysis suggests that Kura Sushi may lack the necessary combination of two crucial elements typically associated with an earnings beat, setting a cautious tone for investors. This speculation is particularly significant given the company's financial metrics, which include a high price-to-earnings (P/E) ratio of approximately 590.41, indicating a high valuation compared to earnings.

Furthermore, KRUS's financial health and market valuation are reflected in its price-to-sales (P/S) ratio of about 4.35, suggesting that investors are willing to pay $4.35 for every dollar of sales. The enterprise value to sales (EV/Sales) ratio stands at approximately 4.69, highlighting the company's total valuation in relation to its sales. Additionally, the enterprise value to operating cash flow (EV/OCF) ratio of around 44.14 shows the company's valuation in terms of its operating cash flow, with an earnings yield notably low at 0.17%, indicating lower earnings relative to the company's share price.

KRUS's debt-to-equity (D/E) ratio of roughly 0.78 points to a moderate level of debt relative to equity, suggesting a balanced approach to financing. The current ratio, at about 2.43, indicates that the company is well-positioned to cover its short-term liabilities with its short-term assets, providing a measure of financial stability. As investors and stakeholders await the official earnings announcement, these financial metrics offer a comprehensive view of Kura Sushi's financial health and market position, setting the stage for the upcoming earnings release.