Kura Sushi USA (KRUS, Financial) experienced a notable uptick, climbing 7% following its second-quarter earnings report. Despite reporting a larger-than-expected loss, the Japanese restaurant chain saw a 30.4% year-over-year increase in revenue, reaching $57.3 million and slightly surpassing analyst forecasts. Furthermore, KRUS has revised its FY24 revenue projections upwards to $243-246 million from the previously estimated $239-244 million. A key highlight from the announcement was a lucrative partnership with DoorDash (DASH, Financial), which is expected to positively impact the company's growth trajectory.
Key takeaways from the report include:
- Comparable restaurant sales rose by 3.0%, with the West Coast locations showing an impressive 8.7% increase.
- A 5.9% surge in customer traffic outpaced the casual dining sector average, reflecting strong consumer engagement.
- The DoorDash partnership enables KRUS to maintain in-store menu prices for delivery orders, expected to be margin neutral or even accretive.
- With the addition of five new restaurants in Q2, bringing the total to 60, and plans for 13-14 more in FY24, expansion is a significant part of KRUS's growth strategy.
Investor sentiment is overwhelmingly positive, focusing on the company's revenue growth and strategic initiatives rather than its earnings miss. The DoorDash collaboration, in particular, is seen as a major win, potentially drawing in more customers and benefiting from inclusion in the DashPass subscription service. This partnership echoes the recent buzz around Domino's (DPZ, Financial) and its UberEats collaboration, underscoring the potential for delivery partnerships to drive growth in the restaurant industry. KRUS's stock performance is a testament to its status as a high-growth, early-stage concept in the market.
