Kura Sushi USA (KRUS) Q2 2025 earnings summary

Executive summary

• Fiscal Q2 2025 sales reached $64.9 million, up 13.3% year-over-year, with comparable sales down 5.3% due to reduced traffic and weather disruptions, partially offset by price/mix.

• Net loss widened to $3.8 million ($0.31/share) from $1 million ($0.09/share) last year, impacted by higher operating and administrative costs, including a $2.1 million litigation settlement.

• Restaurant base expanded to 73 locations as of February 28, 2025, with 75 open as of the report date; 14 new openings expected for fiscal 2025.

• March performance rebounded as weather normalized, though uncertainty remains due to recent tariff announcements.

Financial highlights

• Operating loss was $4.6 million for the quarter, up from $1.7 million year-over-year, impacted by sales deleverage and litigation settlement.

• Adjusted EBITDA was $2.7 million (4.1% margin), down from $2.9 million year-over-year.

• Restaurant-level operating profit margin was 17.3%, down from 19.6% year-over-year.

• General and administrative expenses rose to $11.0 million (16.9% of sales), mainly due to a $2.1 million litigation settlement.

• Cash and cash equivalents increased to $85.2 million as of February 28, 2025, from $51.0 million at August 31, 2024.

Outlook and guidance

• FY25 sales guidance reiterated at $275–$279 million, with 14 new units expected and annual unit growth above 20%.

• General and administrative expenses projected at 13.5% of sales, including litigation expense.

• Management expects revenue and restaurant operating costs to increase in fiscal 2025 due to continued expansion.

• No material impact from tariffs yet, but potential cost pressures anticipated for the remainder of fiscal 2025.

• Seven to eight IP collaborations planned for fiscal 2026, with no gaps between campaigns.