Shares of Kura Sushi USA (KRUS 2.69%) surged on Thursday after the Japanese-style restaurant chain delivered a surprise profit and boosted its full-year revenue forecast. As of 1:10 p.m. ET, Kura Sushi's stock price was up more than 25%.
Kura Sushi's revenue more than doubled year over year to $38 million in its fiscal 2022 third quarter, which ended on May 31. The gains were driven by new restaurant openings and a 65% surge in sales at the company's existing locations.
Kura Sushi opened one restaurant during the third quarter and a total of six stores over the past year. That brought its store count to 37 locations at the end of May.
Notably, sales at Kura Sushi's restaurants have not only fully recovered from its coronavirus-related challenges, but have also shown impressive growth.
"The strong sales momentum from the first half of our fiscal year continued into the third quarter, exemplified by comparable sales growth of 28.3% versus our pre-pandemic fiscal 2019 results and another record sales quarter for the company," CEO Hajime Uba said in a press release.
Better still, Kura Sushi was able to use menu price increases to offset higher food costs. That helped its food and beverage costs as a percentage of sales improve to 29.7% from 31.7% in the year-ago period.
"Our team has done a tremendous job navigating ongoing inflationary pressures, resulting in a solid improvement in our restaurant-level profitability, both on a dollar and margin basis as compared to our pre-COVID period," Uba said.
All told, Kura Sushi's adjusted net income checked in at $0.5 million, or $0.05 per share, compared to an adjusted net loss of $4.5 million, or $0.54 per share, in the prior-year quarter. Analysts had expected an adjusted loss of $0.09 per share.
These strong results and positive ongoing sales trends prompted Kura Sushi to lift its full-year revenue guidance. Management now expects the company's sales to grow roughly 115% to between $137 million and $142 million in fiscal 2022. That's up from a previous projection of $130 million to $140 million.
"Guest reception for our new openings has continued to exceed our initial expectations," Uba said. "We believe each of our successful new markets is a point of proof for the national portability of our brand, and that our growth prospects are stronger than ever."