What happened
Shares of restaurant chain Kura Sushi (KRUS 4.25%) popped today after the company reported financial results for its fiscal third quarter of 2023. As of 12:15 p.m. ET on Friday, Kura Sushi stock was up almost 13% and approaching an all-time high.
So what
Kura Sushi is small restaurant chain with only 47 locations. But these locations pack a punch: The company generated $49.2 million in third-quarter revenue, which was up 29% year over year. This top-line growth included a 10% jump in same-store sales.
The real surprise from Kura Sushi in the third quarter was its profitability. The company had net income of $1.7 million, which more than tripled its figure in the prior-year quarter and was well ahead of investors' expectations.
Now what
With its strong financial results in the third quarter, management raised its full-year revenue guidance. Previously it expected full-year 2023 sales of $185 million to $188 million, but now it anticipates sales of $187 million to $189 million.
Over the long term, Kura Sushi believes it can have around 300 locations across the country. But it costs about $2.5 million to open a new location, so expansion is pricey. Therefore, management took advantage of its strong stock price to bolster its balance sheet with a stock offering. In the third quarter, it raised $64 million with its follow-on stock offering and put itself in a good financial position to keep growing.
