Shares of Kura Sushi (KRUS -1.41%) were pulling back this week as the restaurant chain known for its revolving sushi bars missed the mark in its fourth-quarter earnings report.

As a result, the stock was down 14.5% for the week as of 2:45 p.m. ET, according to data from S&P Global Market Intelligence.

A spread of different kinds of sushi.

Image source: Getty Images.

Good results but not good enough

Like other restaurant chains, Kura seems to be experiencing a roll-off of the tailwinds from the post-pandemic reopening boom. Comparable-sales growth in the quarter was solid at 6.5% with most of the growth coming from traffic, but that represented a deceleration from earlier quarters as management said that comparisons had gotten more difficult.

Overall revenue rose 30.7% to $54.9 million, but that missed estimates at $55.8 million. Kura did see expanding restaurant-level operating margins, which rose 70 basis points to 24.4% as it benefited from lower food and beverage costs.

The company also opened up four new restaurants in the quarter, bringing its total to 50, and average-unit volumes rose from $3.8 million to $4.3 million, showing the company gaining leverage on its locations and driving increased traffic.

On the bottom line, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose from $4.8 million to $6.3 million, and generally accepted accounting principles (GAAP) earnings per share rose from $0.19 to $0.25, ahead of the consensus at $0.24.

CEO Hajime Uba called it "another record-breaking year" and added, "Over the course of fiscal 2023, we achieved our three major goals by opening a record ten new units, improving our restaurant-level operating profit margins by 70 basis points, and leveraging our general and administrative expenses by 80 basis points."

Where does the growth story go from here?

Looking ahead, the company forecast revenue of $238 million to $243 million, calling for a 28.3% increase at the midpoint. However, that was slightly below the consensus at $243.2 million.

Additionally, it expects to open 11 to 13 new restaurants, up from 10 in 2023, growing its store base by 24%. It also forecast general and administrative expenses to be 14.5% of revenue, down from 15% in 2023.

While the results might have come up short of estimates, they show the company delivering steady growth, and its average-unit volumes and restaurant-level operating margins are among the best in the fast-casual sector, especially considering the early stage of the business.

The stock is pricey, but Kura still has a lot of potential to ramp up profits.