Major sushi chain blighted by COVID-19 but CEO optimistic about outlook.
The American subsidiary of Japanese chain Kura Sushi, Kura Sushi USA, which was listed on the Nasdaq last August, posted its Q4 financial results for the period ended August 31st.
Total sales were USD 5.5 million, down from 2019’s USD 18.8 million. Operating loss was USD 6.8 million, compared to operating income of USD 1 million the year before.
Due to changes in local guidelines for public activities, Kura Sushi USA began to re-open certain restaurants in late May, and by the end of Q4, the company was able to open 23 out of 25 of its restaurants. Out of the 23 restaurants, 11 were largely operating on a takeout only basis due to an indoor dining restriction that the state of California enacted at the beginning of July.
To mitigate the loss of in-store sales, it implemented several initiatives to supplement its takeout service, including limited outdoor seating in many of its California restaurants and a system-wide roll-out of online ordering and delivery options through the food ordering and delivery platform Grubhub.
Despite the uncertain outlook for foodservice Kura Sushi President and CEO Hajime Uba took an optimistic tone. “While most of our restaurant operations were still hampered by varying COVID-19 restrictions during the quarter, especially in Los Angeles county, we were thrilled to see strong demand from our guests when we have been able to offer our complete Kura Experience,” he said.
“We saw another example of this with our recent new restaurant opening in Fort Lee, NJ, where sales in our dining room are trending at 50-60 per-cent of our pre-pandemic average unit volume, in spite of New Jersey’s 25 per-cent seating capacity limitation. With strong pent-up demand and solid financial footing, we are excited about the long-term growth opportunities of our business and will remain prudent as we navigate through this challenging environment,” said Uba.
As of August 31, the company had cash and cash equivalents of approximately USD 9 million and no debt. The company had not drawn down on the revolver with Kura Sushi Japan as of the end of Q4. On September 2, Kura Sushi USA increased its revolving line of credit to USD 35 million and extended the payback period from one year to five years. In November, it borrowed USD 3 million on the revolver.