The US-based technology-enabled Japanese sushi restaurant concept was meant to grow from 22 stores to 290.
The American subsidiary of Japanese chain Kura Sushi, Kura Sushi USA, which was listed on the Nasdaq last August, posted its second-quarter financial results for the period ended February 29, 2020.
The company had planned to achieve a 20 per cent average annual restaurant growth rate over the next five years. It would have done this by increasing the number of its conveyor-belt sushi outlets in the U.S. to 290 or more from the current 22.
However, now in light of the COVID-19 crisis, all 25 restaurants now remain temporarily closed. The company wrote that it had a strong liquidity position with a cash and cash equivalents balance of approximately USD 24 million and no outstanding debt as of April 13. It added that it has applied for a Payroll Protection Program loan under the Coronavirus Aid, Relief, and Economic Security Act, the USD 349 billion federal government boost enacted last month to help small businesses suffering from the COVID-19 crisis.
It has also entered into a USD 20 million revolving credit agreement with parent company Kura Sushi Japan.
Operating loss was USD 0.2 million compared to operating income of USD 0.3 million in the second quarter of 2019. Total sales increased by 28 per cent to USD 19.4 million, compared to the second quarter of 2019.
Hajime “Jimmy” Uba, President and Chief Executive Officer of Kura Sushi, said that the company was “fortunate to have a strong balance sheet” .”Our financial stability, combined with other steps we have taken to bolster our liquidity, gives us the confidence that we can weather these challenging economic conditions,” he added.
Due to the ongoing uncertainty around the duration and severity of the COVID-19 pandemic, the company has withdrawn its financial guidance for fiscal 2020, the period ending August 31.