What Happened:
Shares of sushi restaurant chain Kura Sushi (NASDAQ:KRUS) fell 16.3% in the morning session after the company reported third-quarter results with revenue falling short thanks to worse-than-expected same-store sales growth. Furthermore, its FY 2024 revenue guidance missed Wall Street's estimates. On the other hand, its adjusted EBITDA and EPS slightly topped analysts' expectations. Overall, this was a weak quarter for Kura Sushi, and investors were likely hoping for better guidance.
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What is the market telling us:
Kura Sushi's shares are very volatile and over the last year have had 33 moves greater than 5%. But moves this big are very rare even for Kura Sushi and that is indicating to us that this news had a significant impact on the market's perception of the business.
Kura Sushi is up 19.8% since the beginning of the year, but at $56.38 per share it is still trading 48.2% below its 52-week high of $108.92 from July 2023. Investors who bought $1,000 worth of Kura Sushi's shares at the IPO in July 2019 would now be looking at an investment worth $2,889.
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