The bond markets are wreaking havoc on daily 52-week high and low data.
In Tuesday trading, 66 new 52-week highs and 374 new 52-week lows were set on the NYSE, respectively. On the Nasdaq, new 52-week lows outnumbered new 52-week highs, 422 to 74.
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My guess is that about 40% of the names hitting new 52-week lows on both exchanges are income-related securities. That makes it a little tougher to find a stock or ETF to discuss.
However, when I read Bloomberg’s reporting from yesterday that President Trump has made more securities trades than every member of Congress combined since January 2025, Kura Sushi USA (KRUS) immediately jumped out at me.
According to Trump’s latest financial disclosure, his third-party asset manager bought between $1 million and $5 million of the restaurant operator’s stock on Feb. 2. If the President still owns the stock, he has an unrealized loss of approximately 45-50% on the investment.
Kura Sushi USA hit its 28th new 52-week low of the past 12 months yesterday at $35.19. The President’s money managers took a swing. Now much lower, should you buy on the significant dip?
Here are my thoughts.
Su Su Sushi -- Kura Sushi USA’s Story
If you’re older than 60 and a music fan, you might know the punk/rock band, The Tubes. Big in the late 1970s and 1980s, their song "Sushi Girl" was one of the tracks on their successful 1981 album, The Completion Backward Principle. The album’s commercial success saved their career. But I digress.
Kura Sushi USA began in 2008. The U.S. arm of Kura Sushi Inc., the purveyor of fresh sushi served to customers on a moving conveyor belt, opened its first U.S. location in Irvine, California, in 2009.
Kura Sushi USA went public in August 2019, selling 3.34 million shares of its stock for $46.8 million in gross proceeds. At the time of its IPO, it had 22 restaurants operating in four states: California, Texas, Georgia, Illinois, and Nevada. Today, it has 94 locations in 24 states and Washington DC. That’s an impressive store opening CAGR (compound annual growth rate) of 23.1%.
Post IPO, Kura Sushi owned 60.0% of the equity and controlled 80.8% of the votes. Today, the parent owns 42.2% of the equity and controls 66.8% of the votes.
At KRUS’s all-time high of $122.81 on March 25, 2024, the stock was up 777% from its IPO price. It’s given back 71% of those gains over the past 30 months.
What’s Gone Wrong for KRUS?
Three things come to mind.
1) Comparable restaurant sales have slowed considerably
Since its homerun results in fiscal 2022 (August year-end) when they grew 81.9% over 2021. However, part of the explanation for the jumbo growth was that it was still recovering from Covid in 2021, so the base on which the 81.9% result was generated was lower than normal.
The good news from the table below is that the hemorrhaging comparable store sales appears to have bottomed in 2025. Through the first nine months of 2026, they’re up 1.8%; it reports Q4 results in early November.
The bad news is that comparable restaurant sales fell 0.4% in the third quarter. It would have been worse if the price/mix of business didn’t increase 4.7%.
| Period | Comparable Restaurant Sales Growth | Period | Comparable Restaurant Sales Growth |
May 2026 (9 months) | +1.8% | AUG 2022 (12 months) | 81.9% |
AUG 2025 (12 months) | -1.3% | AUG 2021 (12 months) | 16.2% |
AUG 2024 (12 months) | 0.7% | AUG 2020 (12 months) | -37.8% |
AUG 2023 (12 months) | 9.5% | AUG 2019 (12 months) | 6.2% |
2) Restaurant-level operating profit margins haven’t held
In fiscal 2022, Kura Sushi’s restaurant-level operating profit margin was 21.2%, rising 70 basis points in 2023 to 21.9%. It then dropped to 20.1% in 2024 and 18.4% in 2025. Through the first nine months of 2026, they were 17.6%. It projects its 2026 restaurant-level operating profit margin will be 18.5%, up slightly from 2025.
In the third quarter, the restaurant-level operating profit margin was 19.1%, up 90 basis points from Q3 2025, and 80 basis points away from its long-term target of 20%.
The difference between Kura Sushi making money and losing money comes down to the restaurant-level operating profit margin.
The restaurant chain hit 21.9% in fiscal 2023, resulting in an operating profit of $300,000, its only profitable year in the past five years. Seven months later, it hit an all-time high of $122.81. It’s critical to the share price moving higher.
3) Valuation Reset
When KRUS hit its all-time high in March 2024, its enterprise value of $1.34 billion was 6.71 times revenue. Currently, its enterprise value is $595 million, 1.87 times revenue. That’s a considerable valuation reset. Rightfully so.
In the 30 months since hitting its all-time high, the restaurant-level operating profit margin has fallen by 430 basis points, or 20%. Since the margin hit 20.9% in Q4 2024, it has been below its 20% long-term target for six straight quarters.
Despite the ongoing struggles to meet the target, seven of the 13 analysts that cover KRUS rate it a Strong Buy (4.08 out of 5) with a target price of $65.82, well above its current price.
Buy KRUS on the Dip?
Kura Sushi has four growth strategies: 1) Open new restaurants, 2) Grow comparable restaurant sales consistently, 3) Increase profitability, and 4) Increase brand awareness.
It’s definitely meeting the first goal. In 2026, it plans to open 16 new restaurants, while increasing its restaurant count by 20% a year for the foreseeable future. As it continues to scale, that should help with profitability.
Consistent comparable restaurant sales growth hasn’t been easy to come by. Since going public, they’ve been up and down like a yo-yo. Some of that was out of its control (Covid, tariffs, affordability), but others have managed it.
Before Wingstop (WING) began a five-quarter losing streak of declining comparable restaurant sales, it delivered 12 straight quarters of growth from Q2 2022 through Q1 2025. It can be done.
The company’s ability to increase profitability hasn’t been good. Since going public in August 2019, its highest quarterly EBITDAR (earnings before interest, taxes, depreciation, amortization, and rent costs) profit was $11.0 million in Q3 2026, a 12.8% margin. That’s the good news.
The bad news is EBITDAR is a non-GAAP metric. In terms of operating income, over 27 quarters as a public company, it’s generated an operating profit in six of 27 quarters, a success rate of 22%. That won’t get you into the Baseball Hall of Fame.
The final growth strategy, increasing brand awareness, I can’t fully answer because I live in Canada. However, operating in 24 states, store openings seem to be doing the trick.
Based on average unit volume of $3.9 million, a net capex per unit of $2.5 million, and a 20% restaurant-level operating profit margin, the company has a 38-month payback. That’s quite lengthy. Wingstop’s is under 24 months.
Should you buy at these prices?
I wouldn’t until it proves it can consistently keep total restaurant operating costs at 85% of sales or less. Currently, in the high 80s, it will likely have to double its restaurant footprint before scale really kicks in.
I’d say KRUS is a value trap.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.