Kura Sushi USA Faces Margin Pressure and Lowered Financial Outlook Amid Tariffs and Expansion Costs

In a report released yesterday, Andrew Charles from TD Cowen maintained a Hold rating on Kura Sushi USA (KRUS – Research Report), with a price target of $44.00.

Andrew Charles has given his Hold rating due to a combination of factors impacting Kura Sushi USA’s financial outlook. The company is facing a significant margin pressure due to tariffs, as over 60% of its ingredients are sourced internationally. This international sourcing exposes Kura Sushi to a 200 basis point margin headwind, which could increase to 280 basis points without mitigation efforts.
Additionally, the increased capital expenditures for new store openings are expected to weigh heavily on cash returns, reducing them by approximately 500 basis points. Despite the company’s proactive measures to boost customer traffic, the forecast for positive comparable store sales in 2025 has been revised downward. Consequently, the adjusted EBITDA estimates for 2025-2026 have been lowered, along with the price target, now set at $44.

In another report released on April 2, Barclays also maintained a Hold rating on the stock with a $75.00 price target.