Kura Sushi (KRUS): Restaurant IPO W/ Playbook For Success

TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence. 


Kura Sushi – Business Description:

Kura Sushi USA Inc (Nasdaq: KRUS) operates revolving sushi bar restaurants in the United States. The company’s restaurants offer Japanese cuisine and a revolving sushi service model. It operates 24 restaurants in five states. – TIKR.com

The Thesis:

KRUS is a patent-protected, technology-first sushi restaurant. The company offers high-quality sushi at low prices thanks to robotic rice makers, automated dishwashers, and a conveyor-belt delivery system. Such technology enables KRUS to offer lower prices while maintaining strong operating margins. KRUS flies under-the-radar of most investors IPOing around $150M. Its parent company has over 30 years of success in Japan. We think KRUS can grow into a 300-store empire generating $50M in annual FCF.

Unique Dining Experience:

Kura Sushi USA is unlike any other sushi restaurant in the US. The food comes to your booth via a conveyor belt. There are no waiters/waitresses to take your order. Everything’s done at your booth via monitors. Diners also receive in-restaurant rewards like prizes for ordering 15 plates of sushi. There’s also a mobile app to track your Kura rewards ($5 coupon when you spend $50, etc.). When you’re done eating, simply deposit each plate into the installed plate disposal mechanism at your table. Each plate travels into an automated dishwashing system, removing the need for bus-boys and additional staff.

Technology-First Restaurant:

We know about the conveyor belt, rice makers, and automated dishwashing systems. But there are two other facets to KRUS technology that give it an edge. First, each plate of sushi has its own unique barcode. The dishwashing system scans the plate and records which type of sushi you ate. This data allows chefs/rice markers to optimize how much of each type of sushi to produce.

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Brandon Beylo: Student of value investing for over 13 years spending his time in small to micro-cap companies, spin-offs,  more

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