Shares of Kura Sushi USA, Inc. (NASDAQ: KRUS) are soaring 5.26% in pre-market trading on Wednesday, following the release of its second-quarter fiscal 2025 earnings report. Despite mixed results, investors appear to be focusing on the company's robust expansion plans and strong financial position.

The restaurant chain, known for its technology-enabled Japanese cuisine experience, reported total sales of $64.9 million, up from $57.3 million in the prior year period. However, comparable sales growth was negative 5.3%, with a significant decline in traffic of 8.5%. The company faced challenges including inclement weather in January and February, which impacted performance.

Despite these headwinds, Kura Sushi's expansion efforts and future outlook seem to be driving investor optimism. The company has opened 11 new units to date, with another six under construction, maintaining a 20%+ unit growth rate. CEO Hajime Uba highlighted a robust IP collaboration pipeline for fiscal 2026, including partnerships with popular franchises like Demon Slayer, One Piece, and Nintendo's Kirby. Additionally, the company's strong financial position, with $85.2 million in cash and no debt, provides a solid foundation for future growth.

While the company faces challenges such as increased labor costs and uncertainty around tariffs, investors appear to be betting on Kura Sushi's long-term growth potential. The market's positive reaction suggests that the expansion plans and strategic initiatives outweigh the short-term operational challenges in investors' minds.