KRUS - Earnings call 4 2023 | Kura Sushi USA, Inc.

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Operator

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Kura Sushi USA, Inc. Fiscal Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note that this call is being recorded.On the call today, we have Hajime Jimmy Uba, the President and Chief Executive Officer; Jeff Uttz, the Chief Financial Officer; and Benjamin Porten, SVP, Investor Relations and System Development.And now I'd like to turn the call over to Mr. Porten. may you and you, proceed, sir. Thank

Benjamin Porten

the to and I as over the evaluating our of the to could will cause of you our reconciliation useful in uncertainties nor operating can results to that part operator. for financial all Reform financial in in numerous today's X-K joining. be I would you, our Jimmy. of Relations materially substitute more for our forward-looking SEC filings statements fourth out release. section. remarks, our These XXXX. to future need a performance. therefore, Good should the of are could risks we are with of we will www.kurasushi.com have has afternoon, under our which all you fiscal everyone detailed also the It can that non-GAAP begin performance, like earnings we XXXX subject These impact earnings guarantees discussion condition.Also turn isolation The refer measures thank actual to A a and what believe presentation and and include them. you quarter found in that our By statements also formal differ not that call, Investor statements the for be GAAP, we SEC.Before of the future to of We at risks to discuss remind in the today in this Private release.With Act expect. everyone, access not additional Thank be the results now, forward-looking information way, release copy should defined undue as put certain not everyone results included to on discussion to measures, during been and comparable from Securities call are we Litigation considered of should reliance earnings available submitted prepared GAAP accordance

Hajime Uba

very to Ben, with announce and you Thanks, we that thank a I'm another year fourth everyone joining closed great quarter. fiscal us pleased to today. for record-breaking

for operating full fiscal a our the prior profit G&A basis [ number million discussing points full successes most translated XXXX like unit year restaurant-level to fiscal year.Our quick XXXX, year-over-year $X.X $X.X grown million margins beginning year G&A operations, year.At we we XXXX, our of openings new rapidly over as would ] large in base in dive XX from have against to incredible and unit basis the restaurant have fiscal profitability. the XX in points of recent XX.X%, of goals our all quarter, leveraging fiscal fronts these full mentioned to maintaining achieved we what base. on of the the improving Before into major in have openings leveraging our recap new increasingly XX excellent X years. to we've over absolutely year, proud our grow improvement a AUVs These demonstrated continuing had record to I'm our by and to I depicting success of report restaurant recent

total XX% Our quarter were to fiscal fourth growth million, concerns fiscal from single ever XXXX growth in guests XXXX, Kura ongoing EBITDA the fiscal before. are in spite traffic being comp. with of $X.X of of environment, for for than representing X.X%, of of growth our million coming in Sushi In sales adjusted $XX.X deteriorating more macro rate a grew a year.Total responsible X.X% to over sales comparable $XX.X million representing a

levels. Our traffic is absolutely outperforming prepandemic

both and fiscal as of we million approximately have traffic X.X%, the and year our continued of total enter the improve. comps with in pleased branded be October for revenue to costs to continue with performance new months.Commodity quality $XX.X We of sales September

XX.X%, operating of we the XX.X%, the during Our held prior representing Labor had is XX.X% at prior a year over reached sales quarter expectations a improvement of basis of basis previous an margins XXX percentage point a XX as and earnings a point costs the goods as improvement the of improvement cost year profit confirming a the high XX shared quarter. over sales of basis over steady quarter. have all-time percentage sold point to prior sequential call.Restaurant-level

San Framingham fourth a total we Dorchester fiscal opened in and Island, Massachusetts, XXXX. XX Jose, Long quarter, York, new of unit and our X During restaurants, in fiscal New for California, openings

ever.Since app resonate New continue country.Turning new positive. the our through expand uniformly announce under York, new another we Kura currently already construction. year, to the reward happy Pittsburgh, to wonderful new better as I'm in Florida, program Tampa, X on across been markets front is has entering Our we've in initiatives. and the units, new X been units new opened that to to It's fiscal development see Naperville, launched with than we Flushing, momentum and Pennsylvania, response mid-October guest the very app Illinois,

us new new would our our reward experience, as [ to to in and guests the has great. team, response completely growing unlocked program significant what's than customer for very usability have new nothing repeat as more the reward due In improvements short delivered.The be joining weekly the comparison, user that app segmentation, see existing registrations rewards with exciting rated our you'll be a Google of has marketing to new top of are our targeted sales lacking. highly clear, meaningful the our and the such app and progress that But effective with has on has app, potential since excited users this ] number was of doubled. To platform on of unlock migrating download to While completely our are expected the marketing accounts, with XXXX. new able in app in not Play to existing are visits, implementation been users the its call of traffic has on is I first app users the made. in-restaurant we Store immediately launching spring expect that from these guests. encourage and our driver to but is new difference app quality.On new extremely continue engaging really that improvement its encouraging new everyone their I'm of improvement previous robotic very ] potential.Development we ways the learn [ as by to be guest Japan many the commenting App will this in the been visual the dishwashers for for its our presentations Store and opportunities new rewarding

to Following implementing able the this we'll in process the be for U.S. pilot, certification dishwashers begin the robotic

work and labor expect to in While in during this we to model brand for a deeply future the us I'm we to robots our liquidity. to it guest for corporate what I'm have these a opened impact stated collaborations on Jeff? as in results meaningful support dishwasher slowly Jujutsu and Jeff collaboration for be so current expect has have we restaurants.Our we year, is discuss our excited impact see year.And earnings pipeline do response center that, I'll and our upcoming years, strongest continuous one had amazing to financial expect another ramp past XXXX, limited grateful by fiscal and at up hard call, achieve the our can to with members we its yet. team will as newly and dishwasher great our do fiscal implementation of robots our Kaisen not setting over at our restaurants turn IP

Jeff Uttz

Thank you, Jimmy.

to quarter. a This an quarter year as administrative a a of well prior costs as and by by sales were to XX.X% $XX year general in On regional prior sales compared percentage G&A California of of expenses For full prior year as total XX.X% year X.X% percentage due XX% in created performance period. quarter, of sales efficiencies commodity to of due percentage costs percentage a XX.X% leveraging greater compared cost decrease the as increases.Occupancy related and sales prior sales decreased the to XX.X% initiatives implementation largely million and offset growth sales XX.X% year year of traffic now pricing, in Comparable represents This the number store to with of in the which to from as XX.X% to X.X% quarter. and as decreased of costs. and compared the as the XX.X% same the million percentage of in as year incremental prior associated with of as XX.X% as from to to increase to stabilization X.X% Texas.Turning XX.X%. increased due prior expenses to period period. to wage of positive and were to in XX.X% compared marketing as year's prior in year to fourth the inflation. pricing of a decreased in costs for inflation.General as was compared and an the dollars comps the as compared to beverage sales Food XXXX quarter, over fiscal largely prior openings costs is as G&A related X.X%. comparison, compared the were expenses costs a percentage increased increase and Other restaurant to compared was a XX.X% and sales XX.X% a $XX.X the of year technological sales sales Labor quarter's

the of quarter.Turning provide year million like and fourth Restaurant-level per million to was share compared With $X.X At equivalents the quarter. $X.XX prior we million guidance in $X.X results cash leverage in quarter, the to and or diluted XXXX. $X.X $X.XX tax now of prior in pleased as $XXX,XXX to million of for the leveraging $X.X for EBITDA year XX.X% cash in fiscal or had key the prior years.Operating the of per lastly, million quarter. we income coming profit our expense achieve compared liquidity. to of was with in fiscal year million percentage cash to prior was a following income as quarter. share, I'd in income compared Adjusted goals are was income end XXXX, and no operating to $X.X of compared year fiscal to million and $XX.X quarter. being was debt.And prior fiscal compared Net year operating expect very year one in the the net our the Income $X.X XX.X% these further G&A to sales $XX,XXX diluted the

sales million. total $XXX to between and expect $XXX We million be

to unit We expect expect sales $X.X expenditures XX capital with per turn to open to earnings last between have percentage the approximately beginning longer of that, our we with no call over a million. and with year, like over units, XX the communicated average quantify will as administrative addition, And performance.And approximately XX.X%.In of as expenses we next general back I'd and we quarter-to-date Jimmy. net to be call,

Hajime Uba

Thanks, This concludes our Jeff. prepared remarks.

any happy please questions Operator, We line are questions. now the open for answer have. to you

Q&A the into during reminder, my session, I a English. your in may translated As for Thank you is Japanese answer attention. response before

Operator

Stephens. The from first Long comes Joshua question Instructions] [Operator from

Joshua Long

driving the before But terms us we of and Curious over that and early as kind awareness of trends of July the you've we some how fourth previously initiatives June in could kind and/or XQ fiscal that trended And traffic you August? in saw XX% range. if been remind that about you 'XX, about of you in quarter brand think then talk about your through lapping think curious of the we're through how talked trends in what that you the working had almost can kind tool? on the here

Hajime Uba

Japanese. Sure. you in answer me Thank question. your translate.[Foreign allow you, first Ben, Language] can Josh, Please to for

Benjamin Porten

this Josh, Ben. is [Interpreted] -- Regarding

comparison were been since pleased. against campaign. most the June -- we little difficult rollout that of the And And XXXX We conditions first going and I'm We we've easier.And for among comparison benefit XX%. for we August in call, earnings if very comparisons, difficult sorry, we were made not the the XXXX also full costs in the public. had the operating of Regarding X XXXX, prior were had different QX we of had making the comps, mentioned which a July Slayer XXXX, most as Demon time QX. in the in the were initiatives up for so --

X.X% that or have last traffic we and year, have positive positive For achievement. from comped so us quite to an in is to think hit over X.X% XX% traffic fact in

these very And so we're with pleased results.

Hajime Uba

[Foreign Language]

Benjamin Porten

did we -- anything were didn't [Interpreted] you Josh, Or any have question? did your I address? -- whole that answer there

Joshua Long

partner the offer I brand kind broadening of that. are collaborations. I just appreciate or your Curious forward, of early performing context a then in additional done mean, for any with XXXX? read And great you of thinking how could you've brand and awareness some terms the job of sort of those

Hajime Uba

[Foreign Language]

Benjamin Porten

mentioned Right collaborated which to that's a you traffic the remainder brands going comps with strong would do most with was is been that for to now, us while as been so the call, part I we we're pleased. XX% has lift it. and the we Bears have our can't Kura disclose say, popular collaboration Jujutsu a very that pipeline up. a is anime And certainly, with Kaisen, perspective. have, And coming how last very positive [Interpreted] from earnings have year, ever the very for well.And I full of the with current the exciting before, lapped working certainly of a Bare collaborations big was, We traffic, we've IP that mentioned just In

that excited the And fiscal extremely we so into further or quarter as on I'm sorry, I'm year. get updates the -- you give to

Operator

comes question next Jeffrey Barclays. from from The Bernstein

Jeffrey Bernstein

questions. Two

wanted you weeks the was basis, perhaps First, went to change full think if or you the that as weeks. follow XX% order can X the more to I flush XX% on whether is X- the for just it and X it it because a difficult. does to trend. first X look X-year at trying at along, sequential seem trying out the out for did like it, comparisons Totally lapping I pretty in share multiyear that quarter, comp you just it trend and flattish think gauge you you comp a I'm on Just close fairly however difficult But on a to got quarter the was all or up said stable? a comp in back to the the get the was basis, a running the slowdown whether extremely sense actually throughout comparisons. you're flushing appreciate a quarter in

Benjamin Porten

particular, Yes. Slayer On July exceptional. and a multiyear Demon in I was unprecedented really say brought us. really August, which for collaboration, would basis, that traffic [indiscernible] the had

Jeffrey Bernstein

share figure the can to Can last we X- to in year of of out you terms be of you can able X-year, gauge? them kind share -- monthly kind so that was just numbers and how

Benjamin Porten

but I I don't you'll you them have in me, calls, see to the archives. able front believe be in if earnings past of to our go them

Jeffrey Bernstein

whatnot. inflation, whether Any those basket for great. ultimately or desire pricing in margins restaurant items offset flat? would to ability 'XX? have what you're in in appreciate top you're the fiscal from gave margin a each margin my perspective, and question on line was thinking can anticipating wondering terms and just the about then leading the I and the second and of earnings, how revenues But Maybe hold looking of 'XX? an fiscal thoughts think commodity presume, you be color key pricing to And of and Okay. forward on you restaurant I as I that mean line give the any margins terms labor we guidance units flow-through to you much the to

Hajime Uba

[Foreign Language]

Benjamin Porten

just double-digit we'll But handle we past we've that really able sort pricing been to in earnings reflected that So digits, in pleased Jeff let labor in that's very which mid-single down is inflation. discuss made been to our [Interpreted] year-over-year we've to decision moderated be July. We're seeing to labor, that mentioning call, of say about commodities.

pleased We're restaurant-level calls, X% And that we the very anything took relatively substantially year-over-year. reflects basis labor on with operating with. to year only we're price XX pleased that the earnings very grow XX% we But the have increase an profit actually environment.As really modest points in X%, exceptional is anything about past mentioned lapped something over we that XX% to overall know margin. you As offset we've this is the that. bullishness

Jeff Uttz

COGS terms about it's and done the And Jeff, Yes. great. last now, never the high what we've the said and it's quarter, encouraging. just response past really basket. this forces the to we've What very line, We've to but happy number in Ben to also to are doing operating cost Jimmy margin. a not deflation In slowdown seen red is calls, Jeff. on And sequential increasing as the X number I'll not price taken very we seen saw other quarter-to-quarter a that's not add even historically think really wage we're number, well. we've I'm and what I've going to huge or what that we we've in only continue it's slight been said increases XX% business. profit, really going forward.In but chase it going increases our year-over-year us up. is a X When number of price do of Not restaurant-level in taken has minimum out. report to -- that outside

we're trend got chain And that good has that. that, department, to we'll going So really and we've continue promotions confident -- I'm some well, negotiating pushing in on continue.We've is happy. people supply some and made gone the forward some really our

I'm bullish on fiscal our forward to So this as COGS through what year. on move very we're see going we line

Jeffrey Bernstein

quarter it. wondering you already new if to I talking did share Got well, markets? units. XX just just and could -- think maybe know your versus about the you're clarify first in X in can quarter, unit perspective. existing openings about lastly, from And but you I how the a if just I'm XX you openings opening by those

Hajime Uba

Language] [Foreign

Benjamin Porten

that the typically we terms we've we just construction. So the the have are on further stages of but comment X to in isn't openings don't construction, need opening earnings that of X in given stores, sort in of the QX. it. majority expect calls, [Interpreted] this discuss units cadence, We that we early in The something QX under opened already

cadence new the out existing in slotted will of be to units our remainder XX% a from can for pipeline markets. split. our relative markets terms are So and XX%, I guidance.In versus shift fiscal of from you sort represents historical of that think existing, XX-XX about the the 'XX from back the new This

fewer Just now, to [indiscernible] enter. there given are states in XX for markets us that we're new

Jeff Uttz

spending regional as having our the further thing And that to have are so not to about in going that. on are G&A and much area it one not up much far And for stores areas further geographical that's existing opening road money efficient make the where not even in really much restaurants our managers, help line. us more doing they and is on travel more markets as G&A

So be to we're to potential things G&A the some side of excited the corporate see able leverage on versus side well. regional as G&A

Hajime Uba

[Foreign Language]

Benjamin Porten

[Interpreted] sort of XX you -- Relative X to under got construction. to we've Just out units by might discussion. to unit opened guidance surprised and have X been when our the XX we've close growth being already

And -- reflection really, on might wondering our with environment more You is the the we call we've been that just this people getting are operating growth. be the in might why aggressive a of period last anywhere XX stages, openings last years.Construction itself up but pop months. -- unexpected delayed we've have from to hurdles which -- from the the in weeks the very final is stable, seen construction

to And There's upgrades permitting. opportunity to XX upside, for in shifting we we're just excited be calls. in so earnings of and ample smoother. especially do reflects believe the subsequent and But updates XX provide uncertainty to very hopefully terms that

Operator

The Citigroup. comes from next Tower question Jon from

Jon Tower

a clarification a and First, then question.

if mentioned I bit I plus X-year curious the that, Maybe basis, And Jimmy, a X.X% in your to you're be a clarify. to a that October that the on as multiyear running so, experiencing. think, on of you slowdown on wanted range. comps basis misheard slowdown also would well. I'm think And gain I perspectives curious, Just September, a but

Jeff Uttz

is good Jeff. to talk Jon, Yes, This to you.

to seen, huge might door. a that things terms what do. having that to soda which we excited do economy of getting a having. on we a the the really people comps want is expect And we somebody certain several choosing offset the traffic we we And the getting people, we're that is dining come And the and traffic. door to positive in we're believe weeks. going listened ordering But on an winning if the or that about, the that come to back battle. most to what what few we're and of Kura. may to comps. been is people be And from in going one go we believe is we're last believe coming habits, or a so the when we're side battle that's is In to that when having their push continue be to have calls focus expect we've it changes concepts of what like are comes that ordering do showing conference will more us in they increase And can't tea that door. continue number.We they like not over have you keep companies they of And hopefully, all that fact we're continue. proud a some feel to make traffic the of out other And control all people item, that through part people by And will and you the going

continue So we're going is number. what to push traffic that that's to

Jon Tower

it. Got

but occurring right check in now. are So little are seeing is frequently management it the is than that before, of management albeit business check coming back, from the consumers bit you more a

Jeff Uttz

bit. little things. And it's A like small add-on

is So guests for our changing not plates sushi dramatically.

have coming at meal I to be maybe or of instead like said, or that. in somebody may like still small a door. of tea that, have I water their people something happy said, coke economy the not they We're an But through are a or the is end So won't we're have with dessert which, like like a in. expected a

Jon Tower

if of any you problems again, new give actually units, you of locations?And development historically especially having about the risk and the the are is actually an on not some but in know those on Got at of But can how new are had that some I of cutting others your there's locations of developers short with Cool. to exposed you you portfolio that kind side. opening maybe potentially I in than idea kind just not been potentially... us developers side what potentially And discussion, first-generation lines potentially about seeing yet, then you much development or some seen. know hit it. at therefore, talking permitting slower putting industry of or stores so, your exposed with problems risk time

Hajime Uba

Language] [Foreign

Benjamin Porten

[Interpreted] Yes.

a So was just it's to be we or permitting pulling problem developer opposed but that's referring LOIs on We've clear, foreign of to us. because able under were pipeline, to entirely that and to construction. to that rates sideways X on the really maybe nothing go certainly side. be fortunate to say our more uncertainty seen certainly We're X fiscal in anything as interest out, the developers nothing -- 'XX this really

so hasn't an us. issue for really this And been -- yes, it

Hajime Uba

[Foreign Language]

Benjamin Porten

many saying been by One they've a officials that the a advance, built with after construction, Yes. come make is in in blueprint major permitting new had we kind actually, to odd and these late which need that [Interpreted] and this months seeing after got is, issue to the adds we've blueprint obviously approved the restaurant, of the problem is I wrinkle we us, very openings. -- weeks the changes, you for

really sea legs. our But plans, been we've uncertainty come from pandemic, maybe result yes, and as turnover that which think are never to layoffs are oftentimes, end.And always when just above things, code frustrating.You seeing, they the things that's been before. it's and a way this getting -- their the of were to and it's approved they're and still the that that's what anything the of developer's in and are beyond not employees new part sort so so probably seen things personnel some is unfortunately we've of want And that of there maybe us additional code, do that managing

running the sure time this, are why to -- but from not we're we're they're time. into that doing those So

Hajime Uba

Language] [Foreign

Benjamin Porten

[Interpreted] discuss way human through, with before could recourse, get online portal these the to and are gone we is only in talked be And where is really online portals open just now element not really things have the contact to whereas no people of it. sort

year. the that's very upgrades yes, a growth. on of XX XX development like to do be that... very give to much strong And we midpoint earlier, a expect we unit to said you And do hope we able XX% been But so the change. Even updates is and

Jeff Uttz

we're to other the pipeline Our about strong, that XX, no strong. in being really under the talking meet to pipeline but And call. than X any that, is concerns it potentially, and the that Jimmy not very guidance. have And a said, XX our talked the given, raise guidance about is beyond able further Ben construction we've future we Jon. And like hopefully, about

Jon Tower

to Got comp appreciate from the it. in rewards through as the bit that you this I'm I rewards any is revamp just headwind redemption, added and of thinking to how guess, a you've you are But I -- it. mechanically, And of uncertain sorry, -- are then going revamp, anticipating mid-October? anticipating impact. in terms

Benjamin Porten

should on a If why not headwind. a be focused It we've it. comp been comp be No. that's will tailwind. I it mean anything,

Jon Tower

from making like into I going windows. its that's of perhaps what piece, frame Cool. maybe sort that of way in could then costs at at CapEx expecting least encouraging. be idea point know be, And then just an some and future this incremental savings you 'XX you're the of robotic last you from to to us any it's time? if sort hear here that Glad give over the standpoint? Can labor might a And dishwasher

Hajime Uba

[Foreign Language]

Benjamin Porten

the it's pilot still So [Interpreted] still -- model. we're

really I and material for clear. to between in an the changes to model changes we're are materials there But it. excited so a the model. really us it's mean, extremely It's the going be low probably the robots to dunk slam pilot about be versus bar and And the ROI, production for mass going

Jeff Uttz

the impact though, because the important any is second it will kitchen. dishwashers or the terms don't efficient thing year most it the in 'XX are labor because fiscal for be our that -- this be new to be started to take note is on units And beyond. units things it's in Two we in won't of part existing robotic going very the space remember, only then expect to

kitchens. So be be these retrofitted existing likely not to most into able dishwashers our

So we'll start doing new construction to start.

Benjamin Porten

additional impact. labor on needs employees of which that This to our in now, And would have with retention. employee restaurants, employee be as lessened provide full-time we helps and our to X the full-time for color would labor one well, most Right the reduce as burden working dishwashers.

very and rolled X those it's be is in going still we than that calls And we initiatives combined, out the earnings think past the so we all that. in that believe to overall around, exciting.We've mentioned 'XX impact fiscal greater

Operator

Jeremy Craig-Hallum. The next from question comes Hamblin from

Jeremy Hamblin

on just to embedded sales terms strong back in same-store in sales the a within of the that you implied X% kind sure to Congrats range? understood I guidance what's Is the X% I the to that? range it And that want make year. year. like for of provided, to come

Hajime Uba

Language] [Foreign

Benjamin Porten

don't we So guidance. comp [Interpreted] provide

to ample impact of we're And so saying, on as we have we our can't opening provide units it that go revenue which that well would XX guidance now. as to as that our opportunity stores guidance before, as to XX revenue mentioned But And right are. XX beyond the we well. we're there's contemplates number that concurrent for a really XX the the get into comp what expectations internal

And lot to look of year. for this we've got so a forward things

Hajime Uba

Language] [Foreign

Benjamin Porten

closing had fiscal a we as expecting we X.X% same the Just fiscal that year [Interpreted] aren't the 'XX. thing full for note, though, 'XX, comps for

Jeremy Hamblin

on then And question to a margins. it. ask I Got wanted here

location sprinkled item? And those do $XXX,XXX between, costs? preopening your over preopening what number the was. And understand fall average then the say, cost the cost in terms I other had line operating new occupancy and quarter. of preopening want costs to in they Or let's for operating August of other labor, kind costs in two, in are all you -- So per

Jeff Uttz

Yes, they sprinkled them. are between

X we year. XX, opened fiscal So instance, August very day for last store of on the our

And rent costs so the we've that's that -- falls month of had premises. that so, longer, would receipt labor the upon lot Otherwise, of the we directly the maybe employees and trading booking of a noncash on for that restaurant majority line. a that for start or be

new in restaurants makes for on QX, the we so have yes, Then days our QX, to their et to managers as can that's total to preopening the XXX we costs, expect country be rather all can be than having preopening as training, -- opened And won't open to And opening.And costs, in QX, trained do have to drive it are training, the restaurant cetera. the over opened already to over restaurants to so for those their they areas sense. to fly We there other continue where there's do X falling right typically restaurants. with QX we that's employees in and elevated travel locally. X further costs preopening before that And restaurants too, leverage the our so well same trained.

Jeremy Hamblin

back Okay. restaurant-level here want Got then I to to just come margins. it. And

your your costs expecting year. significantly needs where rates ask for about hourly margins in from comp question be In you're terms pretty slightly what where you to your restaurant-level like something wage to be in 'XX? up your menu It would it where down feel that of are June.Is is think expectations, like what pretty -- the good way. are in like food different under sounds for restaurant-level Let was margins? is your control, it flat you it do feel more a although the you pricing or What me sounds -- labor FY your

Hajime Uba

[Foreign Language]

Benjamin Porten

maintaining it's earlier, able terms something to decision for really be But our what to of to we operating terms macro And as provide as of and maintained think very to can't years, profit certainly, sensitive happy we've cost, for we're numerical in that restaurant-level very, So very to we advantage grow [Interpreted] XX% that that.In expectations maybe an we guidance the or the given a pricing this we are. mentioned ongoing -- have potentially seriously is traffic growing for have to us environment. element, about. sacrifice be the that further us there's margins

dishwasher does limited to and in the But that's do the -- store restaurant-level be the us operating margins, as not several of to basis. needle. profit going we such on I to us the terms think up really to going before, next quarter-to-quarter and have really fiscal it's we basis.In mentioned serious to significant 'XX, for a lead, traffic opportunity new to have the For not move impacts just sets years a be

excited be we're a ramp, slow going is for. very it's so that concrete And but that's something to that

Jeff Uttz

putting costs will don't time get the said, like leverage margin also, the there you need that going operating same And that But we'll I as quality But sales, we the line. we we're and we to on a and come -- be we of piece food a like dishwashers, want really at initiatives can't know, on to under increasing the in the really point impacts. have we're fixed also, some the the you leverage prime place with where think of point to and costs play quality, too you really are restaurant-level in careful, to biggest that the that have the get we when XX% from becomes there. the will quality costs, food much cost and on get compromise margin compromise to the can't service

Hajime Uba

[Foreign Language]

Benjamin Porten

[Interpreted] Yes.

So try very and restaurant-level Jeff have XX% could would to that mean operating traffic. and makes profit an a really on good achieve certainly be we impact I point. margins aggressive

Our strategic is profit leverage that grow margin grow restaurant-level to traffic more and fixed operating to preference use and cost organically. our

Operator

The Zackfia Sharon next from William from comes Blair. question

Sharon Zackfia

in of last about horse comp. going the talk to September lot kind think, beat a and comps do October. more that just sure I'm the I'm saw of not that my heard I in companies XX.X% quarter-to-date XXXX. I you seasonality, we've And of like year, have in X.X% dead were, in normal up and notes

in guess have followed in a slower we're apple rebound comparing of of September, So my kind and which little I an others more by trends you question traffic of bit an year-over-year? what maybe have October is, seen, a orange seen was as

Hajime Uba

Language] [Foreign

Benjamin Porten

as earlier, the and industry, everybody to factors. So that, that the to has October able deeply restaurant September way in by macro extremely seen been have grow we're mentioned did. influenced [Interpreted] Jeff been traffic we pleased And considering as has

Hajime Uba

Language] [Foreign

Benjamin Porten

that a would So days had little XXXX. weekend considering just there be a One we September. October [indiscernible]. couple versus relative those, October was are more of to But factors [Interpreted] in prior favorable the year

Hajime Uba

[Foreign Language]

Benjamin Porten

sorry, did. I'm didn't so October others same we really the was that [Interpreted] yes, the -- thing see

was October. between not different and September performance that Our

Hajime Uba

Language] [Foreign

Benjamin Porten

[Interpreted] certainly it's but you if didn't Halloween in favor. our didn't is of bit pretty a a much Yes. favor, October yes, or work And the But favorable, X work everything, in the then timing not months. control between flat little anybody's for big difference

Sharon Zackfia

Act, other moderating. had in they know was it that be hear broadly remains. wage for you're still then that California extent operators to some about full-service And FAST inflation but aware by just impacted limited some in the more we've And say not of I directly good service. Okay. an impact to that But expect rates highly labor California your concentration of I'm to outside

what need not how So California? you or environment? in do in wages, curious next to what would your perspective And on to approach spring if how that you may may raise is pricing need -- you

Hajime Uba

[Foreign Language]

Benjamin Porten

for [Interpreted] to minimal tailwind in us. So this. have the address to be Act FAST asking from impact is opportunity fact, we believe thank or we We us. for to a the were you really hoping an But going --

is reasons And so be a think why to actually benefit. we through we love we're go this going the to --

Hajime Uba

[Foreign Language]

Benjamin Porten

peers Act for be the doesn't a to would comments X wage as even employees to our And the directly California wages have know, about the -- $XX relative knock-on you're that. factors at you made effects FAST that competitive considering or us. apply minimum So first [Interpreted] the making

have not to raise we're it's like so to to And going wages $XX.

a we're really -- it's that is emulate. else have are us.Another initiatives tech we unique anybody that -- thing very that's that so something Kura, so specific reduce for in to not headcount, to these which could driven is really consideration not And we

as up paying think lastly, wage, aggressively they'll they're $XX so the or a And us have prices. so us.And currently out this to -- advantage minimum catch QSRs I from makes $XX is for raise this competitive need to

the meal only And shrinks, meal and a Kura Kura of and so the price value appeal as QSR between a grows.

think And ultimately a as traffic so could this catalyst be well. we us for

Operator

from The Instructions] comes next from Mark [Operator Smith Street. Lake question

Alex Sturnieks

for Sturnieks Alex is This today. Mark on line the

are any this on into Just but increases new firstly, quarter? you anniversary walk and us the might you that could through increases have you it menu comp? increases or the already, built touched that And price

Benjamin Porten

Yes.

about was price effective QX. the in was XX.X% -- So for

As of X%. fell July, we X% by off offset and that

was then I'm X%, June and XX% since. there's no July, -- so sorry, and And were August been change September about

Jeff Uttz

So December. be lap X%. first X% on QX we'll the all week will of And

[ the top of starting our we'll in December, beginning So at ]. only -- pricing have X%

Benjamin Porten

commodity of to inflation is Right. offset actual And we're reflection just the coming the but touched we on as our environment on off seeing that as labor front. that we this X% earlier, the well the bullishness fact X% took really that on a only

Alex Sturnieks

Yes. there. then Perfect. just And That's good question. my last

guys the to other looking improve initiatives anything You dishwashers, automated collapse with app, guys tech your could areas guys but have to experience, of you are updated the at any the customer leverage you there?

Hajime Uba

[Foreign Language]

Benjamin Porten

are billion there Yes, fruit of couple that come low-hanging But [Interpreted] things. a to mind.

we list guests the first that yet. impact, to is communicated haven't to The wait upgrade our the really the

benefiting they're of not but they're so their behavior based from And changing it, that. off

that that our is what right if if you throughout I you're technology orders restaurants, And to now, conveyor year. to the from progress are over been to place your friend sure table. cellphone, order be as one go. ].The so so hit that's It's And the will panel. the I we table, and And things people so X of you this your it those can with I'll X there don't be for talk able directly this that we hard things aim that's that about I'm just of more to you allows of that your don't other ready the know but you've at [ have matter have reach I would many I on reach have rollout.And could we belt have to if be a outside technology. to share the to

Operator

from JP Wollam from comes question next The Capital Partners. ROTH

John-Paul Wollam

lot maybe -- you've you're just -- new seeing Can on in call just trends you of or of I any openings, with so. the the any about reception maybe First, and a if we there you're when just latest talk seeing openings, new last about really months a differences development. cohort or of are could start anything it, units know the these we've of lot seen kind open? kind X talked new But openings? of customer maybe terms

Hajime Uba

Language] [Foreign

Benjamin Porten

confirmation [Interpreted] in have to the been than pretty very So I'd fortunate, been anything we've In fact fortunate strategy to United we've States. been say how we've it's great. that just X able over really discussed rather the months, openings last much all the was be earnings past noticing a what say our is approach that growth across an really calls, a non-continuous new, correct. taken

on that location. Fort Jersey we're [ market Boston, Lee entire York, New strength the us. ] talking East And first Coast location, first The been great about when our really to has Northeast was we've our New DC. Philadelphia, out that, filled of

and it's -- more that those obviously, having once with been that's markets. see makes strategy to out Pacific us that been in the build Bellevue, markets, not indicated be just built much so great other out.And really yet, excited And pan Northwest we such as about our start that to

Hajime Uba

[Foreign Language]

Benjamin Porten

expectations Orlando, really have not being both in and are them Bylan slow its ], from the recover to spectacular. in which is opened But [Interpreted] [ past X And calls, prior Aventura and in units, to one doing we've mentioned to of Tampa pandemic we one the more and in subsequently, we performing opening.

We -- think is huge site. specific great see market, for it's the is Florida us. just Florida issue that to really not growth opportunity with it's So one a as really a but that

John-Paul Wollam

there's some And you've or how some how ability optimize helpful. of to out that you even a whether kind joined ask, very help started of could you opportunity take to G&A as give your more us then really of Great. of if feel, just where forward, of you either when I feeling I costs do as you And of regard? kind as just could the Jeff. first turn of to are the kind where kind of of could the that kind and follow-up, maybe we with whether that's guidance percent is, sense Yes, as revenue, guidance Kura about a business? maybe or costs want you far from one pushed of go you the XX.X% on

Jeff Uttz

opportunity. There is Absolutely. more

XX push that's that. was our very could this the have see of team. my what first you I'm to our fiscal compliance. for continue we've exceeded was first from that on. done. this a we it I've very that X So that they've going expectations I'm we the This and -- hires headwind will 'XX really asked with was our G&A our what year proud to I'm when goals could proud in of year proud my happy can based That year in. company on year. all I -- top department the to the more become everybody full for did answered they efficient. do And leveraging bps back what of be things what And to and they came lot me year. and G&A And G&A in reduce bell.And as projecting leverage. slight XXX(b) guidance. year to to and I'm And we're work either see we're really 'XX year, asked do on more, Jimmy is It stepped of this One the heads up expenses, fiscal

will. at the get And company, but know at And digits is on company some I beyond, we're that, time that going and some leverage. down with little a can public the we're ready we it we see line for guidance. have And fully going year, we're as to continue you see our then I this 'XX leverage no cost it. But future even to sure increasing point, by point. bit. single making our on into fiscal So working that, we're have [indiscernible] to in

Operator

have question-and-answer your This conclude And we and does the you very of gentlemen, conference. you. session. Thank disconnect us, reached may much for Thank joining ladies today's the end now and you lines.

Kura Sushi USA (KRUS) 8 Nov 232023 Q4 Earnings call transcript