KRUS - Earnings call transcript Q1 2025

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Operator

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Kura Sushi USA, Inc. Fiscal First Quarter 2025 Earnings Conference Call. [Operator Instructions]. Please note that this call is being recorded.

Relations we Jeff Jimmy and Uttz, Senior President, today, Chief President Benjamin call Vice Officer; Development. Executive Chief Investor the have Uba, Hajime and Porten, On System and Financial Officer;

I Please ahead. Porten. like to go turn call the Now over would Mr. to

Benjamin Porten

section. By fiscal be Thank operator. Relations first to also earnings the earnings It can joining. quarter at the everyone, can www.kurasushi.com have Investor you all SEC. and the the XXXX copy you, everyone thank access found release in included afternoon, been submitted for X-K Good of now, A to our release. be can has in

defined Before reliance of of the we could our not include and future are them. future We statements discussion These I need also statements detailed our as that our Securities put should undue remarks, will forward-looking our we guarantees of what materially part the refer Reform Litigation and to risks under remind These results SEC XXXX. conditions. are numerous all Private expect. Act of performance, formal you not today therefore, that statements on and begin financial a the could you that subject risks to discussion for results more from to impact differ uncertainties cause operating filings to of actual forward-looking

available the of earnings comparable performance. in for presentation with financial GAAP we considered and release. reconciliations believe which some The substitute measures, additional can not call, our are non-GAAP in of in today's results certain during useful evaluating discuss to accordance or measures Also our will we information GAAP in isolation be prepared be this should

Jimmy. would of over the turn way, With to call like that out I the to

Hajime Uba

for Ben, Thanks, thank you everyone joining us to today. and

basis openings. QX from able We comps significant and including XXX can't ] [ representing positive X.X% better pleased exceptional [ corporate controlling the strong control in margin our of results, in a adjusted be to new growth of of of are ], point amount demonstration the and new I'm think I year-over-year biding improvement can EBITDA the a XX.X% profitability. year-over-year. excited unit year we very to what

I'm extremely $XX.X to entire making scale even comparable was work leverage to sales our traffic. which we start into has it base. if possible we spreads the fiscal of that of put by negative of the quarter million our I offset X.X%, growth effectively and sales the continue we mix expect of team first Total for on X.X%, had with proud X.X% representing the as

a Cost including year-over-year, by ongoing pricing of of by sold inflation, the and offset efforts the compared XX.X%, year a as increased to improved result, to percentage restaurant XX.X% to fiscal of our of high maturity by sales goods quarter prior as driven Labor efforts. wet of percentage lining chain sales X XX% as supply fact points custom of 'XX market department. partially operational and were the basis due openings the labor

be this units [ Mayford back expect [ under of the We to Jersey in and have mainly was product prior remaining currently in due We but year's X units operating picture openings of majority ] to California opened XX.X%, margin first the new in added fiscal rated. Indiana. XX.X% City year inflation. [indiscernible] ] half with to for the X one to quarter Maryland, Rockwell, quarter, continue Onto construction, Washington, This to development. the

on our and new to been by call, market have recent how to excellent In discussed the pleased part are and excited our opportunities. share that be has we openings, subsequent last we we're performance [indiscernible]

and our Northwest to store. top of typical the opportunity Tacoma were highlights markets, ] particular, outperform in that the a continued X -- and California to in than expectations track Pacific X on Vivat [ DMAs the ] with Vivat which our discussed opening become smaller back have markets. our [ We

[indiscernible] strong too. say as to And performance as is that ever,

an As a into are DMAs smaller our [indiscernible] a us reminder, of significantly previous on lag than and market focused for U.S. or Vivat is the top any Historically, our a top presents as to openings. market around critical gadgets. the injury XXX XX XX site is test for section in the the it the around

cost success have always inside manage in markets. DMAs better smaller historical pipes growing it doing on opening just demonstrated will exiting the smaller cash conserve than our so fiscal market opening confident much in we us While given long-term rather potential after the field, on see maintaining potential, the returns. about allow filling overall We more very to headings us pace in has quality while impact been pursuing

Our of market goal proportion XX-XX and split the pipeline existing the coming new of over fit XX-XX make waterfall is DMAs, opening equation. up smaller manage to between to and to markets it meaningfully years easier some come comp new will

in as today. very do list, implement more cannot specific I'm pleased share new and as us front [ relations. we getting is the be significant ] fast give checking expected initiatives. our new to motor to will This investment to offer but moving -- a Maybe that February. Today, with test with time the currently not fit-setting progressing into guest system reservation scheduled experience

we cost eliminated believe system we system, systems and a of well for need as the With operation, [indiscernible]. the the as these a implementation is liberation fitting coupled with dedicated

bottom to to for X.X, the and new system, I'm with a X to lead use the Additionally, [indiscernible] loans to of very explaining much Mr. first-time organic which nearing to are of easier use we up list existing updated rollout with firsthand minutes Fresh along share to incubation job, how device guests. plans, is happy designed the push selecting the

improvement is mix labor we as an X.X experience. to And West so is to an rollout this and the opportunity U.S. for February guest in as a well. The begin well of complete, as expect tailwind

marketing. the promotions of and terms In

were of promotional not in patients for of collaborations. do the the we the the fourth any pigging Due from quarter, but collaborations QX excited we're schedule, comps second positive and extremely to supported collaboration have XP timing successful fiscal campaigns. by Our IB

the We back half have for the fiscal of year. great

high of place efforts down call. second the customer in have we collaboration last we fiscal discussed In doubling on earnings the full the quarter, are for

start, are an is Our to very to history and see encouraged excellent we off that.

Our comps have returned ]. positive to [ QX

in new us expected Kura's more opportunity even Our exceeding and openings ultimate U.S. have excited about the

control call. high to -- progressing our during faster Adjusted fiscal Indian hit expect initiatives EBITDA to share sets all-time quarter, of first are our margins an to smoothly, Technological our as and company-wide tests that have we results thanks the costs. next earnings for

to cohesiveness entire Kura my reference both thanks work short as I the team, The takedown amazing been all efforts support person center, under on our everyone's speed have would reiterate the of the nothing defined of like and Thank scenes. but [indiscernible]. you. to in

financial liquidity. With discuss and this, I'll the you turn it the results to over to

Jeff Uttz

Jimmy. Thanks,

$X.X was the $XX.X Coast in prior sales with were million compared in total X.X% X.X%, positive sales regional in period. quarter, market. our compared as year to negative comps million year For the the prior market West our Southwest first of restaurant X.X% and and period to performance Comparable post

in the Food as as increases Depreciation of prior sales percentage wage XX.X% was as the sales and Occupancy were increase a at restaurant costs of initiatives. labor Turning a and of and sales percent quarter's percentage Labor and beverage XX.X% quarter. of XX% a the related as to supply flat largely higher pricing expenses compared were Other as now XX.X% to to openings expenses largely compared in costs markets. sales and X.X% year a and chain to compared amortization a due costs cost at X.X%. prior to and related of This costs. remained year due XX.X%. quarter, percentage percentage to year-over-year were year year-over-year sales flat were prior X.X%.

General quarter XX.X% of the decreased the growing percentage $X.X operating and previously loss expenses administrative costs to prior $X.X was leverage. against base. million due in in leveraging a significant due compared the prior of tax as of in to corporate XX.X% a year to year $XX,XXX unit quarter. Operating to the as year to $XX,XXX an expense quarter G&A was mentioned to Income prior compared compared million sales loss

or million prior loss quarter. sales $X.XX costs. million as a Adjusted labor-related was the to $X year XX.X% was a a year compared EBITDA quarter, to greater X.X% due of in the to loss million to per higher $X prior in quarter, compared $X.X was largely to year G&A percentage compared a share the profit per operating of $X.X share largely loss prior Restaurant-level loss leverage. of or due in Net million of $X.XX

follow-on offering reiterate at in And no balance fiscal of for our end we $XXX.X we lastly, in debt. cash cash closed and now quarter, the guidance let XXXX. and increase fiscal ] Turning to to had to first our due is the cash I'd our [ cash equivalents and liquidity, million This November. that the year

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

We XX.X%. maintaining approximately rate expect and to lastly, expense administrative of net XX% unit an million. open X annual expect of unit of percentage intimately units with $X.X we average general expenditure capital above And sales growth of

that, to Jimmy. it And turn I'll with back over

Hajime Uba

This concludes Thanks, Jess. prepared our remarks.

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

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

Operator

Jeremy from Craig-Hallum. And with Instructions]. question comes [Operator first the Hamblin of line our

Jeremy Hamblin

mid-single-digit trends get your in into the as in little your on bit improvement just though and for wanted of comps And both to your on in It was Thanks a got dive congratulations sense better here. that? looks of strong seen I key a was to you It wanted quarter. results. I what markets. the mix what like appears you've in terms

not meant last think quarter. your I different pricing significantly was from

a the and QX. if to of throughout So you little see that I just then color color of maybe bit on a provide could cadence wanted

Hajime Uba

Sure. question, Japanese to Jeremy. please question me Thank allow your first But you your [Foreign in answer for Language].

Benjamin Porten

certainly, major that and of the the the successful Pikmin, IP Piece terms had we those with QX, One successes with X QX improvement over In had of campaigns. collaborations we very of the [Interpreted] were on tailwinds

largely you've mentioned, price/mix, flat terms In of pricing largely price quarter-over-quarter. effective is -- was as

of having example see that so -- make an reductions significant improvements marketing was way it of did any of Udon, plate what in of combo ups. labors. in been are morning. had those be purpose talking the every inside We've more Udon, as poll And pair, that we from And usual. the attachment and We've the been campaign perfect the which we to a our improvement we menu food-focused an to led talking meaningful scratch and mix quality called And without would a consumption. And fruits up this mix. really follow-up about

pleased And of mix We're some so in really we've to memory. see this recent best the seen is it.

Hajime Uba

[Foreign Language].

Benjamin Porten

the we of cadence, largely November for same And the industry. monthly month saw [Interpreted] was the terms the strongest in of as us. the rest

Jeremy Hamblin

you here noted just then a little And thinking fiscal change about Got collaboration you're kind bit your of it. packages of in 'XX.

of in related kind think question, lapping kind items whether for of a here year weeks. then And results? some and last that kind wanted You're get time impact collaboration in is kind year, that? to kind consumers right of shift any responding And you've same December really to on food or on the how of I premium not of just the Snoopy next in tangent just and But kind you peanuts of you of now, were calendar sense noted, this having as couple a going don't January focused got coming from have marketing. you frame,

Benjamin Porten

Sure.

to first -- me the I'll Let question. speak

comparison that certainly collaboration difficult QX had In in successful running peanuts, an we IT QX. terms which the not is are To in one QX. a most your of IT of true is and more the we've campaigns lapping we point, it's are collaboration,

difficult and to from And so is be QX, a cost is focus going delivering knowing profitability of perspective in on that that more it control comp regardless that our going to headwind. be

licensors, of to that's as characterize QX future hiccup just is on looking full and QX to growing the strategy. of boxes. -- we there the wasn't what all a really focused our don't our so we year in A we're terms one of a would simply pain really I to that of QX part in really checked why years, is different this felt have timing But And new of specifically. collaboration pivot we big as sort

prune Sort our fiscal of 'XX. as the we how into going same LOIs thinking

have so QX. we while for And won't collaboration a

IPs and think quite strong with are, pleased You've in how the store. quarters future I have seen in we really what will the results be everybody just

Jeremy Hamblin

having on a I question of then shift the kind a Got it. And this the the there's any get year just in sense impact, bad, of holidays that's what the expect or the good wanted December whether and not those. to impact, on you for into in or timing Jan. would

Hajime Uba

the answer I Language]. Can question? [Foreign

Benjamin Porten

a pretty but at the everybody shift, calendar else this just in were fact that late industry, came the are months. and into and treat April at along as of assume this much you the as January just given March December the so really -- month that of calendar shifts looking November, combined combined looking a I [Interpreted] month, lines cyclical sort what of those the we're how is

Operator

question with next from Jeffrey Bernstein Barclays. the comes And line the of

Unknown Analyst

of questions. couple A Great.

one, up The perspective. first just comp a following from

the saying to I'm expect positive think I quarters stronger your with guided the of ago, fiscal It seems like outlook negative mode, back in have now. that noted that perhaps terms were with you in mismatch, the trying of just comps fiscal and recovery possible you're return to the one for on focus half for reverts positive it plays few quarter you then modest collabs XQ, comp to comp you'd second the the had half, next is to how so for difficult sounds you a fair your clarify, was out? fiscal of assessment comps but loosely but profitability it some in collaboration you Is the forecast. a of a to 'XX. it's you'd like in visibility still that protecting kind better 'XX,

Hajime Uba

[Foreign Language].

Benjamin Porten

for [Interpreted] the thanks Jeff, question.

IP your by of which was peanuts Piece certainly with. lapping terms One our In success point, collaborations, QX are without QX, Pikmin, an performance collaboration. of very pleased IP we're buoyed To we and the

about comp thinking the difficult. QX relative to certainly is more it's so And

Hajime Uba

[Foreign Language].

Benjamin Porten

the And at [Interpreted] not of is the beginning we us. this. This surprise to that the year gave guidance contemplated a

in talked we comparisons, really implementation in driving our that full was profitability in is it's both and our where opportunity when And of it terms so in the it technologies always And IP that about always of have we It in focus plan operations to talk easier about QX. we and on line. the context. the major new year lies, the the collaborations comps,

Jeff Uttz

the we don't to It's we anticipated comp past in was a have want I better Jeff, add year. the for sequentially throughout things get I confident think QX. X.X% the to our we QX that

Ben be the the just for necessarily about comp But do we not may be number that for So full that and talked year. positive anticipate the case. our like Jimmy will year, a

Unknown Analyst

short for up following profitability on on cost side us Understood. can food of Just labor able saw quarter year? in Again, term. you second things. the first focused inflation, you But And and inflation full we then what and the year? update your just the line quarter the from you're whether you're in full about the that the to those is the as think wondering outlook leverage and items

Hajime Uba

[Foreign Language].

Benjamin Porten

of for sales. 'XX -- are labor sales as start sort percentage largely with QX prior labor the conclusion, labor a and expectations be to with fiscal 'XX line sales. in sorry, of to [Interpreted] to of our QX percentage for the year's of So fiscal for percentage of superior for just be QX and I'm

year, for we well. the expect labor leverage full And as so

look at mid-single recent see calls, low that can that quarter, historical high general you experience inflation been we've our seen actually has digits. digits. you single If single experienced our of digits, most The the we earnings

hours. And is And put waiver implementation, meaningful man improvements place. sales really per leverage. the so of it general and the we've our initiatives. tracks already these that in We've with operational tracks along in along The little sales a streamlining labor unexpected. was seen sorts upside very seasonality, with But that --

the as half come year. in the year. the have operational really They initiatives the we the live opportunity the additional as in busier so by up of fiscal latter well coming the streamlining And half, later that presented

labor, to we be bullish. for continue So

for then And basically this COGS, Jeff, quarter ad on was on inflation flat.

In deflationary it fact, year-over-year. was just quite

to increases we're is of a of for very or it even is. down remain sales somewhat trend and plan for that I significant of happy line where for percentage the the year. expect And significant year as the where the So expect remainder any would COGS remainder don't or that

XX%. look were at year-over-year, year, last at we're XX.X% If you this and year, we

expect and over get same last a improvement it stay a year. potentially And we that's some if stars to things go our big potentially the little So or line way. will better I have it

Unknown Analyst

question labor on just Got last my it. the And was initiatives.

some points previously points maybe had you another how talked back-of-house see potential I'm you few how what kind of one next basis rolling basis initiatives. think us February maybe wondering tracking I be the system to that's going that think opportunity. and just to first self-seating key guys XXX about able you'll from had to with the achieved the of is the system for And already reservation I of indicators, quarters in you're maybe performance talking over about out. were share and XX where be

the of you initial kind in the what few terms just have So quarters next expectations over of impact.

Benjamin Porten

Yes.

in So operational we're we We in fiscal was Rollout the print. them really mentioned by pleased with that September. complete 'XX. started

live so much And pretty in every restaurant. they're

doubt, of we've being is single-digit inflation high see very, with improvements improvements. more seen consolidation. didn't a of its In reenacted. beyond being given very terms productivity, happy That a very the improved as meaningful was of percentage said, sales the station the labor results. That wage the we nature year-over-year said, that just than the We're

X And can X X so you people that. from to you smaller people than really go X can't or people, to people go

to you end we more of the X can to much summer And or so from as X and summer. X to become the where X those X, -- the go opportunities frequent sorry, X, I'm the approach

the of And basis so you're in to points going that XXX the from really year. that the is half those upside back see

basis self-seating reservation we In unchanged. and from that system, remains terms the of that the expect points XX

Operator

comes Citi. of The the Tower Jon from line question with next

Jon Tower

Year to New Great. you. Happy

the nuances I the fiscal itself, just, couple on quarter of maybe guess, second quarter. So

the it believe side, on you traditionally in Just and some to take yet. spoke that pricing, didn't sound of modeling January, I you like round

one. pricing, that it two, So any number leap wasn't. included same-store there take you day. did or And to sales I your in or was But number if you was not last can't speak both? recall year, whether number could

Benjamin Porten

for not the sales. same-store it our and of lease was we terms in so In included adjusted it,

Jon Tower

on Okay. of pricing, X% price about And first in Jeff, November. then, week took the we

about effect the pricing ended QX so that just is And of for X.X%.

quarter unless in say, to Okay. little And so anything we is is? there bit okay, off think similar second a rolling have -- I X%, fiscal the don't closer because

Jeff Uttz

off number in little increases, QX we year took is additional in early, for pricing right them, provide all the of have know, first as November. beginning we now, beginning rolled take the typically to X rolling the I we And little the as the X% summertime. just year. is any simply But do. year our on January the that be don't bit -- plans I price then to to menu There bit hope the And year. determined and throughout a X, effective And over we continue think of a But off continue of take we guests. is of for middle that We X%. additional as have in terms your mentioned, week we anything about the of around value to for great right, you

Jon Tower

I sales back obviously, on the would quarter the imply the, came on Got Cool. based slowdown the fairly little on compelled again. guidance zooming XX% year a revenue a the and in your fiscal you Maybe aggregate front, in, out up in how guys guidance half. revenue mean just bit. appears conservative it. where same-store aggressive I'm first itself just a for little year-over-year.

else that cannibalization comparisons is respect opening of productivity So tough doing in or a a think some IP be on maybe know anything I'm you're and that higher expecting on might basis? year. store with perhaps weighing are to revenue should more just growth not that new challenging markets year-over-year level I the have we some there about labs curious, this But you're you

Benjamin Porten

Yes.

that the last is reason So call conservative, $X.XX behind met was it had the conservative. to $X.XX [ and John, guidance we the the ]

in lower take that do do in very April or our when about and can we're had all quickly on point. we the We and bullish restaurants don't be some we very that guidance careful in trend a that that, see And to or want on base at additional guidance last clock the happening. already really to a gun But with to think past. position we to productivity about raise if do because already be that to want beat back cannibalization the we've experiencing, make guidance, a July, the of being which we too not call, that our jump you I we're sure a has when the we any it a talked we raise. then nothing

that want be Street So our raise guidance. We have The and it would that before a to where promise guidance sure we're all -- there's seeing to later. put that our there It's make out because our there months no reduce to is. keep -- be to out we can trend X it raise to are and we like and causing we do not number

Jon Tower

sense. potent that. on the the in I marketing food perfect half, more back And approach earlier, speak that past. you helped did perhaps Makes maybe during Maybe sounds then obviously, pairing those your least -- little two, number side. just the pure you general, little in on it. at collaborations like Can it to ones versus appreciate timing marketing, expected than in drive focusing year-over-year the spend done number bit like know the IP you future, does period. mix Got in you've it bit to you in mentioned more could the then you promotion a one? I And Ben, to that a differential you're sound the

that and than pair investors, IPs media more forward? that forward going think rather of market through these promo and social some we should something of consumers as about or perfect frankly, these as how running As going promoted the being is like through

Benjamin Porten

like to don't it's or have Perfect packed we constantly on, campaign sort Pair alternative going some calendar. [ whether IP going always You our have Doesn't the a XXth IP, something not anniversary an collaborations. marketing pack of mean to continue we're pivoting we're have to ] assume of a holiday to are going raptors that or from can when calendar

Hajime Uba

[Foreign Language].

Benjamin Porten

in an The between, food-focused campaign say, would another then collaboration. about And versus perfect $XXX,XXX. of the IP terms something [Interpreted] difference like or difference be cost the $XXX,XXX, pair

Hajime Uba

$XXX,XXX, $XXX,XXX.

Benjamin Porten

$XXX,XXX It's when IP. expensive $XXX,XXX. more with we collaborate

Operator

The next Brian of Piper the from question comes Mullan line Sandler. with

Brian Mullan

a into could DMA the the continuing with Just it question of a prepared spoke just development. and smaller it think move Does volume I'm the function volumes really to In I to of have remarks, over of can location. those really Or store on time. do the what dictate DMAs the you doesn't be? the to box stores. is of you just wondering the speak a to if size targeted

Hajime Uba

Language]. [Foreign

Benjamin Porten

focus When have [Interpreted]. really We on is selection, we site AUV. cash-on-cash our do don't returns. a target

of smaller and We're And on DMAs. for the other are cash so burns approach our we as of DMSs. all the that how standards in smaller remains unchanged focused our DMAs same terms

Brian Mullan

And then item. clarification Okay. a just just a follow-up,

You gave menu know the just you and Can what if I I us was, it. let price traffic quarter. for the missed apologize

Benjamin Porten

Traffic X.X%. price -- X.X% mix was traffic down and and was

Operator

of question next from Blair. the with Sharon the Zackfia William comes line And

Sharon Zackfia

on know of you sustainability the drivers a mix. some going improvement Year. of Thanks forward? I neutralized I your there. question was thoughts part It on the the comps And to for mix New happy guess the more earlier I'm curious becoming in nice and touched on really see

Hajime Uba

Language]. [Foreign

Benjamin Porten

with days without marketing behind December relatively with to that second have giving mix in team this in effectiveness rising forward too [Interpreted] recent, single-digit the pleased campaign, the think are we much has negative the high expectations, the of really But see a is you efforts us. we're success continuing We're Given half. made. that decelerating the To the me, X-month see campaign. we when

pull so without have, considered we've even never flattish all better position we much past. long-term we sustainability we're that these the that and to for, in of that the mix got think a much, commenting about levers in And we

great, is this great so And progress.

Sharon Zackfia

little Okay. ahead. Can sorry, talk you go a bit --

Benjamin Porten

years, In increases, the haven't the reasons addition price all. for why of is to other team, we menu aspects is the to one X.X the menu other, improving items by year great past taken side we've mix at marketing the touched the when

which the I price side price to price some are why lapping we done. is coming does increase, increases little mentioned that's menu on think And also things, on the it lapping mix because increases as menu, that well you menus, increase when extent. some So the markets bit the side previously on menu a take we've we're impact as

Sharon Zackfia

sorry Is know But on And to a it obviously, restaurants all or to how on cut it nascent you have if are handling locations? busy some are in. out, delivery, to back about operational this turned talked proving you just where at myself point? time then I'm the redial mean be kind the brand? I'd new I incremental I this that? there's delivery of that's I and you more understand are. the business, Is of fully bring of people kind tension of part given in How on all your

Benjamin Porten

Yes.

incremental. So I think it's definitely

eating soon they're committed their inside. to somebody I think evens as up basically DoorDash at, as

guest that anyway. coming So into our have been restaurants wouldn't

we just our journey, say our gotten that always DoorDash incremental. seals be the year. And so we are been believe has have I'd that throughput great all almost We're so terms it in is do prioritizing And but come we're it's are problem yes, a for of of in live year where is almost now our a at year. restaurants to trouble because into to constantly guests going restaurants. the busy, have, a restaurants this hitting which

the when to restaurants is that's sort of the opportunity, so the the this kitchens, of at is want use States. we we're and as more incremental valve given is meaningful. to which infill markets pressure becoming for opportunity And off-premise But able we really where we release tremendous distract the from don't ourselves United space the incremental. And we're major white happy it's it that point, see

Operator

comes next Street Lake with of line question The Mark the Smith from Capital.

Mark Smith

any the as during kind side Curious me of in throughout the guidance the later there's the is for cost on us conservative quarter. really maybe give leverage question coming really remainder G&A., bake the kind is watching on here additional cost any on But as it year. corporate, can for? leverage the doesn't of this in be any guidance? well the First of if saw maybe And insight should we that if you year

Benjamin Porten

a X year XX comfortable keep believe there's point where XX with I'm having And of about the of costs -- that to in XX is, points years in. it's a coming that hard leverage I a to that guidance bps No, still year-over-year. ago number. after And implies do last XX trend improvement year. XX that number and basis

the with XX. comfortable I'm So

However, trends than higher if to up in do additional and we pick where will be, expect there leverage them come be there. then sales

we G&A but be an on for when good. if pretty at through is point that get that months I update before I'd the give guidance improvement where XX year we're couple a because point into get basis we more the I want April, can, happy think to So on increase any do to the still

Mark Smith

of than Was maybe the function Or that are timing lower smaller openings me expenses, some question markets. earlier kind of in is cost kind some around we during lower think came just preopening we about of efficiencies and more quarter? had preopening a in expected the of you kind the expenses Other the for Absolutely. as in getting of even quarter. of just the of

Hajime Uba

Language]. [Foreign

Benjamin Porten

favor our things preopening. there worked are in in So terms major of [Interpreted] that X

construction construction that this had the under had year. units during X last the any units period managers The under we first X restaurant. for same new have versus we This year, is, we X

the had -- training. X difference can that's we you so And restaurant that across managers in XX

incurred 'XX that didn't year. that incremental that's an we fiscal have labor this So in cost we

structure. major other is our team change in the The opening shift

Now the that the now, don't across -- established right deeds historically, X.X teams. largely ] we've we we've have we opening [ had country, need -- X.X

and teams pare managers that geographic well. store our been other to to able presence as has a due X.X members meaningfully the markets, training in Now we've reassigning we've restaurants, costs established at by enough become that back to local

helped that's It's also with And our labor. so helped with G&A.

Operator

Jim Research. of next Northcoast question Sanderson comes with from The the line

James Sanderson

of conversations negative drive Is flattish. understood what the and first I [ that way per the some the to Percanbo to right I about of to similar Have ]. similar items happened the check to it? quarter, in think benefit you I of the from mix think, built wanted to follow shift to, promotions mid-single the if on digit

Hajime Uba

[Foreign Language].

Benjamin Porten

No, It's we're done Perfect with we've the pleased really time Pair campaign. Yes. the something like first that.

so was that. time something. last the be surprised it very, We'll And do like I'd done if something very we've

I tool was in sorry, the marketing it's a useful food-focused me, be box. to think what our part? second going I'm To

Hajime Uba

Language]. [Foreign

Benjamin Porten

side and we on important pricing that on take [Interpreted] And get items take less on of you place. year. that And to menu you reason been haven't is that the pricing that's less terms on-site is the menu side there's that mix versus so mix the menu in last other on pricing part attachment wins of you flow-through

And so that, now a lapped of that that was a we've mix less that's mix pressure. pressure

Hajime Uba

[Foreign Language].

Benjamin Porten

We've just just seen with is more right Another opportunity. can some tech much the growth [Interpreted] it's not premium so trade leading really thing attachment, we our items. mix a have is that if doing into increase LTOs, we LTOs support we're

that have another And our for we lever mix. so that's

James Sanderson

All right.

Just a follow-up question.

think of $XX. current the forward? you that think promotion Is check higher had average it? for contest the that going help a to I the promotion mix of that improve could Is than a That type is in quarter. way

Benjamin Porten

Absolutely.

T-shirt first the a past spending threshold marketing a any scratcher like done of had time we've had attachment. is tech and these this tied say, than sorts this a to you really can in size something in a see of first the where $XX. or IP like get, the have or impact that you And more holiday So but when time efforts card, spend collaborate, -- is if not we've mix yes, scratch we've you we've sort campaign giveaways the can

James Sanderson

All trend. right. quick traffic And question a on

a where on saw X-year traffic think X-year today? rate, basis, I that deceleration run trend. in we side. traffic Is are positive Is low good single-digit on a you a that a stack the

Jeff Uttz

X.X% -- the I guys the minus to want quarter. you thing QX, from the number mean, X.X% improvement is in to on I Yes. minus this focus the

because. where we that's of X.X%, the at previous in some and bumps the about a happy this think some quite I don't important you I have for when calls came filling our for problem very talked quarter higher it's would I And summertime, even I QX. last higher any that think quarterly honestly, the we July what's be in would had in year it's We guidance, we're with it give that. number -- don't though And thought in than out road and we it thought us of be.

most important way, with the summertime. I I'm think And look it that number. to that So it's just at happy

road weird bumps of said, also So the November summertime of the some with I and the in the like election. during some happening the things then in

lot there's of look think a X-year a it I to noise stack. on at

quarter-over-quarter improvement. So QX I'd QX from on the focus to rather

James Sanderson

the the Could right. review 'XX shares Last for used fiscal to you on just the quarter follow-on. be in standing second All for me. based question

Jeff Uttz

it Yes, of [indiscernible] outlook I get don't I'll in go me, to the Why have we that don't number. I front that. but now have

Benjamin Porten

sorry, I believe it's I'm shares. XX XX,XXX million --

Jeff Uttz

that something that. formally it's now or think [ like XX ]

Operator

Capital. comes The George Kelly from next of ROTH line question with the

George Kelly

for questions. Thanks the

First, mentioned a I that than have new kind curious I think kind the Fresh And there's surprised Is your reasoning maybe thought? launching Mr. launch? -- opportunity what's you it more what's of remarks that, was hear labors that I in February. to Or would behind just in the just there? of prepared

Benjamin Porten

to went those Do time they're you to not of first remember Freshes, the curse intuitive. one and open you a Mr. tried

them pretty need and to because it somebody under of you sort need explain much. to You go list it's

aren't open X that. And things you not of it's X, our clam. you with go, every pretty time I somebody like this. spend open order an will restaurants, minutes to go a confusing sort like trying it's it's pry intuitive, to like If it's because much one And our because see just servers it -- those of I explaining

So a actually accustomed to you Mr. practice to table Fresh the so it can that. guests bring get the to

belt. of push Mr. is exactly works just it's It's a this really friendlier It button. for not think lot we're And come a time. excited. just each you'd Fresh not could be the a And it's take this so to order a and -- It very intimidating guest-friendly our as everybody. the newest I And And servers experience it's not how makes just off in to to into expect restaurant things it know work. to fear.

Hajime Uba

[Foreign Language].

Benjamin Porten

to in that lot unique There explained restaurants price. of the that such things first we can as plate are to be where fact slots time, need win a you peers if are our our how you're coming for

But basically with and of all to X.X, update how for Mr. a And to we're order software guests. different first-time skill a tandem new that's the need video through that, your you we're if play go will Fresh explain these things. it the on panel enjoy you for passing will you Kura. we'll so -- And first-time page, its a guests, flip an teach in releasing landing a actually order, have to that

as And do so those server well. it's peak just that drain reduces during meaningfully weekend dozens like a having work meaningful productivity. to is hour of a on

And so excited really this something we're that being to is streamline able about.

George Kelly

if been for growth. you you call how opportunity cost unclear questions has to respect on, maybe of -- for system Okay. curious is Or I there, shoulder I different and Or comp to factor bunch of guess, a big the a about would that Excellent. then a think me be talked I'm reservation That's lot discuss of you question on you half. reservation, I'm inventory helpful. just comp the in or Jim. opportunity this with reservation really the of well. But going that accelerating couple is also what to to Most Does is second helpful. And could conversation drive the could it about for much detail And back the is system savings. the performance comp sort work? if in going just too, just in it kind a to up of of how And as system? is open sort it reasons of periods? give Are improving the the more

Benjamin Porten

Yes.

need So figuring basis. to reservations. out of the difficult that's And in to that right that's number actually of do of allocate most for one tables a we actually the store-by-store inventory, terms -- is project

on so the operations team at And that. that's work is -- hard

if then or for made XX:XX. they observations its so an next periods, reservations what community, for didn't would the to And they would of pretty and that, make they immediately. that the traffic shorter want hour fill go Japan up saw X:XX, implementation weekend. for people lead, with X:XX, would do the day peak the than up wait much and In the that rather terms is And realize hours

long. and list, lines our XX% we've wait in too because with the will so about historical drop where And people off, sign had are not

that XX% but massive so am is that a I to address I'm is a traffic opportunity directly. And an expecting XX%, means us. opportunity this bond, excited. really no for By

Operator

of And the Company. the next Benchmark with Todd from question comes line Brooks the

Todd Brooks

just And tag-in a great Have start to the of year. questions. type few

up QX, it turn to that? the and on on but said duration Ben longer and How system questioning. store-by-store is on start to turn to it's the rollout once following George's a months self-seating Just reservation on. a of of this a it platform, in is Or turn a algorithm, you this quickly than does couple start takes

Benjamin Porten

I'm the year. rollout that the system-wide is holding end ambitious, goal the by which fiscal myself to, So is full of

remarkably far been has smooth. everything moved so track. And on It's so

month. our for of schedule. a have all test We Everybody first first pleased be goes then that we to or on have so earnest, partners. is sure in-restaurant probably extremely would my with I'm After expectation we're restaurant next coming -- the this really together roll month testing out April. our and begin make in about to

Todd Brooks

the to the in about abandonment the system and talk shoulder to forward fully here rolled waitlist and And talked from in Japan's having in you Okay. out picking the up rolling the spoke States. Japan you traffic from reservations Can experience And standpoint of day reservations. it experience Great. lift you out? a

Hajime Uba

[Foreign Language].

Benjamin Porten

company, publicly to speak in separate that traded Given Japan is can't too detail. we Kura a them much

impact that right from Our have understanding a heard to them it quantify meaningful that we've But we're able is what on and traffic. not now. did

And and seating benefit is it to of is coupled guest terms lift, system first a as In is the with for is reservation introducing headcount improvement thing system. there our or satisfaction about we're the because sales self with it excited really is that a wait guaranteed time, one complaint we're massive reservations in reduction primary times. the that

way And direct so address to this a that. is

for we X know And or so fact project. with we've this that coming a got things

a do And upside. of in we're happy with We so still even isn't case, if lift, a still expect lift. plenty any there But sales project. there's sales this

Todd Brooks

you consolidating at That's with great. X look the back look you efficiency. when initiatives of a the follow-up, And upcoming house stations the the and labor around down And to at different in self-seating.

How years You it take dropped number to post rollout what a restaurant self-seating. look at standpoint? that has number the to what versus of from body staff ago staff should of much X the restaurant took the

Hajime Uba

[Foreign Language].

Benjamin Porten

are going talking confirm, Just [Interpreted] about you to forward? historically expectations or

Todd Brooks

of once per to we the to trying I'm just people and out of you we going was say from idea I'm per get numbers these efficiency, it with get pick XX with what improvements? but the shift to XX an pulling the the memory, consolidation, shift end we if people are if

Benjamin Porten

like staffing, down X house each. people about comparing gone like, pre-pandemic So house by and has peak if say I'd we're say, a of back of front that

meaningful pretty the streamlining operations. of And so it's been a

Hajime Uba

Language]. [Foreign

Benjamin Porten

of streamlining discussed station then in in consolidation, about opportunity the from And the does operational the that past come restaurants the terms being that call really [Interpreted] we busy.

the as upside grow seasonality we in through and And so is grow progress year. the just the going to as kicks

Todd Brooks

me. Or obviously up the X magnitude but maybe the we're of partnerships, a it I won't X does you stepping with? have How have half X had Okay. of back on half. X? for who we think, to a QX. partnering last partnerships up number number And the year? And partnerships of for in match back making in I think the last we it down versus, Is then are IP into we one one visibility from QX,

Hajime Uba

Language]. [Foreign

Benjamin Porten

up X lined very for them. With really We're half. the They're good back strong. about

Operator

questions conference. today's conclude will this at no and are further this Thank time, you. There

You time, interpreter rest the may transcript were by lines present enjoy an this live are disconnect of this day. [Portions [Interpreted] on your the call.] of your spoken marked at and that

Kura Sushi USA (KRUS) 7 Jan 252025 Q1 Earnings call transcript