The following is a summary of the Kura Sushi USA, Inc. (KRUS) Q1 2025 Earnings Call Transcript:

Financial Performance:

• Kura Sushi USA reported Q1 total sales of $64.5 million, driven by a 1.8% increase in comparable store sales and the opening of six new units.

• Adjusted EBITDA margin significantly increased to 5.5%, an improvement of 210 basis points year-over-year.

• Net loss was reduced to $1 million, or a loss of $0.08 per share, compared to a net loss of $2 million, or a loss of $0.18 per share in the prior-year quarter.

• Restaurant-level operating profit margin decreased to 18.2% from 19.5% in the prior year quarter mainly due to inflation.

Business Progress:

• Launched six new restaurant units in strategically targeted markets, with significant openings in smaller DMAs.

• Implementing new guest experience improvements including a reservation and self-seating system, and a newly designed 'Mr. Fresh 2.0', easing the guest interaction process.

• Plans to maintain a strong pipeline of restaurant openings, expecting an annual unit growth rate above 20%.

• Continued focus on operational efficiency, particularly in labor and supply chain management.

Opportunities:

• Expanding into smaller DMAs beyond the traditional large markets, increasing market penetration.

• Implementing technological innovations like the new reservation system and Mr. Fresh 2.0, anticipated to enhance customer experience and operational efficiency.

Risks:

• New restaurant openings align with regions of high labor costs, which may impact overall profitability due to wage inflation.

• Absence of powerful intellectual property (IP) collaboration for Q2 might put pressure on the comparable sales growth.

More details: Kura Sushi USA IR

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