Kura Sushi USA, Inc. (NASDAQ:KRUS) Q3 2023 Earnings Call Transcript

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Jon Tower: All right. Thanks a lot. I’ll pass it along.

Benjamin Porten: Thanks, Jon.

Jimmy Uba: Thank you, Jon.

Operator: Thank you. Our next question comes from Joshua Long with Stephens. Please proceed with your question.

Joshua Long: Great. Thank you for taking my questions. I was curious if you could talk about some of the trends through the quarter. I know as we left off last quarter, started off in that sort of low double-digit, 11% range, very strong. Curious if there’s any additional color you could share on just how things transformed through the quarter overall and then maybe by region with the California and Texas comp numbers that you called out as well?

Jimmy Uba: [Foreign Language] [Interpreted] Yeah. So looking at a regional basis, as Jeff mentioned in the opening remarks, California output for the Texas comps for this quarter, but that’s on a single year basis. If we do a multiyear comparison, the comparison becomes much closer simply because the operating environment for California and Texas have been so radically different, especially for the last two, three years, the year-over-year comparison — just the premium comparison can really determine your answer. In terms of the cadence of performance, yeah, March was strong. April was a little bit weaker, which I think is what everybody saw in the restaurant industry, then May was stronger and June is actually, we pretty more pleased with June with the 14.7% that we saw, very strong traffic.

It’s been a nice June for us. And I think, Josh, too, what’s important to note is, we’ve mentioned this in conferences as well that our three best units are in Washington State and Texas and in New Jersey. So while certain regions, Texas, maybe better than California, some quarters and vice versa. We’re very pleased and very happy to see that our three best restaurants are very geographically dispersed and we continue to do well pretty much in every region throughout the country.

Joshua Long: That’s super helpful. I appreciate the two points. When you think about trends, I think in the past couple of quarters, we’ve talked about pretty consistent per plate consumption, also have been trying to think about this from a marketing perspective in terms of, you mentioned the We Bare Bears being the first American or most widely known here in America. And then going into thinking about the DC comics. Are you pulling in a new guest, are you pulling in your kind of more frequent guests or your current guests more frequently? How do you think about that? And how does — how has per plate consumption trended through 3Q?

Jimmy Uba: [Foreign Language] [Interpreted] Looking at consumer sentiment, we — per plate consumption and check has being flat. Check management has been pretty much minimal, negligible. In terms of the impact for We Bare Bears, so one of the ways that we’re thinking about it is that, over the last quarter, we redeemed about 120,000 rewards members. And for all of Q4, we’ve been working with American properties. So We Bare Bears for the first two months and then DC Comics for the last month of August. And so our ability to attract the Board’s members materially is a much larger number than we’ve seen in past quarters. And certainly, this would be something that we put into our strategic tool box. Yeah. So one — we see a pretty strong correlation between the effectiveness of a brand collaboration with sign-ups because to get the better prices, the giveaway to the T-shirts, the Canister (ph), et cetera., you need to register as a member.

And so a strong collaboration, certainly can fuel membership growth and that will be one of the ways that we’re determinating the effectiveness of these brand collaborations.

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