Kura Sushi USA(US:KRUS)2026-01-07 21:25Financial Performance - Sales for the three months ended November 30, 2025, were $73.5 million, an increase of $9.0 million or 14.0% compared to $64.5 million for the same period in 2024, driven by new restaurant openings and menu price increases [81]. - Comparable restaurant sales decreased by 2.5%, attributed to negative traffic and flat price/mix, reflecting lower consumer spending due to the macroeconomic environment [81]. - Net loss for the three months ended November 30, 2025, was $3.1 million, compared to a net loss of $1.0 million for the same period in 2024, representing an increase in loss of 218.4% [79]. - Adjusted EBITDA for the three months ended November 30, 2025, was $2.4 million, down from $3.6 million in 2024, resulting in an Adjusted EBITDA margin of 3.3% compared to 5.5% [96]. - Restaurant sales decreased by 2.5% for the three months ended November 30, 2025, compared to a 1.8% increase in the same period of 2024 [104]. Cost and Expenses - Food and beverage costs rose to $21.9 million, an increase of $3.2 million or 17.5%, with food and beverage costs as a percentage of sales increasing to 29.9% from 29.0% due to tariffs on imported ingredients [82]. - Labor and related costs increased to $23.9 million, up $2.7 million or 12.5%, with labor costs as a percentage of sales decreasing to 32.5% from 32.9% [83]. - Occupancy and related expenses were $5.8 million, an increase of $1.0 million or 22.8%, with occupancy costs as a percentage of sales rising to 7.9% from 7.4% [84]. - Total restaurant operating costs increased to $67.5 million, up $10.4 million or 18.2%, reflecting the impact of new restaurant openings [79]. - General and administrative expenses were $9.6 million, an increase of $0.9 million or 9.4%, with expenses as a percentage of sales decreasing to 13.0% from 13.5% [87]. Restaurant Operations - The company plans to open a total of 16 new restaurants in fiscal year 2026, expecting revenue and operating costs to increase accordingly [68]. - The number of restaurants increased from 79 at the beginning of the period to 83 at the end of the period, with 4 new openings during the three months ended November 30, 2025 [105]. - Restaurant-level operating profit was $11.1 million for the three months ended November 30, 2025, compared to $11.7 million in 2024, with a restaurant-level operating profit margin of 15.1% [102]. - Comparable restaurant base increased from 45 to 62 restaurants year-over-year, indicating growth in the existing restaurant portfolio [104]. Cash Flow and Financial Position - Net cash provided by operating activities was $0.5 million for the three months ended November 30, 2025, a decrease from $4.4 million in 2024 [111]. - Net cash used in investing activities was $12.7 million for the three months ended November 30, 2025, primarily due to $18.4 million in purchases of investments and $13.8 million in property and equipment [113]. - The company has $25.7 million in contractual obligations as of November 30, 2025, including $13.5 million for food purchases and $12.2 million for new restaurant construction [117]. - The company maintains a Revolving Credit Agreement with Kura Japan, with $45.0 million of availability remaining as of November 30, 2025 [109]. Accounting and Risk - No material changes in critical accounting policies and estimates from the previous fiscal year ended August 31, 2025 [121]. - No material changes to market risk during the three months ended November 30, 2025 [122]. - Financial statements are prepared in accordance with GAAP, requiring estimates and assumptions that affect reported amounts of assets and liabilities [119]. - Assessment of potential impairments of long-lived assets involves significant judgments and estimates [120]. - Tariffs are expected to continue impacting food and beverage costs, construction, and equipment costs throughout fiscal year 2026, with menu price increases implemented to manage profitability [69].