Kura Sushi USA(KRUS)2025-04-08 23:54Financial Data and Key Metrics Changes - Total sales for the fiscal second quarter were 57.3 million in the prior year period, representing a growth of approximately 28% [25] - Comparable restaurant sales performance was negative 5.3%, with traffic down 8.5% and price/mix up 3.2% [11][25] - Restaurant-level operating profit margin decreased to 17.3% from 19.6% in the prior year due to sales deleverage [13][28] - Net loss was 0.31 per share, compared to a net loss of 0.09 per share in the prior year [28] Business Line Data and Key Metrics Changes - The company opened 11 new restaurant units to date, with three openings during the second quarter [11][13] - The performance of new restaurant openings, particularly in Bakersfield, California, has been strong, indicating potential for future growth [14] Market Data and Key Metrics Changes - Comparable sales in the West Coast market were negative 1.5%, while the Southwest market saw a decline of 8% [25] - The company estimates that weather-related impacts in Q2 represented a comp headwind of 400 to 500 basis points [12] Company Strategy and Development Direction - The company aims to return to a 50-50 split of new and existing markets by fiscal 2027, which is expected to serve as a comp tailwind [16] - The company is focusing on building a strong pipeline of IP collaborations, with seven to eight planned for fiscal 2026 [16][90] - The rollout of a new reservation system is a top priority, with positive initial feedback from testing in three restaurants [20][106] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a 20% restaurant-level operating profit margin for the full year, despite uncertainties related to tariffs [39][41] - The company has not updated its guidance due to increased uncertainty in consumer behavior following recent tariff announcements [52][61] - Management remains optimistic about achieving positive comps for the full year, barring any significant changes in consumer behavior [63] Other Important Information - The company had 2.1 million litigation settlement expense [27] Q&A Session Summary Question: Performance through the quarter and weather impact - Management noted that performance improved in March after the adverse weather conditions in January and February [36][41] Question: Margin expectations for 2025 - Management remains confident in achieving a 20% margin for the full year, although uncertainties exist due to tariffs [39][41] Question: Consumer spending concerns - Management indicated that they do not interpret the recent performance as a slowdown in consumer spending, especially given the strong performance in March [51] Question: Tariff implications on supply chain - Management is still assessing the impact of tariffs on costs and is in discussions with suppliers to mitigate potential increases [58][60] Question: New unit openings and revenue contribution - Management confirmed plans to open one more store in Q3 and two stores in Q4, with ongoing construction challenges [78][80] Question: IP partnerships and future collaborations - Management confirmed that they expect to run IP partnerships for the balance of the fiscal year, with a focus on impactful collaborations [123][126] Question: Reservation system rollout - Management expects to roll out the reservation system system-wide by the end of the fiscal year, with positive initial responses from customers [106][132]