Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Kura Sushi USA, Inc. Fiscal First Quarter 2023 Earnings Conference Call. This time, all participants have been placed in a listen-only mode, and the lines will be open for your questions following the presentation. Please note that this call is being recorded. On the call today, we have Hajime Uba, President and Chief Executive Officer, Jeff Uttz, Chief Financial Officer, and Benjamin Porten, Senior Vice President, Investor Relations and Business Development. Now I'd like to turn the call over to Mr. Porten. Thank you, Operator. Good afternoon, everyone, and thank you all for joining. By now, everyone should have access to our fiscal first quarter 2023 earnings release. It can be found at www.kurasushi.com in the investor relations section. A copy of the earnings release has also been included in the 8-K we submitted to the SEC. Before we begin our formal remarks, I need to remind everyone that part of our discussions today will include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance and therefore you should not rely on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. We refer all of you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. During today's call, we will discuss certain non-GAAP financial measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation, nor as a substitute for results prepared in accordance with GAAP, and the reconciliations to comparable GAAP measures are available in our earnings release. With that out of the way, I'd like to turn the call over to Jimmy. Thank you, Ben. Thank you everyone for joining us today. I'm excited to report another strong quarter where we outperformed industry averages in regard to traffic growth, saw two strong restaurant openings, and delivered restaurant-level operating profit margin that exceeded the same period prior to the pandemic. Our performance has been driven by steadfast support from our loyal guests and warm reception by new fans alike. In an environment where consumers are forced to be more careful with their discretionary spending, we are delighted to see that when our guests go out to eat, they choose to dine with us. Our three goals for this year are to continue our rapid unit expansion, grow into our GM day, and maintain the operational excellence and incredible values that have made us our guest top choice for dining out. Our first quarter sales of $39.3 million represent revenue growth of over 30% over the previous year's first quarter revenue. We saw comparable sales growth of 6.9% while facing headwinds created by the dropping of 8% pricing at the beginning of September. This 6.9% comp figure breaks down to 4% from traffic and 2.9% from price and mix. We are especially pleased by our traffic growth, which outpaced the casual dining segment by a monthly average of more than 700 basis points, and which we believe is an indication of our concept resilience in a potential economic downturn. As mentioned in our previous earnings call, we believe that there is significant opportunity in capturing new guests as they trade down from local sushi restaurants who have taken price much more aggressively than we have. Our traffic growth during a period when casual dining as a whole is suffering from declining traffic only underscores the opportunity created by our unparalleled value proposition. Looking at our operating results, we are pleased to note that our labor cost as a percentage of sales are 60 basis points below the prior year, confirming the expectation that the 50 basis points labor improvement in the prior quarter, driven by the implementation of our three technology initiatives, was not just a one-time benefit, but potentially a long-term tailwind for our operational efficiencies. Due to ongoing inflation, our cost of goods sold as a percentage of sales was 160 basis points higher compared to the previous year and is largely responsible for the year-over-year decline in restaurant-level operating profit margin. While it is difficult to predict when we can expect moderation in commodity costs, we do not expect this inflation to be permanent and remain optimistic that we can achieve the margin highs we saw in the previous fiscal year as we enter a more normalized environment. As Jeff mentioned in the last earnings call, one of his key areas of focus as our new CFO was to manage G&A expense. For a growing company, there are certain investments in people and infrastructure that are necessary to support growth, and we will not compromise that. However, this does not mean that there are not opportunities for savings, and pursuing these savings is a top priority. Since the IPO, we have said that the best path to profitability for us is to leverage our G&A cost against an increasingly larger store base. While this leveraging will be a multi-year process. We are proud to announce that we are making substantial progress towards this goal, as demonstrated by the improvement in G&A expense as a percentage of sales of over 100 basis points as compared to the prior year. I'm particularly impressed by the team's effort to control cost and for us to have achieved the leverage during the period when we are continuing to see inflation in G&A line items. Our G&A strategy is to renegotiate existing contracts and to pursue tech-driven efficiencies, which will allow us to minimize new hires. Our support center employees have risen to the occasion, and I'm proud of the company-wide cooperation that has made this possible. Turning to development, we opened two new locations in the first quarter. One in the Mall of America in Bloomington, Minnesota, and one in Jersey City, New Jersey. Subsequent to the end of the quarter, we opened our Philadelphia location in late December. As I'm sure you heard on our previous earnings call, construction and permitting delays have been a headache for the restaurant industry, and two of these units similarly suffered from unusually long opening delays. That being said, we believe that the worst is behind us as the remainder of our fiscal 2023 pipeline is largely suburban, which typically make for smoother experiences. Additionally, we are very pleased by the early performance of these three units. It's great to see our restaurant thrive in the Mall of America, further indicating Kura's national portability and appeal across demographics. Jersey City and Philadelphia continue to show the East Coast market's tremendous potential. We currently have four units under active construction, with two more breaking ground later this month. With a few more restaurant openings expected in Q2, we are well on track to achieve the annual unit growth guidance we provided in the last earnings call. Lastly, I'm very excited to announce that we have made significant progress in the implementation of our new waitlist app and reward program platform, and expect testing to begin during this quarter. The waitlist app will have an immediate positive impact on customer satisfaction by improving waiting time accuracy, which we hope will translate into improved attrition rates for guests waiting in line. With the new reward program platform, not only will we have greater flexibility in the ways that we can reward our guests, but we will be able to begin leveraging reward member data for targeted marketing for the first time. Our reward program has been hugely effective in driving frequency and average check growth. To the meat of any reward program lies in the power of data, and utilization of this data represents a new chapter in our marketing efforts. On that note, we began our targeted marketing efforts specifically geared towards first-time guests in December. While it's too early for us to discuss the impact yet, we believe that the opportunity in capturing new guests who have been discarded by the aggressive price taking we've seen among local fish competitors is truly significant, capturing these guests remains a key pillar of our marketing strategy for this fiscal year. Before I hand things over to Jeff, I would like to note that we took pricing of approximately 7% in the first week of December. Finally, I would like to thank all of our team members, both at our restaurant and the support center, for the great work they do every day to create the magic that is the Kura experience. With that, I'll turn it over to Jeff to briefly discuss our financial results and liquidity. Jeff? Thank you, Jimmy. For the first quarter, total sales were $39.3 million as compared to $29.8 million in the prior year period. Comparable sales growth as compared to the prior year period was 6.9%, with regional comps of 10.3% in California and 2.1% in Texas. Turning to costs. Food and beverage costs as a percentage of sales were 31.6% as compared to 30% in the prior year quarter due to food cost inflation, partially offset by pricing taken over the course of fiscal 2022. Labor and related costs as a percentage of sales decreased to 31.9% from 32.5% in the prior year quarter. This decrease is due to incremental efficiencies created by the implementation of technological initiatives as well as sales leveraging from pricing taken over the course of fiscal 2022. This leveraging was partially offset by wage increases and incremental pre-opening labor. Occupancy and related expenses as a percentage of sales were 7.3% and were largely flat year-over-year compared to the prior year quarter's 7.4%. Other costs as a percentage of sales increased to 13.5% compared to 12.1% in the prior year quarter due to increases in pre-opening costs, advertising and promotional costs, and repair and maintenance costs. General and administrative expenses as a percentage of sales decreased to 16.9% as compared to 18% in the prior year quarter. On a dollar basis, general and administrative expenses were $6.6 million as compared to $5.4 million in the prior year quarter, with the increase largely driven by compensation and partially offset by reductions in professional fees and insurance costs. Operating loss was $2.2 million as compared to an operating loss of $1.3 million in the prior year quarter. As a percentage of sales, operating loss was 5.5% as compared to a loss of 4.2% in the prior year quarter. Income tax expense was $10,000 compared to $12,000 in the prior year quarter. Net loss was $2.1 million or $0.21 per diluted share, compared to a net loss of $1.3 million or $0.13 per diluted share in the prior year quarter. Restaurant-level operating profit as a percentage of sales was 18.2% compared to 19.5% in the prior year quarter. Adjusted EBITDA was $0.6 million compared to $0.8 million in the prior year quarter. Turning to cash and liquidity. At the end of the fiscal first quarter, we had $26.9 million in cash and cash equivalents and no debt. Lastly, I would like to reaffirm the following guidance for fiscal year 2023. We expect our total sales to be between $183 million and $188 million. We expect General and Administrative expenses as a percentage of sales to be approximately 16%, and we expect to open between nine and 11 new units with average net capital expenditures per unit of approximately $2.5 million. With that, I'd like to turn it back over to Jimmy. Thanks, Jeff. This concludes our prepared remarks. We are now happy to answer any questions you have. Operator, please open the line for questions. As a reminder, during the Q&A session, I may answer in Japanese before my response is translated into English. Please bear with us. Thank you. Ladies and gentlemen, at this time, we will be conducting a question and answer session. If you'd like to ask a question, you may press star one on your telephone keypad. Confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Andrew Strelzik with BMO Capital Markets. Please proceed with your question. Hi, this is Daniel Gold on for Andrew. Thanks for taking the question. When we think about the results in the quarter, our math suggests your comps slowed throughout the quarter to 2.5% in November. What do you attribute that to, and what are you tracking quarter to date or in December? Thank you, Daniel, for your last question. Please allow me to answer your question in Japanese, and Ben is gonna translate it. In terms of our comps, we were definitely pleased to see that, you know, in this environment, we were able to achieve comps of 6.9%, particularly because our traffic was up 4% over the course of a quarter, which, as everybody knows in this environment, is pretty rare. Looking at, you know, industry averages like those provided by Knapp-Track over the period, that was our Q1, it's pretty clear that our peers in the casual dining space are down in traffic. Again, you know, the fact that traffic is up for us is a great sign for our concept, it's a great sign for the strength of the consumer. That being said, as Jimmy mentioned in the prepared remarks, our focus for fiscal 2023 is going to be in terms of capturing first time guests. In this sort of environment, it's only natural that people are going to reduce the frequency of their out of home, you know, dining occasions. We've been able to remain one of them for. Remain, you know, a dining occasion for our guests. For us to maintain the traffic growth that we've seen in the last quarter, we think it's imperative for us to capture first time guests. Jeff, is there anything you wanted to add? No. I think, you know, the traffic that we were able to get is something we're very happy with. You know, getting people in the door is, you know, the first step and we've been able to do that. We've been able to increase the number of people coming in by 4% over last year in a very tough environment. You know, we're not really gonna give, you know, monthly comps, and I know we did give September and October on the last call, so you can obviously do math yourself. You know, we're very happy with where the comp came out for first quarter of our fiscal year, especially compared to our peers. People are still coming in and as Ben said, if people were going out three times and now they're only going out two, it appears based on the numbers, that we've been lucky enough to remain one of those two dining occasions where people do choose to eat away from home. Got it. That's really helpful. Thank you. One other question for me. One of the stated goals for the year is G&A. I'm curious on what your plans are on a multi-year basis. You've guided to 16% sales for G&A as a% of sales for the year. What do you think is a reasonable place to get to longer term? Are you expecting a linear progression down or plans for G&A investments? I'm expecting near progression down. You know, we're not gonna give any guidance, you know, past this current fiscal year. We are a growth company. I do think that our G&A is elevated, and as we've said many times, you know, on these calls and then in, you know, meetings with investors and conferences and whatnot, that we. One of my goals, my top goal, is to get it down. We did see a little bit of leverage when you compare the first quarter of this year to the first quarter of last year, which we're very pleased with, but it's not a trend yet. And we're gonna continue to guide towards the 16%. The number came in where we expected it to for Q1, so there were no surprises. You know, stick with the 16% for now. I do expect that to get better in future years, I'm just not able to quantify that at this time. Jimmy also said in the prepared remarks that we're also not gonna compromise investments that we need to invest in our company for future growth. There is room for improvement, and that's a promise that we have made to everybody, and that's a promise we're gonna keep. I just can't quantify it for future years right now past fiscal 2023. Got it. Thank you very much. You're welcome. Our next question comes from the line of Jeremy Hamblin with Craig-Hallum. Please proceed with your question. Thanks. I wanted to just come back to the traffic versus menu pricing versus mix portion of the commentary for the November quarter. I think that I calculate close to 8% menu pricing that you would have been carrying, you know, throughout the quarter before you took this December price increase. If traffic was up 4%, does that imply that you had a fairly significant mix shift, you know, during the quarter? What I'd suggest- Go ahead. Go ahead, Jimmy. Oh, okay. Okay, thank you. In terms of Q1, we did see a little bit less of flow-through from pricing than we have in, you know, past quarters. That being said, we did see average check growth on a quarterly sequential basis from Q4 to Q1, you know, it's not like there's aggressive check management. Checks are still growing. The per person plate consumption over the same period was flat as well. Certainly it's a point of focus for us, but given that this is just a, you know, result from one quarter, we don't think this is necessarily indicative of a trend yet. Okay, gotcha. You're not providing any color on kind of quarter to date trends. Cause I did wanna ask you, the 7% price increase that you took in December, whether or not that's having any impact on traffic trends. The second part that's kind of tied into that is you did see a pretty healthy jump now the last 2 quarters in food and beverage costs. We know that there's inflation out there, certainly on commodities. I wanted to get a sense for, are we getting close to where you feel like that peak in food cost inflation has happened? With that incremental 7% that you took in December, is that, you know, hopefully going to balance out your, kind of your COGS as a% of sales? Let's take the first part of your question, which is about December and the price increase. Early indications that we've seen is that, you know, the response by guests has been just fine. You know, previous price increases that we've taken, we're seeing pretty much the same pattern, which is little to no negative response to the pricing increase. You know, we're very lucky where our pricing is compared to our competitors. We do have headroom to take price and we did take that price of 7% at the beginning of December. You know, we're happy with what we've seen so far in terms of no negative response to that. You know, we're not gonna give any other more color. You know, December's only closed five days ago. We're not able to really give any more color as it relates to the beginning of the second quarter. As far as your question on COGS, you know, I am optimistic that we're reaching a peak, but I'm not banking on that. You know, we do see some things continue to go up, when we have seen sequential month-to-month inflation since, you know, the beginning of the year and even, you know, as we go back into Q4 of last year. I'm planning for that to continue to go up, which is why we took the price. The price does not fully offset the impact of what we're seeing with inflation, and we don't expect it to, but it is helping. One thing that really encourages us is because of that traffic to 4% during the quarter is that, you know, guests are reacting pretty favorably to the pricing. It really isn't impacting whether or not they wanna come visit us. I'm optimistic, but I'm not optimistic enough to tell you that I believe that we've reached the peak. There are some positive signs out there, but again, same thing as we said on the last couple questions, it's not a trend yet. Just to add on that note about commodity inflation. As we mentioned earlier, we're one of the few concepts that are posting positive traffic in the casual dining sector. I think, you know, really a big part of this is due to our exceptional value proposition. That includes a lot of guests that are, you know, trading down from more expensive sushi restaurants. We sort of see this as a long-term investment in terms of growing our overall restaurant base, which is an opportunity that I just don't think other people are seeing here. While there may be short-term commodity pressures, in the end, having this excellent value, I think is gonna position us for that much more success once we see a normalization in inflation. Got it. Just wanted to clarify another comment from the script, which was on the unit openings and kind of the cadence that you're expecting. I think what you said was that you had a, you know, four units actively under construction and then a couple that additional that you are gonna expecting to break ground by the end of the month. In terms of completing those, getting them open, because I know as you noted that they've, you know, they're a little bit behind schedule for a variety of reasons construction, permitting delays, HVAC systems, whatnot. Can you give a sense for your expectations around, you know, how many, y ou've opened one quarter to date thus far. You know, are you thinking you're gonna get two more open this quarter? You know, just in terms of even for the back half of the year, is that gonna be even split? Is it gonna be back half weighted? Any color you could provide would be super helpful. In, in terms of the... I mean, we're sort of gonna repeat what you just mentioned, and we're gonna be repeating ourselves from the prepared remarks. What we can say is that we've got four units under construction. We've got two that are just about to break ground. We've already opened one to date in Q2. We expect a couple more in Q2, one or two, and the remainder will be in the back half. One thing to keep in mind is that the actual construction times haven't really gotten longer. The delays in openings that we're seeing are largely due to inspections and permitting, where, for example, before, if you had an inspection, you could get the follow-up inspection the next day. This is like a two-week wait, and that's a lot more typical in urban markets versus suburban markets, which is why we have a lot of optimism for the back half in terms of, you know, not seeing the sort of hiccups that we saw with, say, Philadelphia. The other thing that gives us a lot of comfort is that the remainder of the, of our pipeline are largely in new build outs. That just generally makes for a much smoother process. There's, you know, there's very rarely issues with gas lines or having to, you know, get the floor level or anything like that. That's another tailwind that we have for the remainder of the pipeline. Got it. Thanks for the color, guys. Best wishes. Thanks, Jeremy. Thank you. Thanks, Jeremy. Our next question comes from the line of Sharon Zackfia with William Blair. Please proceed with your question. Hi. Good afternoon. I guess circling back on inflation. Jeff, could you quantify the commodity and labor inflation you saw in the quarter and what you're expecting for the year? We haven't quantified it. I mean, you can see the math, you know, quarter-over-quarter, what we've seen. You know, we were very fortunate this year on the wage inflation or on this quarter, as we also said in the prepared remarks, I think with the price increases, as well as the three initiatives, the technological initiatives that we implemented, which we've mentioned give us about 50-60 basis points of labor leverage. Along with the pricing, we were able to come out with a better quarter this year from a labor perspective. You know, on the food, you know, I already mentioned kind of what's going on with inflation. I'm sorry that I can't quantify what I've seen. As I mentioned, I'm optimistic, fingers crossed, but not promising that we'll see, you know, an improvement or at least a leveling out of food cost. Just to follow up on that, I think you said the 7% wasn't enough to cover all of the inflation you're seeing. Should we kind of read into that to anticipate, you know, restaurant-level margins kind of being under some pressure all year? I know there are other initiatives that you guys have and that you've been working on and abilities to kind of pivot that could help bolster margin. I'm just kind of looking for some clarity maybe on what the messaging is you're trying to get across there. Yeah. You know, the first thing, remember that our Q1 is our, you know, seasonality wise is our lowest performing quarter from a margin perspective. You know, as we go throughout the year, we do expect margins to improve. I do not see much more downward pressure on margins. I really don't. I feel like we've reached the peak. Or getting, you know, nearing the peak, both in terms of wage and cost of goods sold. I mean, if you really look at the numbers, it was really all COGS this quarter really that impacted, you know, our bottom line and our margins. You know, if we can get or, you know, what control we have and, you know, I think we have some control, but a lot of it's out of our control with the macro environment. Once inflation comes down or inflation eases, I really think that our margins are going to see some improvement. And when that's gonna happen, I can't say, but I really feel like we've maybe the worst is behind us as it relates to that. Okay. Then I'm sorry if I missed this, but I don't think I heard any update on loyalty and the membership trends there. I'm just curious, as you're continuing to generate the positive traffic, are you having continued success converting folks to loyalty? Is there any update on, you know, frequency of loyalty versus non-loyalty? Yeah. The number, so loyalty, the rewards member membership growth rate has pretty much been in line with the exceptional rate that we've been seeing, you know, over the last year or two. We're really pleased with that. In terms of the rewards program, the bigger news is really the fact that we're able to begin testing with Punchh in this quarter. Up until now, we've used an in-house platform, and it's been very useful in terms of driving, you know, frequency and increased check spend. In terms of, you know, data leveraging or targeted marketing, we haven't been able to use it. Being able to switch to that, it's really kind of a paradigm shift in our rewards program and our marketing strategy. That, that's going to be, you know, the big news for rewards this year. Okay. Thank you. Thanks, Sharon. As a reminder, it is star one to ask a question. Our next question comes from the line of Joshua Long with Stephens. Please proceed with your question. Great. Thank you for taking my question. I was hoping we could dig into some of the either initiative, platforms, tools, and just your overall approach in terms of going after that first time guest and getting them into the funnel. It seems like that's a big opportunity. You've talked about it a couple of times. I imagine that there's either some tools, marketing or some sort of approach that you're bringing. Without giving away too much, just curious if we could talk about it high level and how you're thinking about that unfolding as we go forward. In terms of our target marketing, just at a very high level, it's gonna be heavily focused on search engine optimization. Whether it's, you know, Google or Yelp, we'll be able to drive that many more guests who are interested in Japanese or sushi. We'll be, you know, we'll be top of mind because we'll be at the top of the list. That's something that we're excited for. The incremental spend that we spend on targeted marketing is not gonna really result in a change in the overall marketing budget. It's gonna be more, we're always optimizing our marketing efforts and we'll be able to reallocate some of those savings towards that targeted marketing, which goes very far, in terms of, you know, the effectiveness on a dollar basis. Yeah, that would be a high level. Then, with the rewards program platform, Punchh, we're really gonna be able to slice and dice our consumers in a way that we just have never been able to do that before. For instance, if, you know, there are guests that are, you know, we know that they eat noodles every time, then we can send them a noodle coupon, you know, for half off at say 4:00 P.M., which is historically, you know, a shoulder period for us. People ask us, you know, "You've got incredible wait times. How are you gonna be able to drive comps in these tremendous over-performing stores?" This is one of those opportunities. You know, it's gonna be harder to get somebody, get additional parties in the door during 8:00 P.M., but that's certainly not the case in 4:00 P.M. That, that's one of the other big things that we're excited about. Very helpful. Thank you for that. Maybe coming back to the inflation topic, from a slightly different angle. Can appreciate the current environment, and I know that we've, you know, you've got an entire team and Jeff's relatively new to the role here. One of the things we had talked about was just maybe some supply chain optimization or just opportunities there. I was curious if you could, again, high level talk about any sort of initiatives you're working on there, you know, leveraging the core brand strength and the broad basket you have. Also maybe any sort of, you know, near term wins or opportunities around where there's room to optimize or maybe drive some efficiency over time as you just, you know, get things in line to help scale the brand. One of the things that I really wanna look at is getting more of our basket into a broadliner. I think that that will really help us. I think there's some opportunity there. You know, one of the things that we've had trouble with over the last year was having to buy some of our fish that we buy from suppliers that were not our regular suppliers. Because during the pandemic, some of our regular suppliers had to throw out a lot, and they weren't able to, you know, fulfill some of the orders that we needed. We had to go to these smaller houses and didn't get, you know, as great a prices. I'm hoping that that starts to come back, and it has actually in fiscal 2023 has started to come back in our favor. Between that and shifting to broadliner and really just looking at all of our contracts, and this is something that I'm doing with G&A, but also I'm asking the purchasing department to do it, for, you know, our food purchases as well. I think that there's opportunities to go back to our suppliers and leverage the growth that we're gonna be seeing over the next few years. If we can maybe, you know, get into some little bit longer contracts with some people where we promise them, you know, the growth, same sort of growth that we're promising out to the street right now. They can see that there's an opportunity for them to make a lot of money in the future. I think we can leverage that into some better pricing. Don't know how well we've done that in the past because, you know, I am still relatively new, but I really want to push those types of initiatives to see if we can, you know, reduce those costs and get our COGS down somewhat. Even in an inflationary environment, I think that's possible. Just to add on that, we do have a number of things that we're looking forward to in the back half of the year, such as, you know, improved supply lines for select items, which means that there's no compromising in quality, but we'll see, you know, a certain amount of savings. You know, those are savings here and there. They're not gonna be enough to really move the needle. What's tricky about our basket is that we've got over 100 inputs. It's one of the reasons we were so resilient in the past year in terms of our COGS. We had our all-time best. It also makes it trickier to, you know. There's never just one big thing that you can address. Like Jeff mentioned, being able to move to a broadliner is gonna be a tremendous opportunity for us. That's very helpful. I appreciate that. One more kind of housekeeping item for me in terms of just we think about the price that you're running now. you know, you'd mentioned taking an incremental pricing window here in December. can you remind us when and how and at what pace you would think about more pricing in the future? just kind of what the, you know, philosophy of the approach is there. yeah, thank you. Given that we just took price in December, I think it's a little bit early to discuss future pricing decisions. I think, you know, the philosophy is gonna remain largely the same. Historically, we've taken price about twice a year, typically to offset minimum wage increases, which we've already done, and then we'll adjust based off of inflation. Given that it's impossible to, you know, predict when inflation is gonna end or what degree it's gonna look like, you know, it's hard for us to give any numbers at this point. That being said, it's really clear that the traffic here is being driven by the value proposition, and so that's certainly something that we don't wanna compromise. Understood. Thank you. Our next question comes from the line of George Kelly with Roth Capital Partners. Please proceed with your question. Hi, everybody. Thanks for taking my questions. Just a couple. Most of my questions have been asked and answered, but a couple for you. The first one, you mentioned on last quarter's conference call about potentially sourcing from Japan. I was wondering if that's something you're still contemplating, and how meaningful could that be to your gross margin? Yeah, that's something that we're still looking forward to. We're in the process of exhausting, you know, the inventory we have with our existing vendors and the agreements that we have in place. That's something that we continue to look forward to. I think even in the last call, we mentioned that we don't expect a benefit from that until the back half of the year. The benefit is gonna, you know, be dependent on Forex. Right now, I mean, the American dollar is so strong that the benefit seems meaningful. Some of that challenge too will be making sure that if we do find a supplier that we're happy with in Japan that we can get with. I'd really like to get that into the broad line distribution once we get that, you know, a little bit more streamlined too, and that will really help as well. You know, so a lot of the suppliers in Japan, from my understanding, won't be able to distribute through a broadliner. We may have some challenges there, that's something that the team is really working through right now to figure out the best path to take. Okay. Okay. Then second question from me is on just your staffing levels right now. Curious if you're seeing much change, if it's becoming easier to find people, what kinda wage pressure there is, et cetera. Just if you could expand on any of those. Thank you. Yeah. In the past earnings call, we mentioned that at our hourly, for our hourly positions, we were about 95% filled. I'd say that today we're 95%-100% at all of our restaurants. We're in an extremely good position. We're not seeing, you know, any quarantining, you know, not net, no quarantining that's impacting operations. You know, last year during this time, we had seating limits or shortened hours. That's certainly not the case now. We're exceptionally happy with the staffing situation and, you know, we're very proud of the work that's being done by our recruiting team, our ops team, training, HR. Just on that note about staffing, I know that there's The FAST Act is probably top of mind for a lot of people on this call, especially because we have, you know, California is our largest market. I just wanna reassure everybody that's listening that as the legislation is written, it does not impact us. It simply does not apply to us. I've heard some people say that, "Look, you know, if everybody's wages are going up, then your wages are gonna go up too, whether or not you're legally, you know, falling under that category." To that, I'd say, if that were the case, then you wouldn't have any people working in, say, Texas or New Jersey for $2.13 as a server, you know, because they can get a guaranteed $8 elsewhere. People clearly go for the server positions because they're very lucrative with tips. With our tips, we're one of the best paying employers, you know, in the sector. The FAST Act for us is not a concern. I think it makes us more competitive, if anything. In past calls, we've mentioned how the management pipeline is one of our key considerations in terms of our unit growth rate. We're happy to say that the management pipeline is exceptionally strong. The opening delays that we've seen to date are, you know, because of permitting issues or inspections, they're certainly not because we don't have management. In fact, those delays have allowed our management trainees to get that much more training. We have a very strong class for this year and next where it's not a concern for us. That's certainly not a gating factor for our continued aggressive growth. Okay. Understood. Thank you. Thanks, George. Thank you. There are no further questions in our queue. This does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.