Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Kura Sushi USA, Inc. fiscal second quarter 2023 earnings conference call. At 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 Jimmy 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 second 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 was submitted to the SEC. Before we begin our formal remarks, I need to remind everyone that part of our discussion 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 put undue reliance 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. Also, during today's call, we will discuss certain non-GAAP financial measures which we believe can be useful in evaluating our performance. 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. Thanks, Ben. Thank you to everyone for joining us today. It's been an exceptional quarter for Kura Sushi. In the previous earnings call, I had mentioned our three goals for this fiscal year. Maintaining great operations and delivering unbeatable value to our guests, continuing our rapid unit expansion, and leveraging our G&A investment. It's my pleasure to be able to say that we are seeing excellent results on each of these goals. We continued to lead the industry with traffic growth of 7.4% in our second quarter. As demonstrated by our traffic performance, consumer sentiment remains extremely strong. Our unit pipeline is the strongest it has ever been, with nine units under construction and another nine executed leases across existing and new markets. Our success in leveraging G&A, combined with improvement in restaurant level cost, has resulted in a 400 basis point adjusted EBITDA margin expansion over the previous year. Our second quarter sales of $43.9 million represent 40% revenue growth over the prior year. Our restaurants delivered comparable sales growth of 17.4%, which breaks down to 7.4% in traffic growth and 10% in price and mix. Despite our pricing, our value remains unparalleled, and consumer sentiment and strength have never been stronger. Our strong sales performance continued into March, with revenue of $16.4 million and comparable sales of 11.2%. Turning to operating results, we've seen material improvement in both labor and cost of goods sold. Our labor cost as a percentage of sales have improved by 160 basis points over the prior year. Our costs as a percentage of sales are approaching the all-time best we saw in fiscal 2022. Between the flattening of food cost inflation and our December pricing, we saw costs as a percentage of sales improve by 150 basis points over the prior quarter. Restaurant efficiencies continue to be realized, resulting in restaurant level operating profit margin of 20.3%. A 260 basis point improvement over the prior year. In terms of corporate costs, we were able to improve G&A as a percentage of sales by 120 basis points over the prior year. Cumulatively, we were able to grow adjusted EBITDA margin by 400 basis points and net income margin by 370 basis points as compared to the prior year. It's been a pleasure to see our strategies for growing corporate profitability succeed, and we believe this is only an early indication of what we can expect as we continue to grow and achieve our true scale. During our second quarter, we opened 3 new restaurants, Philadelphia, Edison, New Jersey, and Oak Brook, Illinois. We are very pleased with the performance of these restaurants with the Philadelphia and Edison locations in particular, underscoring the tremendous opportunity that East Coast market represents. In our previous calls, we have mentioned unprecedented permitting delays that impacted the opening of Jersey City and Philadelphia. We haven't seen any such permitting concerns since, and we believe those are one-off anomalies. Looking ahead, our unit pipeline is stronger than it has ever been, with 9 restaurants under construction and 9 more executed leases. We not only feel extremely comfortable about achieving our fiscal 2023 unit growth guidance, but also have an excellent head start on our fiscal 2024 development. As a note on the cadence of unit openings, we expect 1 opening during the third quarter with the remainder in Q4. Finally, we have made meaningful progress on the implementation of our new wait list app, which we believe has the potential to be the biggest comp driver of our fiscal 2023. As we mentioned in past calls, our current wait list app algorithm provides highly conservative estimate of wait times, particularly close to the end of the evening. We expect the revised algorithm to have three major impacts: an improvement in customer satisfaction, reduced attrition, and the potential to drive additional traffic in off-peak hours. I'm extremely pleased with the progress that we've seen on our marketing initiatives as well. The targeted advertising and search engine optimization we began in December has been highly effective in drawing first-time guests. Our rewards membership base growth continues to be extremely rapid, with a current count of 700,000 members as compared to the 500,000 members we noted during our November earnings call. While the implementation of the new wait list app is a more immediate priority, we are also working on rolling out our updated rewards program with Punchh. We just began our second Demon Slayer campaign in April, which I'm sure you remember from the prior summer as being our most successful brand collaboration yet. As a preview of things to come, I'm very happy to announce that we will be partnering with DC Comics this summer, which is just another indication of the momentum the Kura brand has seen over recent years. I'm incredibly grateful for the consistently spectacular work by our restaurant team members and the corporate support staff that make this possible. With that, I'll turn it over to Jeff to discuss our financial results and liquidity. Jeff? Thanks, Jimmy. For the second quarter, total sales were $43.9 million as compared to $31.3 million in the prior-year period. Comparable restaurant sales performance as compared to the prior-year period was positive 17.4% growth with regional comps of 20% in California and 14% in Texas. The variance in regional comparable sales reflects the relatively easier comparison for California due to Texas' faster recovery from the pandemic. This regional difference becomes minimal with a pre-pandemic 3-year comparison against fiscal 2020 Q2, with California comps of 27.3% and Texas comps of 29.4%. Turning to costs, food and beverage costs as a percentage of sales were 30.1% as compared to 30% in the prior-year quarter. We are very pleased that with the flattening of the inflation curve, combined with our price increases, we were able to minimize the impact to our food and beverage costs and continue to be encouraged in the trends that we are seeing. Labor and related costs as a percentage of sales decreased to 31.5% from 33.1% in the prior year quarter. This decrease is due to incremental efficiencies created by the implementation of technological initiatives, a favorable comparison in the lapping of the impact of Omicron in fiscal 2022, and sales leveraging from increased traffic and pricing. This leveraging was partially offset by wage increases. Occupancy and related expenses as a percentage of sales were 7% compared to the prior year quarter's 7.4% due to sales leverage. Other costs as a percentage of sales decreased to 13.3% compared to 13.9% in the prior year quarter, also due to sales leverage. General and administrative expenses as a percentage of sales decreased to 16.2% as compared to 17.4% in the prior year quarter. On a dollar basis, G&A expenses were $7.1 million as compared to $5.5 million in the prior year quarter, with the increase largely driven by compensation as we invested in both recruiting and internally developing the management talent. As Jimmy previously mentioned, we are very pleased with the leverage we have seen in our G&A expenses and continue to hold G&A leverage as a main focus going forward. Operating loss was $1 million as compared to an operating loss of $1.9 million in the prior year quarter. As a percentage of sales, operating loss was 2.4% as compared to a loss of 6% in the prior year quarter. Income tax expense was $15,000 compared to $3,000 in the prior year quarter. Net loss was $1 million or $0.10 per diluted share compared to a net loss of $1.9 million or $0.19 per diluted share in the prior year quarter. Restaurant level operating profit as a percentage of sales was 20.3% compared to 17.8% in the prior year quarter. Adjusted EBITDA was $2.3 million compared to $0.4 million in the prior year quarter. Turning to cash and liquidity, at the end of the fiscal second quarter, we had $22.3 million in cash and cash equivalents and no debt. Lastly, I would like to reiterate and update the following guidance for fiscal 2023. We expect total sales to be between $185 million and $188 million. We expect to open between 9 and 11 units with average net capital expenditures per unit of approximately $2.5 million. We expect general and administrative expenses as a percentage of sales to be between approximately 15.5% and 16%. Please note that our guidance assumes no material changes in consumer behavior or broader macroeconomic trends. In addition, as we move on from the pandemic era, at the conclusion of the current fiscal year, beginning with our first quarter earnings call, we will no longer quantify quarter to date performance in keeping with pre-pandemic reporting policies. 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. Thank you for your attention. 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. A 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 Jeremy Hamblin with Craig-Hallum. Please proceed with your question. Thanks, and congratulations on the really strong momentum in the business. I wanted to come back to the wait time app and just get an understanding of in terms of, you know, the potential for efficiencies in the process. You know, when do you expect the new version to be going live fully? And what do you think is the opportunity, you know, based on what you're seeing with initial results to potentially have a positive impact on comps? You mentioned that you think some of the kind of lower volume day parts could really see a benefit. Wanted to get a sense for what you think the potential magnitude can be. Sure. Thank you, Jeremy, for your first question. I will be happy to answer this question, but please allow me to speak in Japanese then you want to translate. [Foreign Language] We're currently testing the updated wait list in five stores. We expect a full rollout by the end of the fiscal year at the latest. We're very encouraged by the initial test results. What we've seen is, we've seen very concrete improvements in waiting time accuracy. If we were to say, you know, prior to implementation, about 70% of the wait times were accurate within five minutes. We're now seeing upwards of 85%. In terms of the shoulder periods that we mentioned, we think there's pretty meaningful opportunity, especially at the end of days. You know, those are when you get the worst attrition rates because Say, you and I go to dinner at nine o'clock, and we know the restaurant closes at 10, and the wait time says two hours. We're not gonna wait because we're not gonna get a seat. Because everybody has the same reaction, had we waited, we would have gotten a seat. Just by having that more accurate wait time, that unlocks greater operational efficiencies for that last hour. In terms of the other shoulder periods, one big opportunity we see is in weekday weekday lunches. If a dinner wait time is off by 15 or 20 minutes, it's annoying, it's frustrating, but your day is over, and so you can just wait a little bit longer. If your lunch wait time is off by 15 or 20 minutes, you know, you've lost your lunch, your meal opportunity. We think that once we can really dial in the accuracy and communicate that to our guests, that's a very meaningful opportunity for us. [Foreign Language] While we're tremendously excited for the opportunity represented by by Wisely, just given, you know, the rollout expectations, we haven't built this upside into our existing financial models, into our guidance. You know, if there's a lift, that's gravy for us. Great. That's helpful color. Then, just last one for me. In terms of, I think in April, now you're running, the Demon Slayer promo. Could you just talk about that? I think you ran that the end of last summer, you know, bringing it back. I think it's a pretty significant, licensing, partner. Any color that you might be able to share on that particular, you know, license partner in terms of, you know... The potential to impact results versus some of the other, you know, promos that you've run. I'm sure you remember we did Demon Slayer in July and August of last year. Comps in that quarter were 28%, 14% from traffic. Certainly not entirely driven by Demon Slayer, but it was a major component of one of our most successful quarters ever. In terms of this April's Demon Slayer, it's gonna be, you know, it's gonna be the same format largely, where we have the 15 plates and you get a prize. We'll have giveaways, like shirts and tote bags, et cetera. One thing that is counterintuitive and is tremendously exciting, I was speaking with the marketing director the other day, and they mentioned that the second campaign can actually be more successful than the first campaign. You wouldn't expect that, but what happens is that you're able to, you know, because Demon Slayer is such a big property, you expand your fan base through Demon Slayer with the first campaign. When you have that second campaign, you start with that bigger starting base. We're very excited for what Demon Slayer can do for us. As Jimmy mentioned during the opening remarks, I've been sort of alluding to this in past calls, but we are working with DC Comics, and that's gonna be our first, you know, really major mainstream American property, and I'm tremendously excited for that. Fantastic. Thanks for the color and best wishes. Thanks, Jeremy. Our next question comes from the line of Todd Brooks with The Benchmark Company. Please proceed with your question. Hey, thanks, congrats to all of you on the operating momentum that you're showing this quarter. Very exciting to see. I know, Jimmy, you talked about seeing some signs of early success with the new marketing approach and bringing new customers to the Kura brand. I think we could probably point to maybe that 200,000 jump in the loyalty program as some evidence of that. Do you way to track success, and are we far enough into this that we can start to gauge intent to revisit and how we're converting those customers to additional frequency once they discover the brand? I have one more after. Thanks. Sure. I'm happy to answer this question. [Foreign Language] We began the targeted marketing with Google in December. We're extremely pleased with the early results. Given it's only been you know, 3 or 4 months, but just seeing the traffic strength, we're more. You know, last quarter, we were 700 basis points above Knapp-Track. This quarter, we're actually 740 basis points above Knapp-Track, we've gotten even further ahead of the pack. We're really happy about that. In terms of cost effectiveness, it's really been unbeatable. There's been no incremental spend. We've just reallocated some of our other digital advertising, it's been a home run. [Foreign Language] Well, it's hard to break out what specific, you know, whether Google is delivering those new rewards members or it's just, you know, the ongoing strength. We've been seeing this sort of tremendous growth for the last year or 2, but we're really happy to have, you know, this ongoing growth with the rewards members. They tend to visit about 6 times as frequently as a non-member. Their average check is about 20% higher because they wanna get to the coupon breakpoints or the giveaway breakpoints. About a quarter of our sales are done through rewards. It's a very meaningful part of our business. We're extremely excited to really be able to unlock the potential that a rewards program, especially the data component represents when we move to Punchh. That's great. Thanks. My second question, and I'll jump back into queue after this. 5 units opened in the first half of the fiscal year. Sounds like the pipeline between under construction and executed lease is very strong. What I'm wondering is, with 1 unit opening in Q3, are there any operational pinch points in Q4 to how many units you can open? I'm just trying to think with, I think you guys highlighted that we're mostly new centers, which is a, an easier construction process in the back half of the year. What drives us for where we land between the 9 units and the 11 units for full year guidance? Thanks. [Foreign Language] Certainly the goal is to open those remaining units in Q4 as evenly as possible to distribute, you know, the stress on the opening teams and the operational teams. One thing that we're happy about is that some of these openings are in existing units like California, where we can really draw on the support of our existing units there, and so hopefully not have to leverage one of our opening teams. We're trying to get as in front of the ball as much as we can. It's not a manpower issue that's a bottleneck for us in terms of achieving the higher end of that unit guidance. [Foreign Language] Just to sort of, repeat what Jeff said in the prepared remarks, we're very confident about those 9-11 units. We're extremely happy that we've got such a meaningful head start on fiscal 2024. That's great. Thank you all. Thanks, Todd. Thank you. Our next question comes from the line of Joshua Long with Stephens. Please proceed with your question. Great. Thank you for taking my question. Was curious if we could run through a couple of housekeeping items. The 17.4% comp during the quarter, could we talk about how that progressed through the quarter? I know, thinking back to January, you had talked about some strong 14% area comps of December, and then also there was a bit of incremental price taken from 1Q into 2Q. Just curious if you could kind of outline how that flowed through the quarter and then talk about any sort of acceleration and momentum that you saw in January and February. [Foreign Language] In terms of the difference between Q1 and Q2, the biggest single factor would be the impact of the easier comparison in Omicron. That's probably gonna be, you know, responsible for low to mid-single digits of that comp. Besides that, we're very pleased with the performance of the targeted marketing we began in December, and we as well as the brand collaboration that we did through our partnership with My Hero Academia. As a reminder, we lapsed 2% pricing in March, and so don't think of the March results as a deceleration by any means. When you back out the Omicron impact and that pricing lap, it's completely in line with the Q2 results. We're very pleased with the results for the quarter to date as well. Great. That's helpful. Maybe just kind of level setting that pricing conversation. I feel like you'd taken, I think, did it turn out to be an incremental 700 basis points from 1Q into 2Q? I think you'd taken that in late December, so maybe you didn't get a full 700 basis points for December. Is that where you shook out for the quarter? As you think about rolling into March, to your point, Ben, you roll off about 200 basis points. That kind of has about 13% menu price embedded in what we should be expecting for the 3Q period. [Foreign Language] To clarify, we took pricing during the first week of December, not the first day. The benefit was still partial, but more meaningful than if we'd taken it in the last quarter. The effective price that we were carrying throughout Q2 is 14.4%. With us hitting March, we're rolling out 2%, we'll be carrying around 12.4% for Q3. As we mentioned in the prepared remarks, the traffic being up 700 basis points in Q2, traffic being positive in March as well. We're extremely happy about consumer sentiment. We think we're in a very strong position. Understood. That's very helpful commentary. I appreciate that. Was curious if you might be able to talk about the inflation outlook for the year? Obviously, you had gotten some good visibility earlier in the year. It seems like things were cooling down. That sounds to be more or less the case. Is that what is driving kind of much of what we should expect to see over the course of the year? Previously, you talked about maybe some sourcing initiatives, maybe longer term opportunities to optimize the supply chain. Anything you could share there in terms of just how to think about some of these cost line items as we go through the rest of the year would be helpful. Yeah. Josh, Jeff. In terms of inflation, I think I mentioned at ICR that what we had started to see, we were very happy with, and that came to fruition, as you can see in our results with the, with the cost of goods sold number. The year-over-year inflation is about 7.5%, which is a deceleration from what we had seen in Q1, where we believe the year-over-year was about 10%. The numbers are improving. They're continuing to show, you know, we're continuing to be happy with what they're, where they're coming out. What we're getting really a double benefit because we're seeing not only a leveling off of the inflation, but because we took the pricing increase, we're kind of getting that benefit and that flow through on both sides of that equation. Going forward for the rest of the year, I'm really happy with where our COGS forecast is. Great. That's super helpful. With some of the tech initiatives or efficiencies from tech initiatives have been talked about in prior calls and maybe alluded to a little bit here. You know, can you talk about? The impact of those initiatives in terms of driving the better year-over-year labor margins. I imagine some of that was price, some of that was operational execution, just momentum. You have had some pretty interesting tools, whether it's, you know, robot servers or order the table drinks. I think there had been some discussion of maybe some robot dishwashing at some point. Could you remind us kind of what is embedded here in the 3Q results and how we might think about the rollout of some of those initiatives over the course of the year? [Foreign Language] In terms of the labor impact of the tech initiatives that we rolled out last year, the touch panel drink orders, the tableside payment, and the server robots. As we've mentioned in the last call, we... We're seeing about 50 to 60 basis points in labor improvement. We're continuing to see that today. One thing to keep in mind is that when we rolled out the robot servers, that was also a traffic lift as well because the experientiality. It's one of the reasons, you know, our Q4, which was the first quarter we had a full rollout of robot servers. We, you know, our traffic was up 14% in part because of that experiential addition. As we lap that rollout in Q3, we'll still have the labor benefits, but we're not gonna have the traffic tailwinds that we had from that, you know, from the novelty of the robot servers. [Foreign Language] In terms of the 50 to 60 basis point improvement we just mentioned, we're very, it's a very hard number. It's a very concrete number for us. We can see it reflected in the schedules that we've built and the working hours that are required to operate our restaurants. But people might notice that, you know, we didn't get the full leverage flow through from the pricing that we took in December in terms of labor. That's because we're seeing about 10% labor inflation year-over-year. We're hoping for that to ease, but it's not baked into our expectations. So that's gonna be, you know, an ongoing factor for us in Q3 and Q4. We're gonna do absolutely our best to manage that, but that is, you know, the labor market that we're in right now. In terms of the wait list, the labor advantage of that is really gonna be coming more from sales leverage. It's just being able to serve more guests per day, which allows you to spend your labor dollars more effectively. In terms of the dishwasher, the technology is wide. It's ready to go. It's just a matter of getting certification, but that's a pretty opaque process. Historically, it's been one to two years. Given just how much upside we see in it, we're gonna be pushing as much as we can. Ultimately, we're at the certification agency's mercy. The expectation would be that it would have at least the impact of those three initiatives, if not more. Great. That's helpful. Last one from me When we think about these G&A efficiencies, how much of that is, you know, being driven by some of the things that you talked about, Jeff, when you onboarded in terms of opportunities to optimize spend and really just think about the timing and cadence of investments versus just some of the near term sales leverage as we think about some of the guidance range being given in terms of, you know, G&A margins? Is there more to come there? How early on are we in terms of really being able to optimize the overall spend in kind of G&A investment pipeline? We're very happy with the 120 basis that we in leverage that we achieved in this quarter. That's just the start. We're continuing to work hard. One of the reasons we're being able to see benefits right now is the last 12 to 18 months, we spent a lot of money investing in the office in terms of C-suite and vice president level positions, expensive people. We've built that team out now. We're not gonna have those additional hires of that magnitude going forward, that's gonna continue to help the G&A leverage. The other thing that's gonna help the leverage on the regional side is as we continue to infill markets with additional restaurants. We'll be able to be much more efficient with our area managers. Instead of an area manager having, say, five or six restaurants, maybe in four or five states, we'll be able to compartmentalize them more into restaurants that are closer, and we'll be able to save on travel, and it'll just make their time much more efficient as well. Those are the two things going forward that I believe are really gonna deliver more G&A leverage. There is more to come. We haven't given a timeline on when we're gonna get down to, you know, a single-digit number. However, what we've seen so far has been really, really encouraging, and there is more to come. Great. Thank you. Just to add on that. The G&A spend in terms of, or in terms of operations like the regional managers, that spend is gonna sort of follow a bell curve. As Jeff mentioned, you know, as we infill, we'll be able to assign more units to each regional manager. The opening teams are a pretty meaningful part of our G&A as well. We've got two right now. Each costs about $1 million per year to operate. When we were talking about the pipeline before, we mentioned how, you know, markets like California, you don't need an opening team. As we continue to infill those very meaningful, you know, G&A investments become unnecessary and can actually, the hope is eventually those teams will just, they'll become, you know, store managers or regional managers, and we won't need opening teams once you reach a certain point. Also while the expensive G&A hires have ceased, we've filled most of those positions. We're not gonna cut back on making sure that we have a development and real estate team in place that we need in order to keep the pipeline as robust as it is. As Jimmy mentioned in the prepared remarks, we have nine restaurants under construction and nine more executed leases. We need to continue to add to that pipeline, and we wanna make sure that we have the right teams in place in order to keep it as robust as we need it to be in order to continue the growth pattern that we've seen, you know, in the number of units. The other area that we just talked about is regional management. As we add restaurants, we are gonna have to continue to add area managers to make sure that we continue to support the restaurants and provide the best customer guest service that we possibly can that we're known for. Thank you. Thanks, Josh. Our next question comes from the line of Sharon Zackfia with William Blair. Please proceed with your question. Hi, good afternoon. My cell actually went out for a part of Jeff's commentary, so I apologize if you talked about this. In terms of the development pipeline, how far out now are you working? Are you working on kind of fiscal 25 at this point? Can you talk about kind of the quality of the kinds of sites that you're able to get now and maybe contrast it to, I don't know, 2019 or before the pandemic? [Foreign Language] I, generally speaking, the units in our pipeline, they're for fiscal 2024. There's a couple of fiscal 2025 sprinkled in there, but what we're looking at is mostly 2024. [Foreign Language] I know for people that are familiar with the story, we mentioned how during the pandemic, we made very aggressive investments in terms of real estate. We built that $45 million revolver with a parent. We hired our first chief development officer who's opened thousands of units. We aggressively signed leases in places that we would have otherwise been inaccessible to us at that point, like, you know, Westfield. Because we have one to two-hour dinner lines, we're great tenants, and now Westfield wants us everywhere. At the time of the, you know, when we first signed these leases, we were extremely excited, but there was, you know, an internal concern that this boost would be limited to the fiscal 2021 and 2022 stores. What we're seeing is that this success is really just. It's snowballed. It's just getting better and better. Our expectation is that our AUVs are going to stay just as strong, if not even stronger. The development is as strong as it's ever been. We're very pleased. Great. Sorry. I apologize. I apologize. Sorry. Did we answer all of your question? I had a follow-up question, but Jimmy, I didn't know if you had more to add. No. Okay. Just one follow-up. I mean, the traffic growth remains very impressive. I guess I'm curious, are you seeing consumers try to manage the check at all, though, when they come in? Are you seeing fewer plates or lower beverage attach or anything that might suggest any kind of, you know, check management starting to creep into the business? [Foreign Language] We're extremely pleased with consumer sentiment. As we mentioned earlier, of the Q2 comps, 14.4%. Ten of that, we saw about 10% price and mix. That's, you know, that's great. Last quarter of our 6.9% comps, only 2.9% was from price and mix. We're seeing even better flow through than before. The guests are eating more per plate, more plates per person than they were over the prior quarter, and our average check has grown to about $28. In spite of the pricing that we're seeing, guests are actually eating more. It's been very encouraging to see. [Foreign Language] Great. Thank you. We believe that Kura has fundamental advantages as a concept, even when consumer sentiment is weak. Certainly, we're not saying that it is, but we, you know, just given what we've seen, it has been extremely strong. If there is a downturn, we do have some structural advantages. I mean, if you're reducing the frequency of times that you're dining out, you want your entertainment dollars to go as far as possible. You can make a sandwich at home, you can even grill a steak at home. Nobody makes sushi at home, certainly not with a conveyor belt. That's one of the reasons that, you know, our traffic has been so strong. Initially, the way that we build our, the way the guests experience the meal, where they build it plate by plate, means that nobody's ever priced out. We're in an excellent position. We're very pleased to be where we are. Okay, great. Thank you. Thanks, Sharon. Thank you, Sharon. Our next question comes from the line of George Kelly with ROTH Capital. Please proceed with your question. Hey, everyone. Thanks for taking my question. Just a couple for you. The first one, I was curious if you could update us on a couple sourcing initiatives that you've talked about in prior calls, specifically the potential for Japanese sourcing and then the utilization of broadliners. Yeah. We've started that process. We're starting to work with Sysco a little bit. We're testing some of the deliveries in some markets. That's something that we're just not gonna flip the switch on because getting the products in at the right time, you know, efficiently and effectively is so important that we have to take this slowly and make sure that we're completely dialed in before we flip the switch to the whole company. We do have some initiatives that are coming up. We've got shrimp and salmon that we have been able to purchase at a much more favorable price. It'll be coming in in May and June, so that's upcoming. I think we've talked about that in the past, but that's an exciting development. One thing that I'm really excited about too is it'll be much easier for us to forecast where we're gonna be in terms of COGS, because in the past, we've kind of been riding the market. The markups were kind of around, you know, across the board. Once we get everything into more of a broad line system, we'll be able to know exactly what the markup is, exactly what we're paying, and we'll be in a much better place in terms of forecasting. Not to mention our actual results going forward should be better as well. It's in process, but we're taking it slowly to make sure that we're really dialed in before we roll it out system wide. If I were to just attempt to repeat what you just said, is this something that you're still kind of assessing and uncertain as to whether you'll kind of roll it out across the base? Or would you expect this to be something that you fully implement by maybe the start of next fiscal year? I believe by the start of next fiscal year, it will be implemented. This is something we are doing. We're just taking it slowly to make sure it's being done properly. Okay. Understood. Thanks. Second question for me, just curious if you are contemplating taking additional pricing this year. another question is just the timing of the DC Comics partner. When is that stuff? Is that in July and August or if you could specify that. That's all I had. Thank you. [Foreign Language] We have no specific plans at this point. There are 2 things, you know, that are useful to consider. One would be that we're gonna be lapping 6% price in July. We'll no longer have that benefit. We are still seeing that, you know, that 10% labor inflation that Jimmy had mentioned. There are typically minimum wage increases in July in our especially in our Los Angeles markets. While COGS inflation is easing, we are seeing ongoing inflation in, you know, non-COGS expenses. While we have no current plans, you know, we're gonna be flexible in terms of making sure that we're able to make the best decision possible for that point in time. What we'd like to reiterate is that whatever pricing we take would not be a margin driver. That's not why we take price. It would be purely to offset increased costs. [Foreign Language] We're really excited about DC Comics. We think it's gonna get us in front of a new and different audience from what the past collaborations have done. We haven't baked it, you know, like, baked in a bonanza, and we'd be really pleased to see it beat Demon Slayer. One thing is that DC will be starting in August, whereas Demon Slayer had July and August. Understood. Thanks. Thanks, George. We have a follow-up question from the line of Todd Brooks with The Benchmark Company. Please proceed with your question. Hey, thanks for squeezing me in. Just going back to the commodity side. I believe across the course of last year when demand was robust, your supply chain had issues keeping up. Your, your vendor base got a little deconsolidated. As we're looking towards that predictability, Jeff, that you talked about with COGS forecasting going forward, can you maybe review how the process of reconsolidating with fewer vendors, more volume, and then maybe the scale advantages that you're finding as you do that? My follow-up to that one is, given the improvement that we're seeing with the commodity inflation side and the strong sales results, is there a way to think about an exit rate with the initiatives that are in place for this year for where restaurant level margin should be targeted at as we're thinking about going into 2024? Thank you. I'm gonna let Jimmy and Ben also elaborate on kind of last year as well, because I wasn't with the company last year. My understanding, during the pandemic, what happened as we were coming out of the pandemic, is a lot of our suppliers had stopped having on hand as much product as they did because they ended up throwing so much away during the pandemic. They were a little bit shy in terms of how much they had on board. We had to go to some other suppliers, that really drove their COGS up last year because we had to go to a new supplier, we weren't able to really negotiate with them. We were kinda had our backs against the wall a little bit and had to go to them and say, "We need this product." They were able to provide it at the quality we needed, but we did pay for that. There were no vendors that I know of that we really, you know, any of our large protein vendors especially, that we really lost. It was just more of a shortage of the supply they were supplying. We're back to buying our products from the pre-pandemic suppliers for the most part. Is there anything additional? No, I think, you know, you explained everything. Okay. Todd, I'm sorry, can you ask your second question again one more time, please? Just I'm listening to the commentary on the call and the normalization that we're seeing in inflation and the sequential improvement and scale benefits, the Sysco rollout proceeding over this year. I'm just trying to get my mind around kind of what you guys are thinking maybe for an exit rate for restaurant level margins kind of going into fiscal 2024, so we could start to think about earnings power in that year. Thanks. Our eye is always on the 20% restaurant level margin price. That's pretty much the gold standard in the restaurant industry. In fact, hitting the 20.2% that we did in Q2, I believe is one of, if not our highest Q2s of all time. We're very happy with that because Q2, our seasonality is Q1 is our slowest quarter of the 4, and then it gets sequentially better from there. Q2 is better than 1, 3 better than 2, and Q4, which is our summer, is our best quarter. To be able to hit a 20% restaurant level margin in Q2, we're very happy with. We'll continue to chip away at it, but that number is a pretty good number, and we're not gonna sacrifice guest service or food quality in order to drive that margin, you know, much higher than that. There is a little opportunity, I believe, as we continue to leverage. We're happy with the number where it is. Yeah, just. Two things to add on that. I'm sorry. Go ahead, Jimmy. Sorry. Let me give you a different explanation. [Foreign Language] As a reminder, that labor inflation that we mentioned, we do expect that to continue through Q3 and Q4 and potentially past that. Please be mindful of that as well. A couple other notes just from my end. Thinking about exit rates might not be super helpful for your modeling purposes just because of the seasonality that Jeff mentioned. Q4's restaurant level operating profit margin and Q1's restaurant level operating profit margin are materially different. If you go through any of our past things, I'm sure you'll see that. Just to, you know, echo Jeff's note, we're very happy with that 20% plus. It's one of the industry bests. It's great to see ongoing improvement, but in terms of the major opportunity for top and bottom line, that's gonna be the ongoing unit expansion and leveraging of our G&A. Great. Thank you all. Thanks, Todd. Thank you. Our next question is a follow-up question from Joshua Long with Stephens. Please proceed with your question. Great. Thanks for squeezing me in for the follow-up. Was just curious, it looked like there were maybe a couple remodels during the quarter of maybe some of your, you know, older units. Just curious if that was maybe one-off, a one-off opportunity or, you know, a remodel or something a bit more comprehensive is in the works. Just, you know, just curious on either, you know, set up for that and/or what you learned by going back and looking at some of those. I think it was in your California market. At the time of the IPO, our parent company actually worked with a very famous designer. He's the guy who did the UNIQLO logo. That's probably what he's best known for the, for the West. He's the guy who did our new updated logo, and he developed an interior design update as well. We've been doing those updates, you know, since 2019, 2020. We only have six left. They cost, on average, maybe $200,000-$300,000. You know, after those six, we're caught up. Great. Thank you. Thanks. That concludes our question and answer session. That also concludes our conference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.