Gentlemen? Okay, all right. Yeah, this works great. All right, good to see everybody. Hi. Doing great? Yes. Good morning. Good morning. All right, are we on? Okay, great. Thank you so much. My name is Joshua Long. I'm the restaurant analyst at Stephens. Really excited this morning for you all to join us for Kura Sushi, one of my favorite growth stories here in the restaurant space. Really excited about the opportunity to dig into the story in the next about 25 minutes or so that we have. So I imagine that there's a lot of familiarity across the room. If not, this is one to put at the top of your list in terms of next-generation growth concepts. Really touches on a lot of the elements that we write about in our research, in terms of differentiated consumer brands that really have a unique offering or experience. It's not just about the food, not just about the value, but really the cohesive aspect of technology, consumer experience, and really brand reach. So as we think about kind of where you all are going this morning, can we talk a little bit about just, I mean, high level? I know we only have a little bit of time here, but you've already done this growth story, essentially. We've seen this work really well in Japan. Jimmy, you've had a lot of experience with this, and are bringing this over to essentially do this again in America. Can you talk a little bit about kind of the journey that you've, you know, been on thus far and where we're at today? Sure. Please allow me to speak in Japanese. He's gonna translate. It's basically impossible to overstate the differences between Japan and America. So the first 10 years that Jimmy spent in the States was really an incubation period to really understand those differences and adapt for the American market, primarily in real estate, site selection, and menu development. Then the service model is completely different as well. The expectation for table touches and tipping is completely different from Japan. So adapting the front-of-house layout to best, you know, take advantage of the tipping culture was another key effort in those first 10 years. So when we think about the differences there, I mean, from the outside looking in, you make it seem really easy, right? And the restaurants aren't necessarily complex, but they're hard to do and do consistently. But I think you're at 56 restaurants today or around there, with a long-term opportunity to go to 300+. I mean, I know the number is a little bit stale at this point, but we feel pretty confident that, at least I do, that the brand's in a much stronger position than it was even a couple of years ago when you came public. Can you talk a little bit about some of the momentum that was being discussed in the most recent earnings call? I know, it sounded like that momentum had carried through the quarter and even into December. Some of that's some underlying demand, but then also there are some interesting things that you're able to do now in terms of, tapping into consumer preferences or kind of driving, some of that traffic with some of your new technology. We're exceptionally pleased with how our restaurants are performing. It's been three years since the pandemic. Our restaurants have fully recovered. Traffic is up. You know, traffic has been consistently above Black Box for almost two years now. We're very pleased to see that. The new stores that we're opening, whether they're in existing markets or new markets, they're just extremely strong performers. Demand has never been stronger, and we're feeling very, very good. We also have so many different levers to pull for the back half of the year, and we're already beginning to see those benefits. You know, we saw that in Q1 and into December. One of the things that we're most excited about would be the new rewards program. In the November call, we mentioned that new member registrations, you know, excluding all the migrating users, had doubled with the new program. We're extremely pleased to be able to say that in the most recent earnings call, that it actually accelerated to a tripling, which I don't think any of us had expected. And so that was one of the meaningful tailwinds that we've seen in the most recent quarter and since. We also have, as everybody knows, we have brand collaborations every two months, and this year's pipeline is the strongest it's ever been. And so we're extremely excited for the last four months of the year, which are also, coincidentally or not so coincidentally, our strongest sales months, and so we've lined that up deliberately. Jeff, do you want to talk about how we lapped price in December and what we're seeing as a result of that? Yeah. So we've had a lot of mix pressure over the last probably 3 quarters throughout the year. Our mix was down close to 10% for the last 3 quarters, and we get a lot of questions about that. What's going on with mix? And we did lap price of 7% on December sixth. So right now, we're running about 3% price. We took 1% down January first. But we didn't release our December number, our December comp, but I'm proud and happy to say that we will let you know that our mix decline has decelerated from a 10% mix decline to only 5% in December. So we get that question a lot, and we just wanted to let everybody know that it's been cut in half, so we're very happy with that. So that was our expectation, that there would be a mix tailwind from the lapping of price, but to see it so immediately was, a very pleasant surprise. Yeah, we hope the trend continues, but December was good. Yeah, absolutely. I mean, that is something that we end up talking a lot about. I mean, it... There's some dynamics there, especially as you think about year-over-year laps with some of the promotions that you did last year that were particularly successful. And so it's kind of a, you know, air quotes, "good problem" to be lapping some of the mix issues that you have with—'cause they're not really issues, right? I mean, you had very strong results last year, and as we talk about on the—as you shared, that the underlying consumption trends on a per plate, you know, perspective are strong, if not getting stronger, right? Right. So this isn't some sort of indication of the guest materially changing, but there are some pieces that are flexing in the story. At the end of the day, this is all anchored by a really strong value proposition that is at least 50% less expensive than your kind of mainstream sushi peers. Is that still how you're thinking about it? That is absolutely true. We think that our value proposition is effectively unbeatable. We think that's only gonna increase on April first in California, when fast food chains have to take the $16-$20 an hour increase in minimum wage. We don't. Yeah. Our employees, at least in California, in the back of the house, are tipped. Mm. We don't believe we're gonna see any issues related to labor, you know, in terms of acquiring talent. So we're pretty excited that the value proposition for Kura is gonna even increase, and the gap between QSR and fast casual and Kura is going to narrow. Yeah, I mean, some real structural items that really work out to be in your favor, and- Yeah, that's what gave us the confidence to only have to take 1% of price after we lapped 7%. We've also seen, you know, in Q1, we saw 4% year-over-year COGS deflation, which we've actually been able to reinvest into higher quality proteins. Our proteins have never been better. And so in terms of the value that Jeff had just mentioned, it's only getting better and better. Right. I mean, and that was an exciting point for us as well. I mean, nice to see margins come in line, if not better, but then also really exciting to be able to talk about opportunities to reinvest back in the experience. And, Jeff, that's something you've talked about. I mean, you already had really best-in-class, COGS margins with kind of in that 30% range. We've seen them dip down a little bit below, but I think you shared that you're generally comfortable in that kind of high 20s-30%. That's really more of the sweet spot versus letting, some of that kind of leverage flow through the model, really taking the opportunity to reinvest back in the protein quality, maybe the new menu items, and leverage some of the, kind of the culinary capabilities of your new corporate chef. Yeah, we're, we're happy with 30%, you know, we could get into the high, you know, 29.5%-ish range, but I like seeing it around 30%. You know, anything lower than that, we'd probably have to be compromising food quality. Our margin of 21.9% in fiscal 2023 was one of the industry-leading, numbers. We're happy where that is. We might get a little bit of leverage as we continue to increase our AUVs. But I think the bulk of leverage that you're gonna see in our company as far as EBITDA is gonna be in G&A. As we, as we open up and as we continue to infill our markets, we're gonna see some leverage with regional G&A, with our managers not having to travel as far, you know, not have five restaurants in three different states. When we train MITs for that market, they're not gonna have to fly somewhere to train. They're gonna be able to train in their market. So I think we're gonna see, continue to see leverage in G&A. And in the last two years, well, last year we had 80 BPS of leverage, and this year we're projecting 50, so 130 BPS over two years, we're very happy and very proud about. Yeah, not, not too bad. And I think, I mean, that could, number could have even been higher. There was maybe some reinvestment in there as well, but the underlying point is a lot of strength. And one of the points from our conversation last year was about the opportunity to drive G&A leverage, and it seems like that's coming together quite nicely. It is. The team has done a really good job this last year. One of the pieces that, we've also kind of hinted at here is just the technology tools and some of the things you have in the back half of the year, kind of going back to that mixed piece. Ben, you mentioned the opportunity for, you know, maybe the, the marketing or branding around it is gonna shift, maybe tableside ordering- Mm. Kind of the capability of bringing in kind of your own device to then, you know, particularly thinking about some of those larger parties who, if you're stuck on the outside of the booth, maybe you don't engage with the brand nearly as much. Seems like that's an opportunity for driving attach and just engagement with the brand. Is that part of some of that mix amelioration that you're expecting? Absolutely. So if for people that have been into our restaurants, if you're at a party of four, if you're on the perimeter, you need to reach across your buddies to grab a plate or order from the touch panel. And so if I'm on the outside, I never order from the side menu, which is definitely, you know, an obvious side menu pressure. I'm very pleased to be able to say that, as of yesterday, we've actually expanded that program to more restaurants, and we expect that to, you know, be a pretty smooth rollout. The technology's already battle-tested. The operations are. You know, there are no operational issues. It's just a matter of rolling it out to additional restaurants. And so between that, lapping the price, and then with our corporate chef, we think there's a lot of tailwinds in terms of the mix. One thing that we think about a lot is at the time of the IPO, our guests were eating five plates per person on average. Now, they're eating six plates per person. And in terms of driving check, there's really nothing better than being able to say, "Our guests are eating more because they like our food and they want to eat more," and that's what's growing our check, and that's our full expectation for what we can do with the side menu with our new corporate chef. What's really exciting about, for me at least, is we think about just the potential for macro overhangs or kind of concerns. I mean, value is key to any of those conversations, and there's not a better example of really strong value proposition than something like Kura Sushi, where you can go in and you build your experience plate by plate. Exactly. Right? So if you wanna go in and spend as little as possible or have just the most value-oriented experience, you can. But if we wanna go in and really hit those thresholds and get some of the great giveaways that you have with your Bikkura Pon and the different IP collaborations, that's, you know, that's also on the table as well. So there's a lot of flexibility that I think is pretty unique in terms of when we think about just you know, kind of the restaurant industry and some of the peers that you might go up against. Jimmy, can you talk a little bit about the unit development pipeline? And, you know, over the last couple of quarters, there was an opportunity for that to accelerate. You had seen that on the horizon. That's coming to fruition now, and that's pretty interesting and exciting, especially when permitting delays and just some of the headwinds around supply chain have really kind of lagged or caused some lags for your peers across the industry. You're, you know, a little bit of a bright spot there in terms of being able to actually move that development target up for the year. Yeah. What's driving that? ...guidelineをこうupdateした。この一番の理由は、先ほど出たpermitting delayのところが、この問題がもう解消したっていうのが一番大きいですと。strategy、real estateのstrategyに関しては大きな変更は変わってないですと。これが一番非常にでかいですと。Permitting delayのところが解消されたっていう。 So there haven't been major changes really in our real estate strategy. It's just that the roadblocks that we were seeing last year in terms of permitting are gone. And seeing them be resolved as thoroughly as they have been, that gave us the confidence to raise our guidance in those recent earnings. あと、何ですかね、これまでちょっとFY23でいうとshippingのdelayとか、その辺もそういったのも全部なくなってきたんで、とにかくFY23で発生したdelayっていうのが、まあ今期は非常にスムーズにいってるんで、このまま続けていけば、まあ、さらにこうね、アップする可能性も十分出てきてるんで、非常に今の状況に関しては、ハッピーです。 In terms of fiscal 2023, we saw some shipping delays as well. Things like conveyor belts, you know, building materials, and those we're very happy to say are gone as well. The issues that we were facing in fiscal 2023 are really largely a thing of the past, and if things continue as they have, you know, we feel that there's certainly possibility for us to raise guidance in subsequent earnings calls as well, later this fiscal year. Also, not only has the pace of this store opening accelerated, but the results of the opened restaurants are also very satisfactory. FY23, FY24, new markets, not states, but markets like Tampa, Pittsburgh, and New York, we went to various places, but really all of them received very good responses. Very much, we think our this portability has been proven, and we are very encouraged. We're very happy to be able to say that we're hitting records in terms of new openings. We've never had such a front-loaded year, but what's even a greater source of pride is really how strong the newly opened units are, whether we're in new states or new markets. We're in New York, we're in Pittsburgh, we opened in Tampa, we just opened in Missouri, and all of them have had incredible receptions. They're... You know, Missouri just opened a couple of weeks ago, and we had a line that went three blocks. New York has been open for months, and those are, you know, very quickly becoming some of our strongest restaurants. We're just extremely happy to see our portability continue to be demonstrated across the country. I think the permitting delays that we're not seeing this year. I hear from some of our peers that they're still experiencing quite a bit. Yeah. You know, in the past couple of years, we were having trouble getting inspectors to even show up at the restaurant. Now, they come in, and they give us ridiculous demands that have nothing to do with code or the law, and we'd do it overnight, but we're getting them in the restaurant. Yeah. So that's half the battle. Right. Half the battle, for sure. I mean, getting either, permitters and, kind of city officials or guests in there, and you're doing really well on both those accounts. When you think about the relatively small size of the, of the store footprint now versus where you can go over time, and particularly the decentralized nature of it, I mean, the, building more stores is a key part of driving that awareness. You're, you're attacking that and doing very well there. Can you talk a little bit about the marketing? I know in, in previous calls and, over the last couple of quarters, we've talked about the opportunity to optimize that and really, you know, drive leverage across the social media, kind of, you know, targeted search, et cetera. You know, where are we at with that initiative? Yeah, we could not be prouder of the work that our marketing team is doing. They just continue to outdo themselves every year. So part of our historical strategy was to do paid advertisements, paid videos on social media, originally Facebook, Instagram, that's evolved now into TikTok. Some more things that we've added to our advertising or marketing suite would be the use of influencers. At our most recent opening, I think we had 11, you know, combined follower count of over 1 million people. One very awesome thing we've added to our toolkit is coverage from local media. Just given the uniqueness of our brand, it makes for a compelling news clip when people come into our restaurants and shoot the conveyor belts, shoot the robots. We've been getting a lot of local media coverage, which was just not a thing a couple of years ago. In terms of marketing, the brand collaborations that we do are always very important. One example that I like to talk about is with the Demon Slayer campaign that we did a couple of years ago. They actually had the voice actors for the cartoon come to our restaurants and eat our food in character. And we put those videos on TikTok, and so that was a huge hit. You know, people might not have immediately, you know, realized or they, they might not recognize the name Kura, but when they see Kura open in their towns, they're like: "Oh, this is the restaurant that I saw on TikTok," which has really sort of laid the groundwork for our, our growth in, you know, new markets. The other thing we do, too, is leverage influencers in our openings as well. One recent opening I was at in the Boston area, we had 11 influencers in, in the building with over a million dollars or 1 million followers collectively between the 11. So we can... And that's very, very cheap. We, you know, we don't pay them all that much and give them free lunch, and they, they spread the word on their, on their pages. Yeah, some amazing tailwinds to the brand there. And in addition to, Ben, what you've talked about in terms of maybe getting a more mainstream, if I can use that word, collaboration pipeline as well. Obviously, you have some really strong strength and depth in the kind of anime category, but then most recently, you've moved into more mainstream categories like DC Comics and, you know, Charlie Brown, Snoopy with Peanuts. Right. I mean, that has a wide appeal as well. Can you talk about just... I mean, I know you can't tell us the specifics, but it feels like that pipeline has been strengthening. Can you talk about the work behind that and kind of, maybe what we can be looking forward to over the course of the year? Absolutely. So I compare this very much to the awareness that we're, you know, for our real estate team, where six years ago, pre-IPO, people didn't know who we were, let alone what revolving sushi was, and so it was difficult to plead our case. And so every year there's a licensing expo in Las Vegas. It's in June or July, and I was there the year before the IPO, and people were like: "Who are you? Please stop wasting my time." And now, you know, we're partnering with DC. The brands are approaching us, and every year we're just getting bigger and bigger brands, better and better brands. And so before, it was very opportunistic in terms of, let's just get whoever we can get that we think is the best. Now, we can actually build strategy around it. So for instance, you know, this year being able to schedule the strongest collaborations for the last four months of the year, which are the strongest sales months of the year, that's something that we can do now because we have- ...We're in a position that we can request the scheduling, and so we're very happy. You know, the pipeline for the remainder of this fiscal year is the strongest it's ever been, and I expect to be able to say that every year going forward. Very exciting. Jimmy, when we think about where the brand has come from and basically the, you know, the core strengths there, technology is a key piece of how this all works and really a true differentiator. There's a moat around the brand. You have an amazing portfolio of patents and IP and, you know, maybe things that aren't always guest-facing. Can you talk about technology, the importance of that to the overall restaurant model, and maybe some of the things that are coming forward? I know there's quite a pipeline there in terms of both cost saving, but then also efficiency initiatives. Even before we talk about cost savings or efficiencies, the technology really undergirds our entire concept. It's the reason that we're able to scale, it's the reason that we exist as a chain, and it's the reason that there aren't other sushi chains in the United States. It's really prohibitive in terms of the skill floor. It's a five-year training process just to learn how to make rice balls. It's obviously you can't build a chain with a five-year training period. The technology that we have, both stuff that's bought off the shelf as well, you know, the 50 patents or so that we leverage from the parent, is really what allows us to do 20 to 25 to... You know, this year we're guiding on the high end, 30% unit growth per year. We believe that we're in a truly unique position in that we're able to leverage our relationship with the parent. So for us to be able to make the kinds of investments in technology that our parent is making, you'd need a restaurant base, 200 units-300 units for it to make sense. But at that point, you know, it's prohibitively expensive to go back and retrofit your restaurants with those technologies, and so the upside is very limited. We're truly unique in that we only have 50 units. We're able to put these technologies in at the infancy of our life cycle and really benefit the most from them. So as you mentioned, or as we've mentioned in the past, we have those dishwashers coming in. We're really excited about those. We also have this battle-tested technology from the parent, where... So we've got these sushi robots that produce 30 sushi balls per minute, and if the sushi robot is here, there's a two-person team that assembles the sushi. I would grab the sushi balls, put them on a plate, and then Jimmy would put the fish on. In Japan, they're sort of like a revolver cylinder, where the sushi robot would put the sushi balls directly onto the plate, and then a conveyor belt would take it to Jimmy. And so my position would be eliminated. If you can see how meaningful that upside would be, where you can eliminate one person from every two-person team. But, you know, going back to how we only took 1% price earlier this year, it's because we can have these, you know, technological initiatives to offset labor inflation that we're able to really provide value to our guests. It's really, it's the DNA of our concept. And people like to ask: "Is there an end to this?" And my answer to this is, it's just no. I mean, our parent has been doing this, or majority shareholder now, has been doing this for over 40 years, and this is, you know, just who we are. It's what we breathe. It's. There is no platonic ideal to a restaurant. It's just a constant iterative process. Yeah, they have a 15-person R&D team, and I'm in constant contact with them. We're able to leverage all of them. It's a huge, huge weapon. Yeah, the way, the way our relationship works is for 50 basis points of sales, we get access to everything they do. So we basically have a 0 R&D budget from a technology perspective, other than the 50 basis points. And they can test 100 things, and we can cherry-pick the two or three that we really like, that they've tested that work. Yeah. So it's a really good relationship for us. Right. And again, it goes back to that really strong, competitive moat that, you know, we've talked about before and really supports the overall, over time, you know, unit growth profile there. With the couple of minutes we have left, can we talk a little bit about the opportunity to backfill markets? I mean, that's gonna be another element to drive awareness as well. For a large part of your history, it's been amazing to see that the top three best-performing restaurants were pretty spread out, whether it was Washington, Texas, or even New Jersey. I know some of—there's been some movement there where other markets have come back to life and really taken advantage of the momentum. But as you backfill markets, what are you seeing there, and how do you think about just the overall opportunity to raise awareness for the brand? So, so as we mentioned earlier, we're very pleased with how we're performing across markets. We really have yet to enter a market where we haven't seen a very warm reception. But just given... So for people that are newer, we have one restaurant in the Pacific Northwest. It does more than double the system AUV. It's, it's the single best restaurant in our, in our suite. And we, we've been very selective when it comes to adding a, a location to the Pacific Northwest because we know how much of a great opportunity it is. We really don't want to squander that with a subpar location. And we're very pleased to say that after years of waiting for the right location, we now have multiple leases in the Pacific Northwest. And so we're hoping to replicate what we've done on the East Coast, where on the strength of that first restaurant in Jersey, we've opened, you know, a dozen or so restaurants all across the Eastern Seaboard. We're hoping to replicate that on the Pacific Northwest. And California, as we've mentioned in our, you know, earnings calls for the last couple of years, have been very, very strong from a comp perspective, and so we're leaning into that opportunity as well. As you mentioned, our top three stores for the longest time were Fort Lee, New Jersey, Austin, Texas, and Bellevue, Washington. But just recently, San Diego took over Fort Lee as number three. San Diego was our seventh- Seventh. Location that we opened, so it's really nice to see some of the legacy restaurants doing so well. Yeah, absolutely. We're at time now, but thank you so much for the opportunity to dig into the Kura. This is really exciting for me, and I know that everyone here in the audience is gonna be looking forward to digging in here as well. So please feel free to come in and introduce yourself, and thanks so much for being here for the presentation. Thank you, everybody. Thanks for having us.