Good afternoon ladies and gentlemen and thank you for standing by. Welcome to Kura Sushi USA Inc. Fiscal Third Quarter 2025 Earnings Conference Call. At this time all participants are 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 “Jimmy” Uba, President and CEO, Jeff Uttz, Chief Financial Officer, and Benjamin Porten, Senior Vice President of Investor Relations and System Development. I would 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 third quarter 2025 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 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. 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 would like to turn the call over to Jimmy. Thanks Ben and thank you to everyone for joining us today. The last quarter has been a busy one for us. Between rolling out the new reservation system, investigating new market opportunities, building out our IP pipeline, and strategizing on how to get the most out of our collaborations, we completed the system-wide rollout of the reservation system ahead of schedule, made meaningful progress on building a restaurant pipeline that leverages the opportunities demonstrated by Bakersfield, and have built our busiest marketing calendar yet for the upcoming fiscal year. I'm extremely pleased with the result on all three fronts and very proud of the efforts by our team members to maximize ourselves and set ourselves up for a great fiscal 2026. Total sales for the fiscal third quarter were $74 million, representing comparable sales growth of -2.1% with price and mix of 0.8% offset by negative traffic of 2.9%. We are pleased to see the business moving in the right direction with sequential improvement in comp performance each month of the quarter. Cost of goods sold as a percentage of sales was 28.3%, representing an improvement of 90 basis points over the prior year quarter's 29.2% due to pricing and ongoing efforts by the supply chain team. Labor as a percentage of sales increased by 50 basis points due to high single-digit wage inflation, partially offset by pricing and incremental operational efficiencies. Restaurant-level operating profit margin was 18.2% as compared to 20% in the prior year due to higher labor, occupancy, and other costs. During the third quarter, we opened three new restaurants: North Scottsdale, Arizona; Lynnwood, Washington; and McKinney, Texas. Subsequent to quarter end, we opened two more units, one in The Woodlands, Texas and one in Salt Lake City, Utah. We are very pleased with the class of 2025, with many of our restaurant openings exceeding our expectations. Lynnwood joined our top five restaurants shortly after opening, underscoring the tremendous opportunity we see in the Pacific Northwest. At the beginning of the fiscal year, we provided unit development guidance of 14 new restaurants, which we achieved with last week's Salt Lake City opening. I'll leave it to Jeff to share our thoughts on guidance for the remainder of the year, but I will mention that we have currently five units under construction. Over the last several calls we have been discussing the opportunity in smaller DMAs as demonstrated by the success of this year's opening in Bakersfield, California, and as a greater optionality created by these smaller markets can not only expand our white space potential, but also serve as a functional tailwind by reducing the number of openings in markets that can cannibalize sales. We had mentioned that we hope to get back to a 50:50 split between new and existing markets by fiscal 2027 and that we've been hard at work developing previously unexported DMAs like Des Moines, Beechmont, and Tulsa. I'm very pleased to say that we now have properties under negotiation at each of these markets. Turning to marketing, we have seven to eight IP collaborations lined up for fiscal 2026, which as we mentioned in the previous call is a record for us. Fiscal 2026 will have no interruptions between IP campaigns, and we reappear this fiscal year, which included a four to five month stretch without collaborations. We have a renewed appreciation for the role that collaborations play in our sales and have made investments to better utilize this opportunity that is unique to Kura. In addition to creating a new role in our marketing team which will be fully dedicated to researching and negotiating with new licensors, we have also established an Intellectual Property Committee to facilitate the development of longer term strategies as it relates to our IP collaborations. To close, I would like to provide an update on our system development efforts. While we had originally expected to complete the implementation of the reservation system by the end of the fiscal year, we were able to roll out reservations across all restaurants by June. The response from guests and team members has been uniformly positive. While it's too early for us to quantify the impact of the reservation system, we believe it has great potential as a comp driver and have identified system improvement opportunities which we believe could drive operational efficiencies as well. Although the implementation of these improvements will take some time, we are pleased with a strong start and look forward to being able to share more quantified expectations in future calls regarding potential traffic lift and level improvement through the reservation system. As a final note, I'm pleased to also announce the introduction of our new Light Rice option, which will give guests even more control over how they experience Kura by introducing the option to order sushi with smaller portions of rice. The third quarter has been a very busy one for us, and it's exciting to see so many of our initiatives come online or across the finish line. All of our team members, both at our restaurants and our Chief Support Center, have been doing incredible work to make this happen. Thank you, everyone. Jeff, I'll hand it over to you to discuss our financial results and liquidity. Thank you, Jimmy. For the third quarter, total sales were $74 million as compared to $63.1 million in the prior year period. Comparable restaurant sales performance compared to the prior year period was -2.1%, with traffic at -2.9% and price and mix positive 0.8%. Effective pricing for the quarter was 4.3%. On June 1st, we took a 1% menu price increase and after lapping prior year increases, our effective price for the fourth quarter will be 3.5%. Comparable sales in our West Coast market were flat and comparable sales in our Southwest market were -2.5%. As we've been discussing for the last several months, we were looking forward to our third quarter where our comparison eased and that optimism was met with encouraging sequential monthly results. As Jimmy mentioned earlier, turning now to costs, food and beverage costs as a percentage of sales were 28.3% compared to 29.2% in the prior year quarter, largely due to pricing and supply chain initiatives. We continue to be fortunate that tariffs have not caused a meaningful negative impact to our food and beverage costs, and we are continuing to work with our suppliers to minimize any future impacts. Labor and related costs as a percentage of sales were 33.1% as compared to 32.6% in the prior year quarter. This increase was largely due to wage inflation, partially offset by pricing and operational efficiencies. Occupancy and related expenses as a percentage of sales were 7.5% compared to the prior year quarter's 6.8% due to sales deleverage. Depreciation and amortization expenses as a percentage of sales were 4.7% as compared to the prior year quarter's 5%. Other costs as a percentage of sales were 14.7% as compared to the prior year quarter's 14.1% due to sales deleverage. General and administrative expenses as a percentage of sales were 11.8% as compared to 14% in the prior year quarter due to sales leverage, lower public company costs as we lap the first year of 404B SOX compliance, and lower litigation-related costs. In just a moment, I will be discussing our updated guidance for our full year G&A expense. Operating loss was $162,000 compared to operating loss of $1.2 million in the prior year quarter due to the lower G&A expenses discussed previously. Income tax expense was $55,000 compared to $60,000 in the prior year quarter. Net income was $565,000 or $0.05 per share compared to a net loss of $558,000 or -$0.05 per share in. The prior year quarter. Restaurant level operating profit as a percentage of sales was 18.2% compared to 20% in the prior year quarter, largely due to sales deleveraging, increased labor expense, and higher other costs. Adjusted EBITDA was $5.4 million as compared to $4.5 million in the prior year quarter. We're particularly pleased at being able to increase our adjusted EBITDA by 20% even with higher restaurant operating costs. Turning now to our cash and investments, at the end of the fiscal third quarter we had $93 million in cash, cash equivalents, and investments and no debt. Lastly, I am pleased to update our guidance. For the full fiscal year 2025, we expect total sales to be approximately $281 million. We expect to open 15 new units, maintaining an annual unit growth rate above 20%, with average net capital expenditures per unit of approximately $2.5 million. We now expect general and administrative expenses as a percentage of sales to be below 13%, exclusive of any legal settlements. I will 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. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press Star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we poll for questions. Our first question comes from the line of Jeremy Hamblin with Craig Hallum. Please proceed with your question. Thanks so much and congrats on the strong results. I wanted to see if we might be able to dive in a little bit to the commentary around the new reservation system initiative and the timing of that, along with the timing of bringing your latest IP collaboration back. I wanted to see if you might unpack the same store sales trends cadence during the quarter a little bit more for us to get a sense for how May performed as you brought that IP collab back versus the first two months of the quarter, and then a sense for you had a pretty big raise in your sales guidance for the year, how things have started out here in June. Yeah. Jeremy, this is Ben. Great to. Thanks for the questions. Great to hear from you. We're really happy with the reservation system. As Jimmy mentioned, we did see sequential improvement throughout the quarter with each month being better than the last through March, April, and May. We began rollout of the reservation system in late February, but I'd say it really began in earnest in April, and we were largely done by May. You can sort of see that benefit rolling along as well. We began the Peanuts campaign in very late April and had it running through May and June. The two of those combined has been really, you know, one of the big reasons that we were so happy with how the last quarter shook out. One other thing to keep in mind is that the reservation system, just given that the rollout has overlapped with these time-limited things like the Peanuts campaign and now, the HoloLive campaign, we haven't had dedicated advertisements just for the reservation system, and the messaging that we have done is largely focused just towards our rewards members. We're very pleased to see the results that we're seeing right now and believe that there's additional upside as we communicate this further to our guests. Jamie, I have a comment about questions for comp sales, but please allow me to speak in Japanese. Ben is going to translate prepared. Going back to the monthly cadence that we'd seen in Q3 may coincided with the introduction of our first IP campaigns really in four or five months. That was also when our comps turned positive. It was really great to see not just positive comps, positive traffic as well in May. We have those IP collaborations continuing through the current quarter and we're very pleased with how the current quarter is performing as well. Jeremy, on your last question about the guidance raise to $281 million last quarter, we were pretty certain that we. Would be close to there as well. We have been really gun shy about raising our guidance too early just based on, you know, what happened last year about this time. This was not a great call for us in July last year, so we wanted to be certain that we felt really good about that before we told everybody. That we thought we were going to. Be higher than our previous range of $275 to $279. Totally understandable, especially when you guys were reporting in early April. Just one follow-up question I wanted to ask on labor. You had about 50 basis points of deleverage in the quarter. Obviously, a negative comp doesn't help on that, but wanted to get a sense for what your wage rates are on a year-over-year basis currently. In terms of looking at Q4, where you would need to comp to see a positive leverage on that labor line item. For Q4, our expectation is that we'll see mid to low single digit labor inflation, which would be an improvement from what we've seen in Q2 and Q3. It goes without saying that a positive comp makes it easier to lever labor year over year. Without giving really any commentary on quarter to date comps, we're very pleased with how the quarter is progressing. One thing that we've been seeing unfold over the last couple months is all the initiatives that we've been working on over the last year and really going as far back into last year with the operational streamlining and this year supplemented by the new Mr. Fresh, the new touch panels, and the reservation system. You see the benefit of those labor initiatives trend along with sales leverage. We're seeing really everything blossom now, and that's been a real pleasure to watch. Thanks so much for all the color and taking the questions, and best wishes the remainder of the year. Thanks, Jeff. Thank you, Jamie. Thank you. Our next question comes from the line of Jeff Bernstein with Barclays. Please proceed with your question. Great. Thank you very much. Couple of questions. The first one, just looking to clarify your comments on the tariff implications. Seems like you guys report shortly after tariff discussions. I know last quarter there was tariff rollout kind of right before you guys reported. I know there's been some Japan headlines around tariffs just in the. Past day or two. I know it's difficult for you, but it sounds like you're fairly confident that there's no material impact. I'm just wondering if you could share any incremental color, especially now that we do have some specifics in terms of at least what's tariffs related to Japan. Any color you could provide in terms of the impact on the cost structure or any pricing you might take would be very helpful. I had a follow up. Sure, Jeff. This is Jeff. We knew this question was coming. So. To be honest, I pre-recorded last week, late last week. The tariff commentary in there was related to last week. Obviously, this new news came out yesterday. So. What I can tell you is. We don't just because it's been. 24 hours, I don't have a monetary impact yet based on the projected tariff. I can tell you that about 45% of our basket comes from Japan, Korea, and Vietnam. We'll be able to calculate an impact later. As I mentioned in previous calls, our Japanese suppliers have been very eager to. Sit with us and say, look, we'll. Share some of this impact. We don't know if that's 50/50, 60/40. We don't know those numbers yet. As soon as we get clarity on, we will share them. Those numbers and we'll be able to calculate more of a monetary impact of what it might do to our COGS. We'll be able to share that at a future conference or in a future call. We also are hopeful that 25% is. Not the final number. You know, as you know, these things have bounced around. Trump uses these things as leverage a lot of times, as we know. Where it ends up by August 1, we will see. We're in a good place in our COGS number right now in the low 28%. If we do have an impact, we feel pretty good about the fact that that impact shouldn't throw us north of 30% even if it were really high. It's in a. We're in a much better place than. Have our cost of goods sold was. Say at 30.5 or 31. We're optimistic about what's going to. Happen over the next three to four. Weeks in terms of the negotiations, and we'll be able to have further cover the next time we get in front of investors. Understood, thank you. Just on the restaurant margin, I know in past quarters you've talked about your, I guess, longer term confidence sustaining the 20% plus and I think you have been confident in achieving that in fiscal 2025. It looks like we're running more in the 17- 18% range year to date. I'm assuming it's going to be difficult to get to 20% in fiscal 2025. I know you guys don't chase a margin, but I'm just wondering your perspective on the outlook for the margin in the fourth quarter and whether or not fiscal 2026 in a more normalized environment you'd be confident to suggest we could be back north of 20% again. Thank you. Forgot. Speaking to the current year, we're already more than nine months into fiscal 2025 and with the year to date number, bridging that to a 20% plus number is difficult, but we don't think there's anything that has structurally changed about our margins and absolutely 20% plus are our target for fiscal 2026. Looking at fiscal 2026, we're feeling very good about our position as it relates to comps. We're lapping fiscal 2025, which had a four to five month stretch without IP campaigns. Next year we have the most IP campaigns we've ever had. We also have the reservation system for the full year. You know, just coming into the year we're in a very strong position and we see no reason that we wouldn't be able to achieve positive comps and have that flow through to a 20% plus restaurant level operating profit margin, and with positive comps that would naturally allow us better leverage on labor, occupancy, other costs, depreciation, and that would drive our margin expansion or really a return to margin goal. We'll see. If I could just slip one more in. Jeff, I know you like to talk. About the G&A leverage, which. Lowering your target for this fiscal year, obviously very impressive. I'm just wondering, that further reduction, any color you can share in terms of the biggest buckets of these incremental savings and whether or not you think, I know you talk long term about being sub 10%, but should we continue assuming a path trajectory the way we've been seeing recently in terms of how we should think about fiscal 2026 versus that sub 13% in fiscal 2025? Thank you. Yeah, the biggest basket is really the headcount, and I think the team and leadership in the support center and in field operations has done a really good job of figuring out how to better allocate work to everybody rather than just adding people when things get backed up. It's really been a group effort, and salaries is the biggest piece of that G&A. With everybody's focus, that's how we were able to get there. That leverage that we got this year was much higher than I expected. Clearly, with the guidance raised from where we were at the beginning of the year in the mid 13. Going forward, I do expect additional leverage. In the past, I think I had said 50- 60 basis points a year next year. Honestly, Jeff, I don't know if it'll be quite that high just because of. How much we got this year? I do expect leverage next year, maybe not to that 50 to 60 basis point. I do believe that in future years we might be able to get back there after we get through fiscal 2026. Understood. Thank you. Thank you. Thank you, Dave. Thank you. Our next question comes from the line of Andrew Charles with TD Cowen. Please proceed with your question. Thank you. This is Zach Ogden on for Andrew. Just based on our math, it looks like the new store productivity has improved so far in 2025 relative to 2024. Are you seeing the class of 2025 opening stronger than the class of 2024? If so, what's that? Yeah, fiscal 2025 is certainly stronger than fiscal 2024. It's one of the strongest classes we've had in recent memory. We're really, really pleased. A big part of that would be our opening up of the Pacific Northwest. As Jimmy mentioned in his prepared remarks, Lynnwood pretty much immediately entered our top five. That's been a great tailwind for us and besides building out one of the most promising markets that we've had, we've also been exploring new DMAs. Fishers in Indiana would be an example. Bakersfield is another example that we've returned to over the past couple earnings calls, but all of them are doing very well. What's critical about Fishers and Bakersfield is that they provide data points for us in terms of our pipeline building in the future. It gives us that much more optionality in terms of how we build our pipeline. That's really going to be the biggest part of us getting back to a 50/50 split for fiscal 2027. We're very pleased across the board with the performance, not just in infilling existing markets where we knew that we'd do well, but having positive surprises in new markets as well. Got it. Thank you. Last call, you had called out a $300,000- $400,000 impact to new store build costs from tariffs. Has that expectation changed at all since the last call based on the different tariff rates? No, that $300,000- $400,000 is still our expectation at worst case scenario given. The current tariff situation. Okay, got it. Thank you. Thanks, Andy. Thanks, Zach. Thank you. Our next question comes from the line of Todd Brooks with Benchmark Company. Please proceed with your question. Thank you, and congratulations on the results this quarter. Great to see. Two quick questions, one following up on reservation. I know we're a little ways away from getting quantifiable data, but just from what you're seeing in the early experience with the platforms in place, are you seeing those larger boosts around lunch and maybe late night, kind of those where you knew you had capacity if you could unlock it with the surety of being able to get a seat? Another follow up on the reservation side. I know that we've really, I think, just started promoting it to loyalty program members recently. Thoughts on the ability to take it to non-loyalty and message it more broadly and draw some new people to the brand to try the restaurant? Do we need to leg into that just to handle the capacity that we get in a pickup from loyalty program members alone? No, absolutely. To answer your second question first, that is absolutely the next thing that's on the docket for us right now. Our guests have been organically discovering it. I'm sorry, our rewards members have been organically discovering it. The reservation button is exactly where the old waitlist button was, and so there's really no change to the guest flow and people discover it pretty naturally. Otherwise, it's been secondary messaging in our marketing emails. We do believe that this is a massive, massive catalyst for rewards member registrations, and certainly we want to capture that. In terms of what we've seen in the early days, just given that our last restaurant rolled out in mid June, I don't want to see any numbers that you're going to be basing your modeling off of. One really important point that we've been able to corroborate for statistical analysis is that more than half of our desks with reservations are being seated within two minutes of arrival, which, I mean, that's night and day from what guests are used to. I think you get a pretty clear idea of the massive opportunity there is here. That's fantastic. A final question. I'll jump back in queue. You've talked about the IP partnership and the strength that you're seeing and the coverage that you're seeing. I think there was a comment that you'll be covered for all the weeks of fiscal 2026 versus being dark on IP partnerships for four to five months here in fiscal 2025. I know we're not going to get details on what's making up the pipeline, but can you talk qualitatively about the quality of the pipeline and maybe the magnitude of the partners? It sounds like there's that much more internal effort against it as well with the new committee and just really a focus on extracting more return out of these efforts. Thanks. Yeah, I mean, speaking in terms of if you just look at our pipeline from past years, it's pretty clear that the properties just get bigger and better every year. I think one thing that's really key to our new strategy is that while we have been able to get consistently bigger partners, they haven't necessarily translated to bigger sales. Just by having more partnerships per year, that gives us more at bats, that many more opportunities to discover really what's going to be successful. Let's get and build our portfolio based off of that. The upcoming several campaigns that we have are Demon Slayer and One Piece, which are two of the best, you know, two of the best properties we've partnered with. Following that, we have Kirby, which is the biggest Nintendo property that we've ever partnered with. We're very pleased. The renewed focus on the IP collaborations I think is going to be a very key part of our discussions as it relates to fiscal 2026. We're being a little bit more experimental. For instance, with the current HoloLive campaign, we don't have associated bigger upon giveaways, but it's still been a massive traffic driver because of the intensity of the fandom. We've got these cups for sale and we have food collaborations, but that's still been a very meaningful traffic driver. Having these campaigns that are relatively sort of investment light lets us be that much more experimental, lets us have that many more campaigns per year, which will get us closer to that ideal portfolio that much faster. That's great. Thanks, Ben. Congrats, everyone. Thank you. Thank you. Thank you. Thank you. Our next question comes from the line of Mark Smith with Lake Street Capital. Please proceed with your question. Hi guys. Just as we look at restaurant level expenses here, just wanted to dig in on other costs. You know, is this purely utilities or? Other things that are. That drove that a little bit higher here during the quarter. In terms of. What's, you know, really the major components of our other costs growing as compared to, say, a couple years ago, it's really just minor growth across the board. You know, slight increases in R&M cost, slight increases in utilities. Really, the way that we think about it is the other cost numbers for Q2 were abnormally low. You can sort of think of the $1.47 we had for Q3 as a bounce back. Year to date, our other cost as a percentage of sales is 14.3%, which is exactly where it was for the full year fiscal 2024. We think that 14% ish is where we're going to be running for the foreseeable future. Perfect. As we think about G&A, I know that, Jeff, you just talked a little bit about people and salaries and things that are in there. It's great seeing that guidance come down. Have there been cuts or are you continuing to add people? I just love more insight into how you're managing G&A and if it's purposeful, keeping the belt tight, or if it's just the sales growth that's keeping that down and leading to the guidance that we saw here today. It's purposeful, keeping it down. It's not due to cuts. We have not cut people and we do not plan to cut people. This is more of slowing down the hiring. I think it's a change in mindset. We several years ago, maybe were a little quick to hire people when things. Got a little rough rather than. Thinking about alternative ways to do things, how we allocate work, how we can. See who has some bandwidth to take. On some more things, and everybody's done just a good job at doing that. When there is a new hire request, it gets a lot more scrutiny now than when I first started with the company. People are just thinking about different ways of doing things. The approval process for new hires goes through a lot more people than it did previously. I challenge it quite a bit as a financial officer. To give a good example, when I joined the company, we were able to cut the number of requested new hires in the budget in half or more than half. It was like from 21 requested new hires, I think we went down to six or seven. That was three years ago. It's worked out. With that change in mindset, I. Think that it's the way that we. Will be doing things in the foreseeable future, which is why I'm very optimistic about that. North of 300 basis points of leverage over three years is something that we are very proud of as a management team. Excellent. If I can squeeze in one more, as we think about the success as you've moved into maybe some smaller markets, does that change your outlook on kind of your total pipeline and how many units you think you can build across the U.S. over time? Of course, we're happy for you to fill in whatever that number you think will be. Okay, perfect. Thank you, guys. Thank you, Mark. Thank you. Our next question comes from the line of John Tower with Citi. Please proceed with your question. Great. Thanks for taking the questions. Maybe, Jeff, following up to the comment you made earlier on tariffs and the idea of COGS maybe moving north of 30% or maybe not hitting north of 30%. I guess the implication there is that you guys would absorb all the impact of any sort of tariffs rolling through, even if you're negotiating with your suppliers there, or better said, you're not going to necessarily take pricing to offset the impact of tariffs on COGS. Is that the best way to interpret that? We would take on the portion that we agreed to with the vendors, wherever that ended up, whether it was 50/50 or whatever. Yes, pricing is a last resort. I will tell you that our effective pricing in November goes down to 1%. When that happens, we do have some pricing power if we need to do that, but we want to leave that as a last option, certainly. We could do that. We're just hopeful that the 25% number. That's currently out there will end up being much lower. That is what the hope is going to be. It has been 24 hours. I think as Jeff Bernstein said earlier, unfortunately, we get to deal with it. These things within a day or two. They happen on the last two calls. We will have more color on this as we get further in. That is our current thought process. Just to add on that, as it relates to COGS, I think we have a massive opportunity in fiscal 2026 through the Light Rice option that Jimmy had mentioned. I had the opportunity to try it for the first time last week, and typically I'll top out at five or six plates. I ate at least 10 plates without thinking about it. I'm sure that there are going to be tons of other guests that are just as enthusiastic about this. If we can really. Get. What we can get, what we expect from the Light Rice option, that's a big lever for us for fiscal 2026. As Jeff mentioned, we want to pull every other lever before we pull pricing. Got it. Can you speak to what that Light Rice option is? I just haven't heard of it before. Yeah, so it's for most of our nigiri options. When you order on the touch panel, you'll have an option like regular rice or Light Rice. The Light Rice option is just a smaller portion of rice. Okay. Lower COGS, same price point. Lower COGS. It's also, I mean, lower COGS, but also it's not as filling. I ate twice as much as I usually do when I was choosing the Light Rice options. Okay. Just on, I know, fiscal. 27, you're pointing to getting back to a 50%/50% split on new versus emerging markets, or, excuse me, new versus existing markets. Can you speak to that number for new stores in 2026? I'm sorry if I misspoke. I meant 2027. You're talking about new stores, 50%/50%, what that looks like in 2026. Are you still anticipating, I think roughly a 4% or so cannibalization number, you know, dragging on the business? Next, in terms of our expectations for fiscal 2026, we're looking at a pipeline where it's going to be about 70% existing markets, 30% new. In terms of the impact of the existing, the new units in existing markets, we think it's going to be largely in line with the 400 basis point headwind that we saw in fiscal 2025 and 2024. As it relates to fiscal 2027, we expect to continue to maintain that 20% unit growth. We do think we'll be able to get back to that 50%/50%, which would naturally just cut that comp headwind in half. Okay. Just last piece for me in terms of it's great to hear the IP collaboration stepping up next year. It sounds like you're going to be on pretty much all year or throughout the year in fiscal 2026. In the past, I think you've kind of had some hit or misses when it comes to some of the IP tie-ins. Can you speak to your confidence or how you're approaching it differently this time to ensure that the hit rates are higher than, you know, perhaps past initiatives or past IP tie-ins that you've had? I think the biggest frustration in the past was really sort of opportunity cost, where if you had a miss, it wasn't just that you had a miss, you had a miss that was eating up two months of your calendar that could be better spent with a better collaboration. Just by having, you know, seven to eight, which is meaningfully more than we've had this year, it's the most that we've had of any year. We get that many more tries, so to speak, to find what the successful ones are. Based off of those successes, we know what to repeat in future years. Got it. It's effectively just frankly sprinkling in more throughout the year so you have a better idea of what works and what you can repeat. Okay, cool. Awesome. Thanks for taking the questions. Thank you, John. Of course. Thank you. Our next question comes from the line of Jim Sanderson with North Coast Research. Please proceed with your question. Thanks for the question and congratulations on a great quarter. I wanted to talk a little bit. More about the mix component of same store sales, how you expect that to progress going forward if that's related to how you're rolling out collaborations and how we should look at that as you roll off pricing in November. Sure. Negative imagine. Opportunity. Opportunity option. We're very excited to see where we can bring mix in fiscal 2026. Over the last couple years, our mix has gone from negative high single digits to hovering between negative low single digits to mid single digits. Part of that from this fiscal year will be the headwind from the lack of IP collaborations we have. Typically with every IP collaboration, we'll have a giveaway that's associated with a certain spending threshold, typically $70 or so. The giveaway campaign that we had for HoloLive was actually at a higher dollar threshold because we saw there's that much guest interest for it, and that naturally drives average ticket. The Light Rice option, we think, is a big opportunity in terms of average check growth. My personal expectation is that this will grow the number of plates per person, and I think that's really an opportunity that we're going to be leaning into. The other is the 25th plate initiative. We're really pleased with the early results. What we have seen is pretty much exactly what we expected: minor pressure on transactions above 30 plates, but more than enough growth in the 25 plate plus category to offset that. We're really happy to see that. All right, thank you for that. Just wanted to talk a little bit. More about the reservation system as it's related to membership levels. Have you seen any notable increase in membership in the fourth quarter? Could you update us on where that membership rate is? Membership rates are. The growth rate is pretty much the same as past quarters. A big part of that is we haven't communicated the reservation system to non rewards members yet. I expect in November I'll be able to give you the answer you're looking for. Very good. Last question for me. Could you just update us on the various technology initiatives you've got in process? I think you've got the reservation system you're just finishing. I think you've got some point of sale issues to resolve. Then there's the dishwashing robot. Is there anything else out there that could have an impact, good or bad, on operations going forward? Yeah, one of the biggest things that we're excited for fiscal 2026 would be the dishwashing robot. Our strong hope was to get it live in fiscal 2025, but I'm not sure if we'll be able to do that. It really does seem like we'll be able to get certification within a matter of months. The units that we're building in fiscal 2026 are built from the blueprint stage, assuming the eventual installation of these robots. That's going to be a very meaningful opportunity. Should reduce headcount fully two to one. While the reservation system is at each of our restaurants, we still see lots of opportunity for improvements, especially as it relates to employee efficiency. We've got a list of about 70 different things that we're working on as it relates to the reservation system. We think that's going to have pretty meaningful upside opportunities as it relates to front of house efficiencies. All right, thank you very much. Thank you. Our next question comes from the line of George Kelly with Roth Capital Partners. Please proceed with your question. Hey, everybody, thanks for taking my questions first. Most of them have been asked and answered. Just a quick follow-up on the prior question. Can you be any more specific about the efficiency opportunity that you see available in 2026 from reservations? Yeah. Just as a couple examples, the seating process is meaningfully simplified. Before, when the seater or the host was seating a guest, they had to enter information on three different terminals, and we've cut that labor by two thirds. There's only one terminal that they're touching, and the process itself is simplified. One unexpected efficiency opportunity that we've seen is in busing. This hadn't occurred to me until I'd actually seen this happen in the restaurants once we've implemented it. There's an element of psychological pressure when you have reservation times, which is promised somebody before we did it on a waitlist. You knew parties 26, 27, 28 were waiting, and that's a different feeling from being at 7:00, being at 7:30, knowing that there are three parties that you promised to seat them at 7:00 waiting for you. The buses are actually moving more quickly, and that's opportunity, especially in the peak hours. I'm excited to see just how much we can get out of that. Okay, that's helpful, thanks. Second question for me, back to the Light Rice option. Ben, you sound confident about either what you're seeing or what sort of how. You expect the reception you expect to get from that. Can you just give us a. Little more background on why you. Have that level of confidence about the sort of plate opportunity and maybe it's been tested at certain locations. When do you expect it to fully roll out? I guess, added context about. That would be great. Okay. The biggest thing that gives us confidence is that this isn't. This is something that Japan has already been doing for years. When they implemented this, they did see mix improvement, they did see ticket growth. We were able to implement this now because of the update to the new touch panel system, which gives us much more flexibility. Just looking at the results from Japan gives us a lot of confidence. When I was speaking earlier, it was really just from my personal experience. I really loved it. I would strongly encourage you to try it and I think you'll feel as confident, you'll understand my confidence once you try it, that there really is a very big opportunity there. We've already got this at about 50 of our restaurants. I'm really happy that we have this. It's really something that our guests have been asking for for a long time, whether it's explicitly in the guest service or just in the piles of untouched rice that we see in our restaurants. This is something that our guests have been asking for. I think we've been doing a really good job in fiscal 2025 of just checking one issue after another in terms of points of friction for our guests. Just to give you some additional context, in classic Kura speed style, we implemented this in our first restaurant about 10 days ago. We now have it in 50 restaurants. That speaks to our enthusiasm. As you can imagine, we don't have a lot of data that we can share with you yet. Okay, that's helpful. Thank you. Thank you very much. Thank you. Our final question comes from the line of Matt Curtis with William Blair. Please proceed with your question. Hi, good afternoon. I apologize if I missed this in your commentary, but could you just give us the average tick breakdown in the quarter between price and mix? Price mix cumulatively was positive 0.8%. Effective price was 4.3%. Mix was negative 3.5%. As we mentioned earlier, mix has been hovering around the negative high single digits for a very long time. We're really pleased to see it stabilize in this low to mid single digit range. With the initiatives that we have like the Light Rice option, the 25th plates, IP collaborations and giveaways, we're really excited to further drive that down. We think there's even a possibility that we'll be able to see a positive number at some point. Okay, great, thank you. I know the addition of Light Rice is really recent, but just to be clear, could you tell us what the per plate consumption trends were like throughout the quarter? This was implemented after Q3 and it wouldn't have had any impact on the plates per person consumption in the prior quarter. Yeah, but I meant what were the actual per plate consumption trends during the quarter relative to, say, the second quarter? For the last several years it's. Been approximately six per person. Okay, great. Thanks very much. Thank you, Matt. Thank you. With that, this does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time. Have a wonderful day.