KURA SUSHI USA, INC. Q2 FY2026 earnings call

• Fiscal second quarter was strong with better than expected comparable sales and record-breaking labor leverage. • Opened new restaurants, with current units under construction and expectation of 16 new openings in fiscal 2026. • IP collaborations working well, with current collaboration with Jujutsu Kaisen and upcoming ones with Tamagotchi and Honkai Star Rail. • Progress on reverse program with status clearing. • Reservation system driving higher visitation rate and addressing wait time complaints. • Expect to retrofit majority of 50 restaurants with robots by end of fiscal year, with robots expected to deliver incremental 50 basis point benefit in fiscal 2027.

Total sales for the fiscal second quarter were $80 million, with comparable sales growth of 8.6%. Cost of goods as a percentage of sales was 30.4% compared to 28.7% prior year. Labor as a percentage of sales improved to 30.7% from 34.8% last year. Opened 1 new restaurant in Q2, with 4 more opened post-quarter end, and 8 units under construction. Expect to open 16 new units in fiscal 2026. Restaurant-level operating profit as a percentage of sales was 18.2% compared to 17.3% prior year. Adjusted EBITDA was $5.5 million compared to $2.7 million prior year.

• Expect total sales to be between $333 and $335 million in fiscal 2026. • Expect to open 16 new units, maintaining annual unit growth rate above 20%. • Expect G&A expenses as a percentage of sales to be approximately 12% excluding litigation expense. • Expect full-year restaurant-level operating profit margins to be between 18 and 18.5%.

• Forward-looking statements subject to numerous risks and uncertainties that could cause actual results to differ materially from expectations. • Tariff situation remains largely unchanged with minor relief offset by commodity inflation. • Litigation expenses in California, an unfortunate byproduct of doing business there. • Geopolitical uncertainty and potential impact on fuel surcharges, freight costs, and consumer behavior.

Q: Andrew Charles asked about revenue guidance and new store productivity.

A: Guidance incorporates Q2's better performance but is prudent given geopolitical uncertainty. New store productivity tied to successful IPs and guests eating more plates per person.

Q: Todd Brooks asked about margin leverage and IP partnerships.

A: Labor leverage significant, with robots expected to add 50 basis points in fiscal 2027. IP partnerships include Jujutsu Kaisen, Tamagotchi, and Honkai Star Rail.

Q: Jeremy Hamblin asked about tariff timing and technology investments.

A: Forward contracts for proteins have overlapping expiration dates, no meaningful shift expected. Technology investments in reservation system, robotic dishwashers, and AI for food quality and guest-facing technologies.

Q: Jeff Bernstein asked about new CFO capabilities and unit growth sustainability.

A: Looking for CFO with relevant capabilities, confident in 20% unit growth for fiscal 2027 with monitoring of unit economics.

Q: Sharon Zacchia asked about comps and G&A discipline.

A: Guidance conservative due to past experiences, G&A leverage expected to continue under new CFO.

Q: Mark Smith asked about March consumer behavior and opening cadence.

A: Gas prices in California impactful but performance pleased, Q3 openings with back half weighting.

Q: Jim Sanderson asked about seafood inflation and back half performance.

A: Monitoring fuel surcharges, weather impacted sales, no quarterly guidance provided.

Q: George Kelly asked about tech enhancements and litigation/labor.

A: Tech enhancements in broth management and seared station automation. Litigation expectations uncertain, labor improvement expected in Q3 and Q4.

Q: Matt Curtis asked about reservation system sales lift and IP collaboration gap.

A: Reservation system contributed about 1% to sales, IP collaboration gap one-off.

Q: John Tower asked about sushi lunch combo and pricing.

A: Consumers responded to lunch combo, not big needle mover. Competitive set may pass more pricing, but IPs and LTOs used to promote food.

Q: John Tower asked about consumer response to pricing and competitive set risks.

A: Anecdotally seeing competitive set price increases, using targeted marketing and LTOs to attract guests