Kura Sushi USA, Inc.

Q1 2022 Earnings Conference Call


spk_0: that afternoon ladies and gentlemen and thank you for standing by welcome to the courage to she usa inc fiscal first quarter twenty twenty two earnings conference call at this time all participants have been placed analysts and only mode and the lines will be open for your questions following the presentation please note that this call is being recorded i'm a call today we have a jimmy jimmy oba president and chief executive officer be been ruby chief financial officer and benjamin porton vp of investor relations and business development and now i watched from a call overture misreporting
spk_1: they you operator
spk_2: i mean everyone to take your for joining by know everyone should have access to his go first quarter two thousand twenty two earnings release me found it w w w dot curses she dot com and invest release section the copy you yearning to is also been included in the a was admitted to the as he before we begin our limited works i need to remind everyone that part of our discussion three one good for looking statements as defined under the private securities litigation form active ninety nine five good for the to statement to doctor peter a future performance and therefore he snap it underlines i'm in a statement or off the subject of numerous risks and uncertainties the good cause actual results to differ materially from what weeks back we're for old you are as she she filed for a more detailed discussion of a risk that could impact or the tropical results
spk_3: financial condition
spk_2: also during today's call will got certain on get measures which he believed me is what about their performance the presentation of his additional information should not be considered in isolation north and substitute for results prepared in accordance with gap and reconciliations the comparable got measures are available earnings release with that of away and to turn the polar region
spk_4: thank you been on the thank you everyone for joining us today i'm very pleased to announce a songs that we've had a to he's got a twenty twenty two and that the on track to achieve the goals that will be said in a lot on your guidance i felt momentum we just up in the previous earnings call of continue the into the new his career developing into uncomfortable with a lot of nineteen point nine percent of compared to the trip and increased i thought the quarter twenty two and as a reminder of he's got a twenty twenty fourth quarter before the p that september three november of into twenty nineteen
spk_2: we believe he comes demonstrate some of the resilience of i'll be enough money in the face of the new the club it confirms is that it a variant and and i couldn't be more proud of how far the company has come in out of thing to do the changes created by corbett
spk_4: we continue to make excellent progress in returning to to put it on the performance with to wonderful and a little operating profit margin of nineteen point five percent as compared to seventeen point three percent into want peace got it went to and you want is typically our weakest the porta flow mathieson a perspective and to be so close to have historical people on your listen i'm david operating profit margin of a twenty percent is a good thing for our coming reason to set of twins observed in the previous quarter demanding play a fixer continued to be awful get the market with region of accounts of twenty seven point eight percent as competitive play forget it and how are these an account of twelve point four percent picking up the monkey king of him we benefited from former additional went between october as compared to the same video of in fiscal two and twenty which was offered to buy one this weekend in november of compared to the same appeal in fiscal twenty two and he the differences in pain opponent he's got a dip in a minor complicity it on november i'd compare the to the proceedings two months after the thing for this kind of sick however we demonstrated consistent constrained by that we've got a twenty two in the last quarter of primitive the revenue what one point three million dollars on the of mix of the four point five percent against the to for affirmative revenue of one point one million dollars on the mix of five percent now other to provide one up date on the plating event we met on the our refining school the increase the pledge think i think they did it at the beginning of september and so many markets that this book is type of this being a for fingerprinting boot it ever taken i'm pleased to report that if response continue to to the test of favorable and i'll grab the just as it is had this have had another most recent quarter of lit up for our business going forward looking at all a conflict down is particularly instructed his instalment of understanding of the obama pricing most of the of feet into want to yeah fuck the comfort of nineteen point nine percent or triple bypass taken over this two year period i've gets are able to confident that skip face he to off motivates million bpd consumption eight of other effective miss own price elasticity
spk_2: it is encouraging that over the sanctity of how did it in know mobile page consumed per guest decreased
spk_4: the increase in august consumption in spite of pricing is us to believe we have yet the to up with a hold of president kibaki for our gift i'm up i'll get understand and appreciate the plane and buddy you that cooler of us the input is the play the consumption what paucity of that the by a dining room for the criticism of approximately eleven percent of two years ago which we believe a post on obama of putting me to save some of the to of it the up study believe this is a was in love but the think the dystrophy to this solution is being driven by longer take the tongue times more time consuming but important quality to safety measures a drop of the to any change in demand have demonstrated by how long i'll i'll wait times even the company that you uncomfortable the nineteen point nine percent of different operating profit margin of nineteen point five percent what a kid in spite of a double digits a tiny bit on the topic headwind underscoring the potential for improvement on twitter a you please and the the profitability of the exit the pandemic and a profit normalizes i the to development
spk_2: we opened our first the new the some of his career in october of don't get idiot in san francisco
spk_4: subsequent to the quota we entered a new market of i thought of it you one unit in phoenix and the one unit and chandra muscle which opened ended december but it is still early a day we are encouraged to by the performance of a decision you have class of listen a full year development plans you mean on track to more units under construction and free executed it easy for remainder of the pipeline not a good at the touch on three topics that are the kind the focus of that it's not industry writing a think and the impact of coffee to and it was a variety of our community basket he continued to be it activity insulated from be sensible hm prison what have you might have we have seen the impact of off that apply other the second other commodities that's a free the cost when a couple the day off on anything that primary dramedy putting a protected at home because the productivity but others are experience if many flooded you in conjunction with the pricing we have taken september i thought i'd the main thing ongoing contrast obama cook spent of people will discuss later i'll bet on it's indicative of meant under the detention continue the to pay dividends instead of thing in free stuff the different things which the able to have a film with you on says looking through the current quarter the only current body amp of cause the some of it is not a company kiss on you to little kids on how to fix the was quarantining out over abundance of caution in nato december we saw some obama different it is the a fitting travesties lot of or awash you to reduce or that forces which unfortunately coincided with a more lucrative for the season but we read this is a template that the bucks
spk_2: he gave up this as a result of could if a company to video on gone and operated on say some of the safety of our employees under gift
spk_4: as opposed to teach got it is higher than anything some and the it's that modernization following the in some ways during the month he also loves meat the december twenty nine punishing event it was a sentence for got a point of can't handle wouldn't fuck you too consequently we saw december congo's opens up over forty percent we can be added to december of kind of to and nineteen now i'll got to provide on operate on our different subjects they will have a payment a free old out it gets some exceeding expectations the pilot the for touch been doing ordering continue to expand have a system a full load out expected in this or the next quarter personally i'm very excited to announce on what initiative the what thoughtless as of today i will well a different artists would cover which i just i'm aware of stuff is putting could anybody even beyond the diva never efficiencies be up to preserve to watch our get to the like in the future coming to to live a normal different pending of a little got the pilot we expect rolled out by the end of that is career i would you are program continue to grow in seventy three thousand new members turning into one who are total of three hundred three hundred thirty out a member a preventing the growth of over thirty percent you got program enrollment and engagement remains a top priority at our members of the beginning company highest it operated under tiny frequency than non members
spk_2: what are the only the cool added to the end of the pandemic i am extremely proud of our recent comments on submitting a walk but of have to have a team had done to the magic the that
spk_4: i would like to extend the my extend my thanks to everyone in all different teams on the corporate up on center for making this possible it's at any time the call about escape the briefly this api our final touch on the liquidity stick
spk_5: thank you jimmy for the fiscal first quarter total sales for twenty nine point eight million dollars as compared to nine point four million dollars in the prior year period
spk_2: we believe measurement of car sales growth is most relevant versus the free talbot period a fiscal first quarter twenty twenty on that basis up sales grew by nineteen point nine percent with regional concept twelve point four percent for california and twenty seven point eight percent for texas having to cost food and beverage costs as a percentage of sales for thirty percent compared to thirty two point four percent in the prior year quarter it uprising taken at the start of the quarter and largely normalized performance as sales volume improved labour and related costs as a percentage of sales decreased the thirty two point five percent from forty six point three percent in the prior year quarter due to higher sales leverage
spk_5: occupancy and related expenses as a percentage of sales improved seven point four percent i'm eighteen percent in the prior year quarter also primarily due to higher sales leverage other costs as a percentage of sales decreased the twelve point one percent compared to twenty two point one percent in the prior year quarter due to higher sales leverage as well general and administrative expenses
spk_2: i point four million dollars compared to three point five million dollars in the prior quarter this increase was primarily due to compensation related expenses as we made investments in are keen to support our accelerated growth plans
spk_5: as a percentage of sales general and administrative expenses were eighteen percent compared to thirty seven point four percent in the prior year quarter operating loss was one point three million dollars compared to an operating loss of six point three million dollars in the first quarter of fiscal twenty twenty one income tax expense was twelve thousand dollars compared to one income tax expense of twenty nine thousand dollars in the prior year quarter note that we expect to continue to incur nominal income tax expense quarterly irrespective of our pretax income or loss as a result of the for valuation allow alex against our deferred income tax assets and encourage of minor income taxes pay about state lovers net loss was one point three million dollars or thirteen cents per diluted share compared to net loss of six point four million dollars or seventy six cents per diluted share in the first quarter of twenty twenty one restaurant level operating profit as a percentage of sales was nineteen point five percent compared to a restaurant level operating loss as a percentage of sales of nine point nine percent in a prior year quarter adjusted you die with eight hundred thousand dollars compared to a negative four point one million dollars in the first quarter of fiscal twenty twenty one thirty two are cashing liquidity at the end of the fiscal first quarter we had forty four point four million dollars in cash and cash equivalents and know that finally i would like to reaffirm our previously shared for your guidance for fiscal year twenty twenty two we expect total sales between one hundred thirty million and one hundred forty million dollars we expect general and administrative expenses as a percentage of sales of approximately seventeen percent and we expect the opening of eight to ten new units with net capital expenditures per unit the two point one mil
spk_6: yeah and dollars
spk_5: it bears mentioning that these expectations assume that we experienced no further operating restrictions or material downturns resulting from the ongoing covered nineteen pandemic our expectations are based on the results that we have seen in recent quarter mile we believe the expectations are appropriate given our current operating a buyer i'm in the company and the restaurant industry generally remain highly vulnerable to call that related volatility now altering the call back to jenny
spk_4: it concluded up with yeah pretty much yeah no hobbies or thought any questions you have open it up with open the nine for written as a reminder you wanting that you on the system i may i'm fighting japanese before my response is a confident it into english please bear with us
spk_7: thank you
spk_0: at this time we'll be conducting a question and answer session if you'd like to ask a question please press star one on your telephone keypad a confirmation tonal indicate your line is in the question kill you my press start you if you'd like to remove your question from the kill for participant using speaker equipment and may be necessary to pick up your headset before pressing the sarkies our first question comes from the line of james rather fight with stephen drunk please visit your question
spk_8: right thank you and congrats on a result here and could you help quantify the extent of capacity limitations that you're seeing today to so we can calibrate where we are today on that and then if you have any as the nano tar have any estimate on how much of a headwind that may have been to the to the copy reported for december
spk_4: thank you them for your first question ah we don't allow me to unfriend japanese bank times a week but then i know him again then you're concerns get a more or not mcclatchy good luck and or you could argue with him in they managed to pick it up in the heebie to the know what is what that if if get them are you me not only the didn't have an impact of citizen cannot cannot you need up the agree from a single gonna him again demonstrated you could the game was i get update on it or not limited to internet
spk_2: i'm in front of the to a shit remains highly fluid up at what we can see it has had a meaningful impact on our sales are particularly as it began in in in the latter half december leading into now out with up with the holidays it it's been on a rolling basis because you're going to prom because i'm i'm i'm gonna do they them or on operating the team recruiting the gym a job with you must do to combat the must admit i didn't know me to do up to or on legal the to get him off i'm assuming that it will go on a customizable wouldn't want them off that being said our our our operations department are opening team are pretty team are working on all cylinders and as a result the majority of our restaurants are able to operate without issue and so that they get we're very proud of and and grateful for the work they're doing on auto just want to mention that is operating limitations or resulted quarantine ships is about anything like government mandy
spk_8: oh thanks for the clarification and that helpful and and it in the second question i had which is regarding that the traffic discussion you mention dumped demand is very robust and i've seen that myself not easy to restaurants but he said table turns and craft that limiting some of the traffic recovery some at my question is what can you do due to increase those table turns and clawbacks know that traffic yeah maybe to technology or can you push people to shoulder period just give me ideas about what you can do to bring of people turn down thank you
spk_4: your mother an affair with only going to meet the to keep him a can guide with someone with them only wants to get and put it on to the out you political to on the touch the mosque it'll them table time you go anymore another go on on a month one of the suitable know the to pull them from the it took an emitter good idea they want other people don't come up with the up and nickel what about a concrete you could somebody must see what are the to get a good at a anymore on all mama getting that yup they're probably come up with them to get them must seat on or model books about makoto and all day with and get in a good bit of in a syllable and if photo moment of the a to the another not good at all cause great video from cooking some of the food that you don't want to go on august that you couldn't come back and
spk_2: i am intrusive producing people turn times the a good media focus of be the tree initiatives that we've been discussing scored were you that would be our table i payment are at cut gonna bring quarters and now our robot servers which which are working very well be as we've seen in the pilot so far on what we want emphasize years the able to times are not a permanent impact on our on our operational throughput it's really odd a result of the additional in quitting procedures that we take in between parties and so that that efficiency will be naturally regained as you exit the pandemic or besides efficiency some traffic pressures have been ongoing a metropolitan areas where are the restaurants are highly dependent on foot traffic that we do believe that we can make up or traffic passes through it increased marketing efforts the robot servers or besides being yeah and efficiency measures are really a meaningful addition to the courage periods and there are highly instagram mobile it's up to a great draw for for guests
spk_8: very helpful thank you
spk_9: extremes
spk_10: i said and games
spk_0: our next question comes from a line of andrew strauss with the allow capital markets pleased to hear your question
spk_11: a good afternoon and to grass on very nice quarter
spk_2: i guess first i just wanted to clarify on the on the sales games as you gave i know the commentary was your assuming no further i guess you know implications for some covered cetera but but what what exactly does that mean i mean if you held candidate this three felt relatively go the top level that that you would be an arranger you're similar things about where they were i gave just trying to a jacket to come judges with research chance and or i mean it that the ah take into account what we saw in the business in december which included you know as the my progressed ah
spk_5: some more impact or challenge from from on the crime and i would i guess is emphasize that know that situation to salvage truly he for our operations team and are hr folks it's a it's a daily monitoring situation your something can arise in a given restaurant without a positive case let's say among the team members
spk_2: and then result in the need to quarantine a certain number of the members who have been in contact with that individual and they're working very hard day to day to to work through that he our view is that you know we believe the the level of that activity is is a temporary situation hard to say what temporary exactly means but but you know for the near term were just really pivoting and adjusting on up on our almost daily basis and some of our restaurants given the circumstances and so we think out for the for the entire year and the guy that we we gave our revenue ah amateur some some expectation that that over time you know that the on the crime situation will moderate within the year here and not not be you know as much of a challenge maybe from one day to the next as as it's been a blade but we certainly buildings and expectation right now for
spk_5: for some some difficulties that that go along with that said that we're living through and app and for the last few weeks
spk_2: got it okay that that's that's pretty clear and then second question
spk_11: in the i guess your ass last quarter and were prepared to to kind of commit i'm she wasn't included in the formal guidance but you know especially with the commentary you gave around the restaurant level margins this quarter and was your typically as easily weaker period is there or go cause college you can get on where you think with him ad sales range a restaurant parties my land or or or maybe some some coronary up being impacted on the top side so much from an evolutionary perspective as just any anything to help us think about the margin trajectory here up with you
spk_5: yeah yeah in and yeah i'll start you know with with with the caviar about what we just talked about in terms of sure
spk_2: but he volatility but but you know to the typically for us are our season all you know i our most recent pre covered year had about twenty three percent of our sales base in the first quarter ah and that would you know without then it went to twenty four as he had forty seven percent in the front half and fifty three percent in the back after the air yeah things like food or gonna be you know they should be almost completely variable labour is is sort of semi semi back semi variable depending i think about it and then when you get into occupancy costs and some of the other costs you know more of that is leverage ball once you start rolling sales so if if you think in terms of of that balancing but also you know with the caveat that he the quarter we're in right now now faces some garbage the challenges that that mortars has significant at least in the earlier part of the one that can help you maybe do some modeling around the business and suffice to say we're very encouraged by being at nineteen and a half percent only fifty basis points from our historical peak annual margin in in what is typically in keyuan a lighter seasonal sales quarter and sell you know the pricing that we've met taken the impact or or really positive reception you know that continues from our customers about about our value yet we think those are bode well for our our future opportunity to grow margin that that makes a lot of sense a nice try to squeeze one more in here just looked interesting entering a new market in arizona in this environment which presumably doesn't have as much of an impact on from from coby generally as maybe some others but i guess i'm curious what is your willingness to enter other markets and be more and acted you know or would you would you can read prioritize that the markets that you're looking at or or is that to gonna prisoner the moment just curious for your thoughts on on the arm of the market level candidate openings in it
spk_4: what been on or contact customer comes to or another club it comes to the institute of market of activity i and all mcnabb article go on a when i get an easy to get him on the one i want to know on my body is the in one he didn't get a good for the and according a on a or looking up on all
spk_2: still development and thirty two headed toward automotive could go to can you might get the book on all existing a market to put him on it's he's in a couple it take you know what you down open to the get you could even hundred and fifty million or even up on all the unbeatable that's an authority on organized you'll get in a good i didn't cause it is dismissed i am in to or be says we typically thank twenty year leases and the impact everything from the pandemic temporary and so we're not making any fundamental changes to are developing strategy in response to the pandemic of largely speaking we will continue to pursue the strategy that we perceive things going public as doing a fifty fifty split between entering new markets marketed into existing markets and ah since you brought it up arizona of while being at a new market has the minimal impact are limited impact remember tron and is performing extremely well
spk_12: during her to do your thank you very much
spk_13: and candy
spk_14: a gander thanks
spk_4: our next question comes from a line of sharon's at with blair pleased to see that your question the hi good afternoon am i guess when you think about the trends here in the second quarter can you talk about you know where you've seen more of an impact if it's than california or texas relative to the
spk_2: he had a november trend and then i understand the reduce to hours and the seating capacity dynamics are sensitive whether the labour quarantining but are you sensing or have you had any evidence and consumer reluctance to come into the restaurants so so are the another not monica you are unable to deal with as he could not on a good they wanna put this on a building on obesity go to the an opponent stop you gotta do got you to go to the point that upon the uncuttable your to put them together on a forty much on mobile the body coincidental a deal that will get you could have to the most likely those
spk_4: i carry terms of what we're seeing and quarter to date we're not really seem too much about geography specific in practically it really does boil down to eat restaurant and the number of employees or for tuning so it really does very case by case as opposed to a geography by geography
spk_2: total audit summon up on all not gonna unload total democrat on what investors on almost any more my open up month and hesitance you know a of and none of the on what would we're going on and all the not even a good to or somebody what about in a hotel or but it or not on logic i'm not as good as the other fantasy thing to appeal to me that so thought that the what than a ego to get it if any unaccustomed promoted on on he be go to the cardigan about it's not it's an aquatic got have felony have some that corner on all the begging for the to book or he did it was committed and i think to to up on for one console do not to it and if even you dumbest i got a button
spk_14: pick up the on current situation remains highly fluid and so we can always get what we've seen so far but so far we've been very encouraged by a lack of zimmer has pc changing consumer behavior i think this is clearly demonstrated by how longer wait times out of the how our retains really haven't changed since and
spk_15: read the overcrowded era in terms of the cells pressure that we're seeing it's really more result of he on the quarantining that we're doing out of it but it's a caution mother that results in out your operating hours or diminished seating capacity that's where the cells pressures coming from it's really not from drama a demand related aspect
spk_14: great that that's very helpful and and i'm also curious as you seen off premises take up when i know seasonally typically of premises the take up on the winter but if you can have levels that a seasonally have you seen that increase in the summer and so far to january and in a second question on that i know there were some
spk_16: the couch hello
spk_17: dynamic dynamics associate with new units that you were going on corporate to kind of they can be all premises business more frictionless can you give us any update on that as a relief to new and development
spk_5: truth about are unnecessary
spk_2: i'm sorry go ahead yeah we felt i was just a repeat for a moment on the premises sales sharing what will bring more detail about to to ended the conversation will we talked about the there was a overall what we did see came into wife was kind of what what we would expect with is a slight percentage decline as a percent of the overall because we had a quarter were all three months we had called dining room capacity versus and que one california was only two and a half hour the three ah but in terms of you know it it is it's it's still an area in our promises that that we know there's a certain band of customers that that might to consume but what will will share more detail on the quarter when we get through it
spk_18: enter enter your second question on the units that are geared towards easy more frictionless
spk_0: our promises whether that's curbside parking or at a pickup window that does it get to be those remain in or pipeline so and no up a pair at st thank you
spk_19: pictured in some as a reminder if you'd like to ask a question please press star one on your telephone keypad our next question comes on a line is jeremy hamblin krakow i'm pleased that he did your question thanks an hour at my congratulations on a straw momentum of the business i'm i'm on a prudent come back here to the comp break down in in particular december you know in terms of that's what the you saw in one taxes up almost twenty percent california up over twelve how
spk_2: how to split then
spk_5: in the december period
spk_2: so technically so if you look at december overall taxes continues to outperform california are you know on a cop basis and it's it's pullback was a little bit more than than the change in california if you just go you know sequencing he one to december the i would add it out the december in in addition to what we've talked about on the the a crime challenges to are stopping it was also a little bit less favorable from a calendar perspective than two years ago we reach we can a lot with this year we lost a weekend to both like a christmas a few years eve whereas yeah two years ago it was it was a mid week that of holidays sell sell a few things there and then and as well
spk_19: it don't know if you caught during our our are prepared remarks but we we we laughed uprising about as well from december nineteen that was a amid single digit increase at that time so that the pricing delta between the a two year period is last when you look at december vs t one but but having said that he owe taxes continues because they're very strongly positive and and more strongly than than california and the month of december
spk_20: okay
spk_19: got it and then i just wanted to come back they are i did miss the in terms of the the nineteen point nine percent in one
spk_5: versus twenty nine nineteen go to break down of transaction growth or back and change i should say vs on average a check sure sure sides idea jimmy talked about it he did the vast majority of the difference
spk_2: can be attributed to the pricing that that
spk_5: teams that had happened over that two year period it was it was ah whereas the cop was the nineteen point nine was about eighteen percent of pricing over over a two year period and and i think at least three pricing events during that time window and so we we out caught the pricing by a slight amount and
spk_2: the two elements that go into that as jimmy talked about the plates being consumed per customer on average between the two periods was was up and your we attribute or that tells us a few things one one you know we don't feel like our customers are are pushing up against a price value threshold or anything of that nature at this point
spk_5: you know those pricing moves did not cause them to pull back on their yoda play count averages you know and to the contrary you know because of it i would say the value we offer our marketing activities are rewards program success were actually
spk_19: selling more plates per customer than we did two years ago and then that increase was was partially offset by the traffic reduction over the two years which which we called out is approximately eleven percent reduction in the comp stores over the two years on with that largely associated with the fact that there's there's covered related activities that that do put some pressure on our turn time capabilities in the restaurants you know things around how we have to sanitize between people settings and also what things we can leave on the table right now at least for for customers versus what has to be replaced every time a new set of customers comes in so does that give you a cat of that anatomy i guess of the number mercer yeah that's that's super helpful i want to come to our unit growth of the time in a obviously open to to you and it's subsequent to
spk_4: code red you said your head two more that are under construction currently and then we find on three additional locations
spk_2: could you provide a little bit more color in terms of of the pie mean of you know completion for the units that you have had of under construction and the pie mean for you know the back half of the year as well
spk_19: so model on only didn't wanna go to the good adult more suitable because you're on and most of them are on or could you even you or what you know don't get those few months of look at on on all up in one of the continent condom to give customers in a difficult issue is good too much further than a kid of the unlimited amount of that article a keep whatever you want to get to be got a nice quality can't continent you've got a critical to get that isn't the i'm not big enough tiny you to knock out a good quality sixty one i did uncommon i am so week we do have to eat us under construction are making great progress money is in san antonio texas the other is her upcoming location in watertown massachusetts were very close to breaking ground on two additional units are given that we have a or to google construction time as forty five months you could extrapolate what are expected cadences they're obviously with additional pressures on municipal governments terms of permitted under inspections out there can be the ways that are outside of our control the currently that's what we're expected
spk_21: gotta help that was one for me so
spk_19: as we look at your ah you're good at volume year and in the cops up twenty percent person two years ago
spk_5: when we look at the other operating costs line item where you have your your utilities repairs and maintenance your credit card
spk_2: i'm you you have that why know them off by think about forty basis points vs to one levels from two years ago i wanted to understand with components were the driver of that is that more coming from the maintenance and repairs or is that you know that point
spk_5: sure how much credit card fees are up and the percent
spk_2: of the sale that my private anymore colleagues your map on that increase of forty basis points
spk_19: yeah i don't know that i could speak to the precise the don't change or build it for you necessarily but be a components the go in there like credit card fees they really are straight variable you they run as a percentage of sales ah some of the small to old expenditures know for for the little bit about promised
spk_5: this business that we do there are sought some additional costs that that run through the p a now and the other costs area that that would perhaps be a minor in a be leveraging factor on a on a on a sales numbers since you know we have a meaningful percentage of business happening there is a think like insurance costs with with growth in the business as well
spk_0: they tender they tend to go up you know along with the exposure
spk_22: metrics and and those exposure metrics or often sales from the insurance company the you so so sad you know some of those costs you know maybe not as as as leverage of all over a year period as as others i'm like in the occupancy you know the pure rat category for instance great book our best wishes for continue to go that may or may or may think it's
spk_6: our next question comes on the line of george kelly with ross capital pleased to see what your question
spk_4: everybody thanks for taking my questions ah so just a couple of for me first
spk_2: i was hoping you could start with the
spk_1: the tech initiatives that you talked about it did you say that the table side came it is now fully rolled out across all your restaurants and if i heard that correctly
spk_4: impactful is it how how how much of an impact you think that will have on turns in and not and timing at the table jokes mother uno a vivid the go to a prototypical pattern of yes there are no in but it'll be concerned i was getting more crew on what many me that and what we'll do i was little the that it would you the political comic of comical but up on all that i wanted a couldn't couldn't take it isn't it and or what are the book of fit on customer services
spk_2: a book of the for the committee me the food phenomena you mentally addictive think it a into the go to on a happy to get outta took name is phenomenal on a statements modernism like it or a lot yes a brought of complete and now and all or restaurants becomes the impact we are we've already seen a reduction in the work where there are servers are responsible for nbc not translate into greater killer observer satisfaction on in terms of people to times the pilots been going on for too short period for us to qualified that are built for to fly guppies the teacher
spk_18: i thought i got on all your that our and all that you eat it usage data usage data is on color and all my my what it did you got a neon er the button below decks and the but it's got the don't get a move on or guy a good with have a payment or she was still pretty for that but pop pop into your hundred percent of their fungible but him put it on my data hum
spk_22: linda cannot get some upgrades to bother to guess a good humble the gonna get some of the table by the payment of happy with articles call it my brother get an allotted over the had to have to for the to get a month
spk_2: to providing additional color or historically in terms of our at customers payment methods about eighty percent his country cards looking at or cables i came in abusive rates across all transactions or about thirty percent to thirty five percent of just under half of that eighty percent of that we've mentioned earlier so you can imagine to come have impact of having terms of producing at work was for servers okay that's helpful thank you and then next question for me as a different topic
spk_6: in the past you've run promotions and prizes that are really impactful and drive a lot of traffic and in the last two years since pre kobe i mean you've grown so much in units in and just absolute level of of traffic and so i was curious as you look forward i'm sure that those promotions and and special prizes and things take a lot of planning and just as you kind of map out the next year so or other a lot more kind of special partnerships and promotions that are becoming available to you just because of your increase scale
spk_18: absolutely absolutely that the case that was one of the think that were most excited that when we went public in two thousand nine team up until that point lead really work with a smaller brands our own proprietary characters are japanese brands on since going public we've had access to much larger internationally known brands
spk_22: right now we're partnering with tetris which is no one of the bathroom video games of all time and we have an upcoming partnership with a pac man as well and we just added we can be completed in a recent partnership with sonic and you can see the quality of the partnerships are improving on every year at incredibly proud of work is being done by er pr and marketing department
spk_18: in terms of didn't you updated terms of what's up coming up we we like to say pretty tight lipped apps are that is to the like teachers don't much disclose think too far ahead that we are very excited to for what we have no pipeline
spk_22: okay cool and last question for me
spk_18: i appreciate that the info you gave us on leasing under construction and and development pipeline
spk_4: but if we could go and i don't know how much you're gonna want to say here but could you go one way or kind of higher l allies or the things that i don't know what other of bad numbers you could give just aren't on number of things that are maybe in the pipe for more of a next year event and what i'm trying to understand better is
spk_2: how much it is this year was more of a normal environment with timelines i know that construction is taking longer than normal
spk_1: but you've made a lot of corporate investments and and getting that development team replace i'm just curious what kind of a normalized ah
spk_4: you could look like beyond our this fiscal year in in new store openings so mother another obama bet it was up in atlanta it'll away or that not the bloke he did i
spk_2: ah but i would sort of imogen back when it comes to an old school of the good schools they could be were on all what am i the public good suitable negative for the but wait until on into that fucking i took we must have course they as international in terms of allies up we'd we'd like to continue with the information that we've already shared publicly which paved the way he says for the the remainder of the your we executed bit as you can imagine we're very diligent with maintaining a strong pipeline them allies given our aggressive grow plants the that are on all put it kind of get a more moderate him off on a little the have been under the don't the financial magical on all of that he can't your to your innovate and a concept some pretty little on kicking some smuggler for but i didn't agree that that it is about that you victim agree that other that one must it's building an awfully among the my dick on guy and husband put it to provide us with not ah fremont against anyone getting a little before they call norman them up the cardinal an integral a not be funny cause you are put off on of eternity on a method of the war on a screen me the ultimate item on all go to get a good quality atlanta management and pipeline about he greeted economy to the it to the know about by most corrupt and okay forget to try to convert the most definitely feel good about guy to build the done with it on all a potato head into the for political divide it was put on of like a lot of
spk_22: i am a from some kirk construction periods of we're seeing the same thing that we're that the rest the industry seen in the dirt or some supply chains always turns a construction materials and
spk_23: a frenetic an inspection to take a little bit longer than to go on but that it can get it you to get up and you'll got to be gave and reaffirmed today foods that expectation to it and remain confident that we can hit those it can units in terms of a more normalized environment they're really three factors that determine our or
spk_24: growth rate for should be our ability to identify high quality sites the second would be the quality and replied size for management pipeline and the federal bureau liquidity off with a critic replace up and we think we're a position to to grow catcher in the right
spk_0: the rights to to earth right environment it is there and so if could be it automatically reevaluated were afraid and provided a a new target degree to which i doubt that the future

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