Kura Sushi USA, Inc.

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Kurosushi USA Inc. Fiscal Third Quarter 2023 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode, and the lines will be open for your questions following the presentation. Please note that this call is being recorded. On this call today, we have Hajime Jimmy Uba, President and Chief Executive Officer, Jeff Utz, Chief Financial Officer, and Benjamin Portin, SVP, Investor Relations and System Development. And now, I would like to turn the call over to Mr. Portin.

Thank you, Operator. Good afternoon, everyone, and thank you all for joining. By now, everyone should have access to our fiscal third quarter 2023 earnings release. It can be found at www.kurosushi.com in the Investor Relations section. A copy of the earnings release has also been included in the 8K we submitted to the SEC. Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance, and therefore we 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 conditions. 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 digital information should not be considered in isolation, nor is 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. I'm pleased to announce another excellent quarter for Kurasushi. both in terms of restaurant-level performance and corporate initiatives. Year-over-year revenue has grown by approximately 30%, driven by our aggressive unit growth and industry-leading comparable sales tolerance. Our G&A leveraging efforts continue to bear fruit with an improvement of 130 basis points over the prior year as well. I'm exceptionally proud to see Kurasushi continue to mature as a company as it expands its footprint and takes strides towards greater profitability. Third quarter revenue was $49.2 million, with comparable sales of 10.3%, which breaks down to 3% traffic growth and 7.3% in price and mix. Our traffic continued to lead the casual dining industry, with our third quarter traffic outperforming industry averages by 830 basis points. June performance has been even better, with total sales of $17.6 million and comps of 14.7%. As these results demonstrate, guest sentiment for Kruger remains extremely strong. The inflationary pressures that we saw earlier in our fiscal year continue to ease, with cost of goods sold as a percentage of sales coming in at 30%, which is in line with the all-time best we saw in fiscal 2022. Labor costs as a percentage of sales were 29.2%, representing an improvement of 180 basis points over the prior year. Our third quarter restaurant-level operating profit margin of 23.5% represents an improvement of 100 basis points over the prior year. I'm also very happy to note that between our growth in restaurant-level operating profit margin and the improvements in G&A, we were able to grow our adjusted dividend margin by 200 basis points over the prior year and our net income margin by 210 basis points. During Q3, we opened one new restaurant before Georgia and one more new restaurant subsequent to quarter-end in Framingham, Massachusetts for a total of seven new restaurants opened to date during this fiscal year. We have seven units under construction as well as 11 more executed releases. We are in an excellent position to achieve our unit growth goals for fiscal 23 and couldn't be happier with the pipeline we have showed up for fiscal 24. Our new waitlist app has been successfully rolled out across our entire restaurant system. While it's too early for us to provide quantitative data on its impact, we are very encouraged by early results. WEPA times are meaningfully more accurate, and we believe this is part of why we continue to outperform our peers in terms of traffic, which is further underlined by the exceptional performance we've seen in June. Our rewards membership continues to grow, with approximately 120,000 new members over the course of the quarter. Our Demon Slayer campaign, held during April and May, again proved to be another great success and comp driver, and our current collaboration with We Bare Bears, a television program on Cartoon Network, has far exceeded our initial expectations and has delivered some of the strongest guest responses we've seen of any collaboration which set our restaurants up for our amazing June. As a final note, I would like to provide some updates on pricing. We lapped approximately 2% of pricing on March 1st, bringing our effective pricing for our fiscal third quarter to 13%. Subsequent to the quarter, we lapped 6% of pricing on July 1st, which was partially offset by 2% pricing that we took concurrently. The relatively modest scale of this most recent pricing event reflects our confidence in the normalization of inflationary pressures seen earlier in the fiscal year. Lastly, I would like to share my deep appreciation for the amazing work by our employees, both at our restaurants and corporate support center. Thank you, everyone. And with that, I will turn it over to Jeff to discuss our financial results and liquidity. Jeff?