Executive Summary

Fiscal Q1 2025 delivered sales of $64.5M (+25% YoY), positive comps (+1.8%), and improved profitability metrics (Adjusted EBITDA $3.6M, margin 5.5%), while net loss narrowed to $(1.0)M (EPS $(0.08)) .
Management reiterated FY2025 guidance (sales $275–$279M, 14 new restaurants, G&A ≈13.5% of sales), signaling confidence in unit growth and cost leverage; cash strengthened via a ~$64.4M follow-on offering completed in Q1 .
Operational tailwinds: pricing and supply chain drove COGS leverage (29.0% vs 29.8% YoY); marketing mix improved via “Perfect Pair” food promotion and IP collaborations (One Piece, Pikmin), while tech initiatives (reservations + self-seating, Mr. Fresh upgrade) target labor and guest experience gains .
Near-term watch items and potential stock catalysts: sustained comps improvement, execution of tech rollout (store tests in Feb, broader rollout starting April), and guidance durability vs Q2 headwinds (no IP collab, tougher lap); consensus estimates were unavailable via S&P Global at time of query .

What Went Well and What Went Wrong

What Went Well

Positive comps returned (+1.8% YoY), driven by improved mix and successful IP collaborations (One Piece, Pikmin) and food-focused promotions (Udon + Perfect Pair) .
Cost control delivered record Q1 Adjusted EBITDA margin for a fiscal first quarter; COGS % improved to 29.0% from 29.8% YoY due to pricing and supply chain initiatives .
New openings exceeded expectations, including strong performance in smaller DMAs (e.g., Beaverton, WA/Tacoma, WA), expanding the long-term market opportunity and unit economics confidence; six new restaurants opened in Q1 .

Management quotes:

“Adjusted EBITDA margins have achieved an all-time high for a fiscal first quarter, thanks to companywide efforts to control costs.” – CEO Hajime Uba .
“We’re off to a great start, and I’m extremely excited for another banner year at Kura Sushi.” – CEO Hajime Uba .

What Went Wrong

Labor deleverage: labor as a % of sales rose to 32.9% (from 31.9% YoY) on wage inflation and high-labor-cost markets; traffic was -2.3% with price/mix +4.1% .
Operating loss persisted ($(1.5)M), with restaurant-level operating margin down to 18.2% (from 19.5% YoY), reflecting wage inflation despite COGS gains .
Near-term marketing cadence: no IP collaboration in Q2 (lapping a strong “Peanuts” campaign), increasing comp risk; management will focus on profitability and alternative promotions .

Financial Results

Multi-Quarter Trend (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Sales ($USD Millions)	$63.082	$66.012	$64.456
Diluted EPS ($USD)	$(0.05)	$(0.46)	$(0.08)
Restaurant-level Operating Margin (%)	20.0%	20.9%	18.2%
Adjusted EBITDA ($USD Millions)	$4.451	$5.496	$3.572
Adjusted EBITDA Margin (%)	7.1%	8.3%	5.5%
Operating Income Margin (%)	(1.9)%	(8.8)%	(2.3)%
Food & Beverage Costs (% of Sales)	29.2%	28.5%	29.0%
Labor & Related Costs (% of Sales)	32.3%	31.1%	32.9%

Q1 2025 vs Q1 2024 (YoY)

Metric	Q1 2024	Q1 2025
Sales ($USD Millions)	$51.475	$64.456
Operating Loss ($USD Millions)	$(2.841)	$(1.474)
Net Loss ($USD Millions)	$(2.047)	$(0.961)
Diluted EPS ($USD)	$(0.18)	$(0.08)
Restaurant-level Operating Profit ($USD Millions)	$10.061	$11.714
Restaurant-level Operating Margin (%)	19.5%	18.2%
Adjusted EBITDA ($USD Millions)	$1.767	$3.572
Adjusted EBITDA Margin (%)	3.4%	5.5%

Estimates Comparison (S&P Global)

Consensus estimates for Q1 2025 (EPS and revenue) were unavailable via S&P Global due to request limits at query time; estimate comparisons will be updated when accessible [GetEstimates errors]. Values retrieved from S&P Global.*

Metric	Actual Q1 2025	S&P Global Consensus	Surprise
Revenue ($USD Millions)	$64.456	Unavailable*	N/A
Primary EPS ($USD)	$(0.08)	Unavailable*	N/A

KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
Comparable Restaurant Sales (%)	+0.6%	(3.1)%	+1.8%
Restaurants at Period End (units)	63	64	70
Price/Mix (%), Traffic (%)	—	—	+4.1%, −2.3%
Regional Comps (West Coast, Southwest)	—	—	+7.8%, −0.3%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Sales ($USD Millions)	FY 2025	$275–$279	$275–$279	Maintained
New Restaurants (units)	FY 2025	14	14	Maintained
Avg Net Capex per Unit ($USD Millions)	FY 2025	≈$2.5	≈$2.5	Maintained
G&A as % of Sales	FY 2025	≈13.5%	≈13.5%	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q3 2024, Q-1: Q4 2024)	Current Period (Q1 2025)	Trend
Tech initiatives (reservations, self-seating, Mr. Fresh upgrade)	Focus on operational streamlining and cost control amid macro headwinds	First in-restaurant test in Feb; aim for system-wide rollout by end of FY; April rollout start; Mr. Fresh push-button redesign to reduce server time and improve guest experience	Accelerating execution; expected labor tailwind
Supply chain/COGS management	Menu pricing and supply chain initiatives lowered COGS %	COGS % improved to 29.0% (from 29.8% YoY); outlook stable-to-better	Favorable and sustained
Marketing: IP collaborations vs food-focused campaigns	Q3 2024: macro caution; marketing costs elevated	Q1 boost from One Piece/Pikmin; no IP in Q2 (lapping “Peanuts”); differential cost of IP ≈$200k vs food campaigns	More curated IP cadence; alternative food promotions used
Regional performance	Not highlighted	West Coast +7.8% comps; Southwest −0.3% comps	Mixed by region
Labor inflation and leverage	Rising wage rates; G&A litigation noise in Q4	Labor % up to 32.9%; expect leverage later in FY with initiatives; wage inflation high single digits in Q1	Near-term pressure; medium-term leverage expected
Development/DMAs strategy	Continued unit growth (64 at FY end)	Success in smaller DMAs (e.g., Beaverton, Tacoma) enhances total addressable market; 6 openings in Q1	Broadening market footprint

Management Commentary

“Our comps have returned to positive territory. Our new openings are exceeding expectations... Adjusted EBITDA margins have achieved an all-time high for a fiscal first quarter...” – Hajime Uba, CEO .
“Total sales for the fiscal first quarter was $64.5 million... COGS % improved... Labor... increased to 32.9%... We opened 6 new units...” – Prepared remarks summary .
“At the end of the fiscal first quarter, we had ~$111.7M cash and cash equivalents and no debt... reiterate FY2025 guidance...” – Jeff Uttz, CFO (cash level discussed; quarter-end cash per 8-K was $107.7M; call referenced ~$111.7M) .
“Reservation and self-seating... ambitious goal of full system-wide rollout by end of fiscal year; first test next month; rollout expected to begin April.” – Benjamin Porten, SVP IR & System Development .

Q&A Highlights

Comps cadence: Q2 likely more difficult (no IP, lapping “Peanuts”), with focus on profitability; full-year comps expected positive .
Pricing: ~2% menu price taken first week of November; effective pricing ~4.5% in Q1 and a little over 5% in Q2; no firm plan for summer increase yet .
Labor initiatives: ~100 bps back-of-house improvements; reservations/self-seating targeted for an additional ~50 bps; leverage expected to show more in back half .
Marketing cost differential: IP collaborations cost about $200k more vs food-focused campaigns; alternative promotions will fill non-IP periods .
Regional comps dispersion: West Coast strong (+7.8%), Southwest slightly negative (−0.3%) .

Estimates Context

S&P Global Wall Street consensus for Q1 2025 EPS and revenue was unavailable at query time due to data limits; as a result, beat/miss analysis vs consensus could not be completed and will be updated when accessible [GetEstimates errors]. Values retrieved from S&P Global.*

Where estimates may need to adjust:

Momentum in Q1 (positive comps, mix improvement, COGS leverage) vs cautious Q2 setup (no IP collab) suggests models should emphasize back-half upside from tech initiatives and curated IP cadence .

Key Takeaways for Investors

Positive comps (+1.8%) and mix gains show stabilization; watch Q2 comps without IP collab and tougher lap, with profitability execution prioritized .
Pricing/supply chain are working (COGS % down to 29.0%); if food inflation remains benign, margin tailwinds can persist .
Labor remains the swing factor: near-term wage pressure, but reservations/self-seating/Mr. Fresh upgrades and station consolidation support leverage in H2 FY2025 .
Development strategy broadens TAM: strong openings in smaller DMAs de-risk pipeline and support >20% unit growth with ≈$2.5M net capex per unit .
Balance sheet strengthened: ~$64.4M net proceeds from follow-on; quarter-end cash $107.7M; no debt—provides investment capacity and cushion .
Guidance maintained (sales $275–$279M; 14 openings; G&A ≈13.5%); management cautious to raise until trends are durable—upside optionality if back-half initiatives and IP cadence deliver .
Trading lens: near-term volatility around Q2 comps risk and tech rollout milestones; medium-term thesis anchored on unit growth, operational tech-driven labor leverage, and curated marketing strategy .

Notes: Financials and call details cited from Q1 2025 8-K and press release, Q4 2024 and Q3 2024 8-Ks, and Q1 2025 earnings call transcript .

KURA SUSHI USA, INC. (KRUS)·Q1 2025 Earnings Summary