Executive Summary

Q4 FY2024 delivered $66.0M revenue (+20% YoY) with comps at -3.1% as consumer softness moderated versus prior expectations (management had guided to negative high-single-digit comps) and restaurant-level operating margin held above 20% .
GAAP diluted EPS was $(0.46) vs $0.25 last year, driven by a $4.7M litigation expense and a $1.6M impairment (Aventura, FL); adjusted EPS was $0.09, adjusted EBITDA $5.5M, and cash was $51.0M with no debt .
FY2025 initial guidance: revenue $275–$279M, 14 new restaurants (~>20% unit growth), G&A ~13.5% of sales, and ~$2.5M net capex per unit—management positioning guidance conservatively despite a stronger start to FY2025 .
Operational streamlining and technology initiatives (reservation/self-seating system, smartphone ordering) are expected to lower labor intensity; reservation system could add up to ~50 bps margin benefit later in the year .

What Went Well and What Went Wrong

What Went Well

Maintained best-in-class restaurant-level operating margin above 20% in Q4 despite sales deleverage; restaurant-level operating profit was $13.8M (20.9% of sales) .
Pacific Northwest expansion exceeded expectations (Beaverton, OR and Tacoma, WA strong openings); Bellevue remains the top performer, reinforcing portability and market white space .
Cost of goods sold improved 100 bps YoY to 28.5% via quality improvements and supply chain initiatives, while pricing held modestly (~4% in Q4) .

Management quotes:

“The sales pressures beginning in April improved significantly over the course of the quarter… fourth quarter comps of negative 3.1% as compared to… negative high single-digit comps.”
“We completed the full rollout of our back-of-house streamlining… delivering expected improvements to labor cost.”
“Beaverton… and Tacoma… have exceeded our already high expectations.”

What Went Wrong

GAAP profitability impacted by non-recurring items: $4.7M litigation expense and $1.6M impairment; operating loss $(5.8)M vs $2.2M last year .
Comps were negative (-3.1%), with traffic down 2.4% and regional weakness in Southwest (-8.9% comps), partly due to cannibalization from infills and macro factors .
Other costs rose to 14.7% of sales (utilities, delivery fees, software, operating supplies), pressuring margins despite COGS gains .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$57.3	$63.1	$66.0
GAAP Diluted EPS ($)	$(0.09)	$(0.05)	$(0.46)
Adjusted EPS ($)	N/A	$0.00	$0.09
Restaurant-level Operating Margin (%)	19.6%	20.0%	20.9%
Adjusted EBITDA ($USD Millions)	$2.85	$4.45	$5.50
Comparable Sales (%)	+3.0%	+0.6%	-3.1%
Traffic (%)	N/A	+0.3%	-2.4%
COGS as % of Sales	29.6%	29.2%	28.5%
Labor as % of Sales	32.8%	32.3%	31.1%

KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Restaurants (end of period)	59	63	64
Cash & Equivalents ($USD Millions)	$56.8	$59.4	$51.0
Off-Premise/Delivery Mix (% of Sales)	N/A	N/A	3.2%
AUV (FY basis)	N/A	N/A	$4.228M (FY2024)

Notes:

Q4 GAAP EPS includes $4.7M litigation and $1.6M impairment; adjusted metrics exclude these items per reconciliation .
Regional Q4 comps: West Coast +3.9%, Southwest -8.9% .

Segment breakdown: Not applicable (single restaurant concept) .

Guidance Changes

FY2025 Initial Guidance (issued with Q4 FY2024)

Metric	Period	Previous Guidance	Current Guidance	Change
Total Sales ($USD Millions)	FY2025	N/A	$275–$279	New
New Restaurants	FY2025	N/A	14 (~>20% unit growth)	New
G&A as % of Sales	FY2025	N/A	~13.5%	New
Net Capex per Unit ($USD Millions)	FY2025	N/A	~$2.5	New

FY2024 Guidance Timeline (context)

Item	Q1 2024	Q2 2024	Q3 2024	Actual FY2024
Total Sales ($USD Millions)	$239–$244	$243–$246	$235–$237	$237.9
New Restaurants	12–14	13–14	14	14 opened
G&A as % of Sales	~14.5%	14.0–14.5%	14.0–14.5% (ex-litigation accruals)	14.1% (FY)

Earnings Call Themes & Trends

Topic	Q-2 (Q2 2024)	Q-1 (Q3 2024)	Current (Q4 2024)	Trend
Technology & Ops	Smartphone ordering rollout; robotic dishwasher testing; “Sushi Slider” certification; DoorDash launch	Reservation/self-seating system under development; structural back-of-house streamlining underway	Back-of-house streamlining completed; reservation/self-seating porting proceeding; first implementation early spring; potential ~50 bps benefit	Execution advancing; incremental labor efficiency tailwinds
Supply Chain & COGS	COGS deflation and supply chain initiatives; pricing modest	Continued pricing/supply chain benefits	Basket diversified; low single-digit commodity inflation assumption; redundancy across two broad-liners	Stable costs with redundancy, modest inflation
Macro/Tariffs/FAST Act	Value proposition vs wage increases; not under FAST Act umbrella	April–May macro-driven deceleration; comp guidance cautious	Macro recovery underway; Q1 FY2025 stronger vs Q4; conservative revenue guidance to avoid over-commit	Improving trajectory; cautious stance
IP Collaborations & Marketing	Dragon Ball announced; effective targeted marketing	One Piece planned; loyalty-driven promotions	Pikmin collaboration; fewer, higher-quality collabs; expanded food-focused campaigns at lower cost	Shift to higher-ROI campaigns, cost discipline
Regional Trends	West +8.7%; Southwest flat	West +7.3%; Southwest -3.9%	West +3.9%; Southwest -8.9%; cannibalization in Houston/Dallas infills	Continued divergence; active pipeline management
Regulatory/Legal	SOX 404(b) costs; litigation accrual in Q2	Litigation accrual in Q3	$4.7M litigation expense; wage/hour claims; $1.6M impairment	Non-recurring headwinds impacted Q4 GAAP
Off-Premise/Delivery	DoorDash terms expected margin neutral/accretive	Rollout cadence; ops throttling to protect in-store capacity	Mix 3.2% of sales; in-market price parity; DashPass leverage	Building a small, accretive off-premise base

Management Commentary

Strategic priorities: Maintain >20% unit growth, sustain restaurant-level margin >20%, leverage G&A, drive operational excellence despite macro volatility .
“Our new fiscal year is off to a strong start… Q1 is definitely outperforming Q4… prudent not to be overly aggressive with our revenue guidance at the beginning of the year.”
Labor: “Operational streamlining are structural… increase in sales would not require an increase in labor… we expect labor as a percentage of sales to be better than fiscal ’24.”
Marketing: “We are going to be more discerning with our IP collaborations… prioritizing quality and broad-based appeal… more cost efficient than rolling IP collaborations.”
Development: “We currently have 6 units under construction… remaining 9 openings will be backloaded for Q3 and Q4… Pacific Northwest exceeded expectations.”

Q&A Highlights

Guidance conservatism: FY2025 revenue guide reflects prudence; management prefers avoiding mid-year downward revisions despite better Q1 trends (early FY2025) .
Pricing: ~4% price in Q4; considering taking price before year-end to capture December holiday demand; typical cadence previously January/July .
Labor & tech: Streamlining is structural; reservation/self-seating system targeting up to ~50 bps margin benefit; FY2025 labor % expected lower YoY .
Commodities: Assuming low single-digit commodity inflation; diversified basket and dual broad-liners provide redundancy .
Cannibalization: Acknowledged impact from infills; pipeline adjusted to prune LOIs to minimize cannibalization; expect more new-market mix from FY2026 onwards .
DoorDash: Off-premise mix 3.2%, marketplace pricing equals in-store; DashPass enhances consumer value .
Litigation: ~$4.7M wage/hour-related expense; limited detail due to ongoing matters .

Estimates Context

S&P Global consensus EPS and revenue estimates for Q4 FY2024 were unavailable due to access limits; as a result, we cannot quantify beats/misses vs Wall Street consensus for this quarter at this time. Values would ordinarily be retrieved from S&P Global; unavailable in this session.

Key Takeaways for Investors

Structural cost actions and maturing tech stack should support sustained >20% restaurant-level margins even as comps normalize, with potential incremental ~50 bps benefit from reservation/self-seating later in FY2025 .
Conservative FY2025 guide (sales $275–$279M) creates room for upward revisions if macro and traffic continue to improve; watch cadence of price actions into year-end and loyalty-driven traffic initiatives .
Portfolio management is shifting toward fewer, higher-ROI collaborations and more food-focused marketing—expect lower “other costs” intensity and cleaner flow-through when IP cadence moderates .
Regional divergence persists (West outperforming; Southwest pressured by infills); near-term cannibalization manageable with pipeline pruning and more new-market mix from FY2026 .
Off-premise is small but growing (3.2% mix), with unit economics supported by favorable DoorDash terms and in-restaurant price parity—margin neutral to accretive .
Litigation/impairment were notable Q4 GAAP headwinds; adjusted metrics and cash position remain solid to fund >20% unit growth (cash ~$51M; no debt) .

Sources: Q4 FY2024 8-K and press release with reconciliations ; Q4 FY2024 earnings call transcript ; Prior quarters’ calls and releases .

KURA SUSHI USA, INC. (KRUS)·Q4 2024 Earnings Summary