Thank you, Operator. Good afternoon, everyone, and thank you all for joining.

By now, everyone should have access to our fiscal fourth quarter and fiscal year 2026 earnings release. It can be found at www.kurasushi.com in the Investor Relations section.

A copy of the earnings release has also been included in the 8-K we submitted to the SEC. Before we begin our formal remarks, I need to remind everyone that part of our discussions 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 you 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 condition. 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 additional information should not be considered in isolation nor as 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 who is joining us on our call today. As we look back at our fiscal 2026, I am proud of our efforts to protect margin in spite of tariffs and consumer headwinds.

While tariffs collectively increased our cost of goods sold and other costs by 180 basis points over fiscal 2025, we were able to offset these increases with labor leverage of 190 basis points over the prior year, driven by the technological innovation that is core to our concept. Our continued commitment to G&A leverage is reflected in the 90 basis point improvement over the prior year, and we were also able to grow adjusted EBITDA margin and dollars over the prior year.

As we enter the new fiscal year, I would like to share how our priorities have evolved as Kura has matured over the last decade. What began as a local cult favorite brand is now the undisputed leader of the American sushi space.

Prior to Kura Sushi, there have been no nationally successful chains despite the increasingly broad popularity of sushi in the United States. Over the last two decades, we have addressed and solved each of these scaling challenges, and we are now in 25 states with our 100th restaurant right around the corner.

Having completed our national beachhead strategy, I would like to share our major new mid-term goal: we expect to generate positive free cash flow and become self-funding by 2031. This goal hinges on two factors: returning to our historical 20% restaurant-level operating profit margins over this time period, and normalizing our annual unit growth strategy from a percentage-based one to a unit-based one where the annual unit opening count continues to increase each year.

This normalization of our unit growth approach delivers two major expected benefits: the extension of our cash runway through self-funding status, and the elimination of the need for a future capital raise. Now, I would like to move on to discuss our recent results.

Total sales for the fiscal fourth quarter were $88.9 million, representing comparable sales of -5.7%, with -11.5% of traffic, offset by positive 5.8% in price and mix, with effective pricing for the quarter of 4.2%. Over the last year, we have seen mix reach all-time highs, and this trend has only become more pronounced.

Cost of goods sold as a percentage of sales was 29.7%, as compared to 28.4% in the prior-year quarter, due to the impact of tariffs. Our full-year COGS came in exactly in line with our expectations of 30%.

Labor as a percentage of sales improved by 70 basis points to 30.4% due to operational initiatives. One of our goals for fiscal '26 was to improve labor by 100 basis points over the prior year, and I'm incredibly pleased to share that our full-year labor leverage over fiscal 2025 nearly doubled our goal at 190 basis points of improvement.

Turning to unit development, we opened four new restaurants in the fourth quarter: Tulsa, Oklahoma; Austin, Texas; Charlotte, North Carolina; and Parsippany, New Jersey. Oklahoma and North Carolina are both new markets for us, and initial guest response has met all of our expectations.

Subsequent to quarter-end, we opened three new restaurants: Glen Allen, Virginia; Des Moines, Iowa; and Denver, Colorado, which opened just yesterday. Iowa is another new market, and while it has only been open for a few weeks, it's off to a great start.

In keeping with our mid-term strategy, our unit opening expectations for fiscal 2027 are 17 new units. We currently have seven restaurants under construction, but fiscal 2027 openings overall will be heavily backloaded, with current expectations of four openings in Q1, two openings in Q2, five openings in Q3, and six openings in Q4.

I'm excited to share more of our fiscal 2027 IP pipeline. We're currently in our Yoshi campaign, which runs through November and December.

Our Q1 comparable sales to date of -3.1% are a meaningful improvement on Q4, and we are excited for the Yoshi campaign we have slated for November and December. Following Yoshi, we have Hatsune Miku in January and Godzilla in February and March.

We have four more IP collaborations for fiscal 2027 following Godzilla, and I look forward to sharing more of our IP pipeline in our next earnings call. On the note of our IP collaborations and Bikkura Pon prizes, I'm pleased to share that we have fully rolled out our Bikkura Pon dessert purchase option at all of our restaurants.

Now guests have an appealing prize to look forward to regardless of their familiarity with a given IP campaign. We believe this will be a potential opportunity for reductions in other costs as we adjust Bikkura Pon prize order volumes to reflect the revealed preferences of our guests.

In other system development news, we closed the fiscal year slightly ahead of robot dishwasher retrofit schedule, and with 33 retrofits completed today, we have just under 20 remaining. Starting midway in fiscal 2027, all new openings will have robot dishwashers as a default feature.

While we are pleased with the improvement in price and mix, traffic in the fourth quarter did not meet our expectations. We've implemented several initiatives primarily focused on value to improve traffic with a goal of achieving positive comparable sales on a full-year basis.

In order to further bolster our value proposition and in an effort to recapture traffic, we have made the decision to take no pricing to offset the 3.5% that rolled off at the beginning of November. While our pricing strategy will remain flexible, we believe that we will be able to continue to grow margin over the prior year without taking price and that the tariff shock to sushi industry pricing is a major opportunity for us to capture a larger audience.

Before moving on to our financials, I would like to thank all of our team members, both at our restaurants and at our support center, for the great work they have done to provide excellent guest experiences while protecting margin in a challenging environment. Now, I'll hand it over to Ben to discuss our financials and liquidity.

Thank you, Jimmy. For the fourth quarter, total sales were $88.9 million, as compared to $79.4 million in the prior-year period.

Comparable restaurant sales growth compared to the prior-year period was -5.7%, with -11.5% from traffic, offset by 5.8% of price/mix. Comparable sales growth in our West Coast market was -4.9%, and -8.6% in our Southwest market.

Effective pricing for the quarter was 4.2%. As a reminder, beginning with the first quarter of fiscal 2027, we will no longer provide regional breakdowns for comparable sales, as regional comps are largely determined by the timing of infills, and we do not believe they are indicative of overall company trends.

Turning to costs, food and beverage costs as a percentage of sales were 29.7%, compared to 28.4% in the prior-year quarter, due to tariffs on imported ingredients, partially offset by pricing. Labor and related costs as a percentage of sales were 30.4%, as compared to 31.1% in the prior-year quarter, due to operational efficiencies and pricing, partially offset by low single-digit wage inflation.

Occupancy and related expenses as a percentage of sales were 7.8%, compared to the prior-year quarter's 7.1%, due to sales deleverage. Depreciation and amortization expenses as a percentage of sales were 5.6%, as compared to prior-year quarter's 4.9%, also due to sales deleverage.

Other costs as a percentage of sales were 14.6%, as compared to the prior-year quarter's 15%, due to a one-time tariff refund benefit of approximately $0.5 million for some of our promotional materials. General and administrative expenses as a percentage of sales were 11.2%, as compared to 11.7% in the prior-year quarter.

Operating loss was $0.6 million, inclusive of $1.2 million in impairment and asset disposal costs, compared to operating income of $1.5 million in the prior-year quarter. Income tax expense was $86,000, as compared to $43,000 in the prior-year quarter.

Net loss was $0.3 million, or -2 cents per share, compared to net income of $2.3 million, or 18 cents per share, in the prior-year quarter. Adjusted net income was $0.9 million, or 8 cents per diluted share, as compared to adjusted net income of $2.5 million, or 20 cents per diluted share, in the prior-year quarter.

Restaurant-level operating profit as a percentage of sales was 19.1%, compared to 19.8% in the prior-year quarter. Adjusted EBITDA was $7.7 million, as compared to $7.4 million in the prior-year quarter.

At the end of the fiscal fourth quarter, we had $28.4 million in cash and cash equivalents and $37.2 million in investments, totaling $65.6 million, and no debt. I would like to provide the following guidance for fiscal year 2027: we expect total sales to be between $376 million and $381 million; we expect to open 17 new units, with average net capital expenditures per unit of approximately $2.6 million; we expect general and administrative expenses as a percentage of sales to be approximately 11.5%; and we expect full-year restaurant-level operating profit margins to be approximately 19%.

This concludes our prepared remarks. We are now happy to answer any questions you have.

As a reminder, during the Q&A session, Jimmy may answer in Japanese before his response is translated into English. Operator, please open the line for questions.

Hi. Good evening.

I guess the first question is really on the traffic decline, which was pretty sharp in the fourth quarter. Could you provide some more detail on what exactly drove that and maybe what the progression was month by month?

Sure. Thank you, Matt, for your first question.

This question is probably the most critical question during this call. Please allow me to speak in Japanese and take time to give you enough explanation.

で、あの、まず、あの、今回、ま、すごく我々もこの結果についてショックなんですけども、ま、幸いなことにすごく原因ですとか、ま、どのエリア、時間帯、そういったことすごくはっきりしてるんで、少し時間かけて説明させてもらいたいと思ってますと。

Hi, Matt. This is Ben.

Certainly we were also surprised by the traffic decline. This was meaningfully beyond our expectations.

The good news is that we've been able to drill down into the time or the dayparts where we're seeing that traffic pressure, as well as the opportunities that we have to reverse it. We'd like to go through those with you now.

まずあの、エリアに関してはもう全域で、均等に、ま、Q3からQ4に比べてダウンした分は均等にダウンしてもらってると、いうふうに考えてもらって結構です。で、一方で、デイパートに関しても、これも結構大きく傾向が出てまして、具体的には平日のランチタイム、ここのトラフィックが失われてることが明らかになってます。ここまでちょっとBenお願いします。

In terms of geography, the traffic pressures that we saw in Q4 were very broad-based, really no meaningful differences between our markets. In terms of daypart, it's pretty clear that where we're losing traffic are the weekday lunches.

で、あと我々は8月に、顧客のコンシューマースタディを行ったんですけども、ま、これもブロードベースで共通してるのがやっぱり、平日の、特に平日の昼のこのバリューの部分で機会があることが分かりましたと。で、もちろんバリューは必ずしも価格だけでないんですけども、やはり消費、皆さん抑えてる中で、我々$29のアベレージチェック、このランチがアフォーダブルでなくなってきてるっていうのは理解できますし、理にかなってるなと思ってます。ま、ですからそこの部分に関して我々はこのQ4で対策を考えてました。ま、今からこの対策も含めて説明したいと思います。

In August, we performed a consumer study, and one pretty clear throughline that we saw was value is top of mind for our consumers, I imagine all consumers. While we don't think of value as simply being price, our average check is $29, and when you think about that as a lunch ticket, it's not as affordable as some of the other options, and so we've been specifically working on how to address this.

対策としましてはもちろんその該当時間のクオリティとかサービス、あとはイングレに関するストーリーテリングとか、そういったことに加えてですね、やっぱり一番我々がやるべき事っていうのは非常にお得な価格でのバリューコンボを導入することだと思って、その導入を進めてきてます。実際あの10月に3日間バリューコンボを実施しましたけども、結果としては客単価も下がらず、2アイテムで5%の売り上げを占めてやれましたので、非常にうまくいったと思ってます。これからさらにテストを広げていきたいと考えてます。

As it relates to weekday lunches, we've certainly made sure that there are no issues with the quality of service or the quality of ingredients, that we're making sure that we're doing the appropriate storytelling so that guests appreciate exactly how high quality our ingredients are. What we really landed on as the major lever for driving traffic during the weekday lunches especially, would be to provide undeniable value through value combos.

In October, we did a three-day pilot where we piloted a $9.99 option and a $10.99 option, which gave you a bowl of noodles and two hand rolls— $11,

$11.99.

I'm sorry, a $9.99 and an $11.99. For this three-day period, they were 5% of mix, and so they were a pretty big hit.

Also critically, we saw no degradation in average check size. Based off of those early results, we're very encouraged and we're in the process of implementing a larger test with more of our restaurants.

あとまあ、具体的にBenも言った、具体的には来週からテストを拡大して、その結果少し調整をした上で、ま、COGSに大きな影響が出ないように調整をした上で、Q2中に全店導入したいというふうに考えてます。

The test expansion actually begins next week. Based off of how the test goes, we'll make some adjustments to make sure that from a COGS perspective, the value combos are margin neutral, and we expect to launch this systemwide sometime in Q2.

あとはオフプレミスでも、同じ風にバリューにフォーカスしたバンドルメニューも、近い将来で導入予定なんで、ま、これは施策っていうのは、テストではリワードメンバーの中だけだったんですけど、やっぱり主に目的としては新しいゲストの取り込みなんで、こういったバリューコンボですとか、あとはオフプレミスのバンドルメニュー、それらの導入のタイミングに合わせて、新規をたくさん獲得するためにペイドアドバタイズメント、しっかりコストを使って、ソーシャルメディアに使って、新しい新規のゲストが獲得できるというふうに自信を持ってます。 We're also leading into value for off-premises as well.

We're in the process of developing some value bundles for our guests. One very interesting thing that I neglected to mention about the three-day test in October is that the advertising there was extremely minimal.

It was limited purely to rewards members, which makes that 5% mix all that much more remarkable. As we develop the value bundles for off-premises and as we begin the systemwide push for the value combos in Q2, we expect to support that with paid advertisement.

Really, the goal here is to capture first-time guests. We know that we've done a great job with activating our rewards members, but we think that this sort of $11.99 value it's pretty eye-catching, and we're very excited about what it means in terms of first-time guest capture.

色々言いましたけど、もう一回まとめさせていただくと、FY '27に関しては、強化されたIPと、パイプラインと回数も強化されてます。あとは9回から12回に増やしたKura Reserve、あとはコンシューマーインサイトに基づいた0%プライシングですとか、バリューコンボといったバリュー関連の戦略、そしてそれらを新しいゲストにリーチさせるためのマーケティング予算の増加、そういった全てにアップグレードされたマーケティング戦略によってトラフィックの改善に我々自信を持ってます。

As it relates to fiscal 2027 traffic, while Q4's performance came in below expectations, we feel that we've got a really strong lineup in terms of initiatives that will drive traffic for us in fiscal '27. Our IP pipeline is very strong.

Beyond the quality of the individual properties, we also have a record number of IPs. The LTOs that we do, the Kura Reserve, we're increasing from 9 to 12.

Those are proven traffic movers, and so we're excited about that. We think that we're pretty unique in deciding to take 0% pricing, and that should make the value delta between ourselves and everybody else that's fighting for stomach share that much clearer.

We also have value combos, this is pretty new for us to put this much effort behind a value combo and to support it with marketing. We're really excited to see just how far we can bring this.

All of this is going to be supported by incremental spending on paid social, which we're really excited about. Okay.

Understood. Thanks for all of that context.

If I could just ask one more on the IP collaborations. One of the big initiatives this year was to, as you said, improve the quality as well as increase the frequency of those collaborations, with the idea of essentially reducing quarterly same-store sales and traffic volatility.

It seems like that hasn't really worked out to the extent that you probably hoped this year. With regard to IP collab going forward, when you talk about them for 2027, are you talking about increasing the frequency of collaboration again, or going back to retool your IP platform somehow?

We have a full-year IP platform, but we're also increasing the number of IPs that we're doing. Last year we had seven, this year we have eight.

The bulk of the excitement is typically within the first month, and so having more first months gives us more comp opportunity even with a full calendar in both years.

Okay. Understood.

Thanks very much.

Thanks, Matt.

Hey, thanks for taking my questions. Appreciate it.

Ben or Jimmy, within the '27 guidance, what same-restaurant sales assumptions in that $376 to $381 revenue guidance? そう、まずアップサイドに関してはコンプセールスがゼロからスライトリーポジティブがアップサイドで、下のサイドで言うと、ネガティブなコンプセールス、この辺りを意識してます。想定してます。

Hey, Todd. For the high end of the guide, that assumes flat to slightly positive comps, whereas the low end of the guide would assume negative comps.

How deep of a negative can that buffer, Ben, and still hit the 376?

Just flat

like— だいたい1%か1.5%くらいの差があると思ってもらったらいいと思います、上限と下限で。 If

you could think of there being about a 1.5% comp spread between the high end and low end assumptions.

Great. Thank you.

That's helpful.

あとそれに付随してちょっと、今回の件ですけども、少しちょっとお伝えしておきたいのが、我々バックローディッドニューレストランになると思うんですけど、オペレーティングマンスで言っても84ヶ月で想定してますと。あとは、あともうひとつ多分皆さん、あともうひとつ我々今回からクリスマスとか感謝祭にこれクローズする分も、そういった分も細かいことですけど入れておりますと。

Just as a couple other notes, given that we're on the topic of the revenue guidance, we are meaningfully backloaded this year in terms of the unit opening pace, and so we just thought it'd be probably most useful for us to share our expectation about operating months. Currently, we expect 84 operating months from new openings in fiscal 2027.

As some other puts and takes for revenue, this will be the first year that we've decided to close for Christmas and Thanksgiving. We're happy that our team members will be able to spend time with their families, but it is two days of lost revenue.

Fair enough. When we look at Q4 and we look at that traffic number, I know you talked about IP as a program across the whole year, but in the Q4 window, did the IP partnerships perform to plan?

Was that any of the reason for just down double-digit traffic?

もちろんあの崩壊スターリア、崩壊スターレイルですとか、ペルソナ、その辺りがQ4のIPだったんですけど、セカンドマンスに入ったものもありますし、あとはちょっと期待に見合わなかったものもあると思いますし、あとはワールドカップの影響もあると思うんで、いろんなところで期待に見合わなかったっていうのが原因だと思います。

Without calling out any specific IPs for not meeting our expectations, not all of them did meet our expectations. The other factor there for Q4 was the World Cup.

One thing that really surprised us is that when the World Cup began, you could see traffic really turn on a dime, and so we expected that dynamic to reverse at the end of the World Cup, which is part of the reason for the guidance that we provided in July. What we saw in July and subsequently is that the dynamic did not reverse, which was very surprising and really the difference between our expectations and the results we reported today.

一方であの、Q1に関しては、中間選挙の最中でトラフィックにやっぱり大きくダメージ、それでもQ1、Q4と比べた時に大きな改善が見られてて、しかもしかもこれからまたYoshiのね、ギブアウェイとか始まるんで、改善が見られてることに関してはエンカレッジされてますし、本格的な我々の改善のメジャーメントっていうのはQ3、Q2の途中から、本格的にはQ3以降可能になるので、改善を見るのをすごく楽しみにしてます。

As it relates to Q1, we did see there's a lot of consumer uncertainty, especially with the midterms, but now that we're past the midterms, now that we're into the Yoshi campaign, we're feeling very encouraged. Just looking at the comps to date, it's a meaningful improvement.

We're about down -3% versus the -5.7% that we were doing in Q4, and so we're already on an upward trajectory. In terms of the full-year comps, we're expecting a meaningful step up in the back half, and so we're really excited to hit those quarters, to speak.

A final one, and then I'll jump back in if I can. You've long talked about the challenge of the Kura brand promise of communicating the value that you offer without kind of diminishing the quality positioning that people perceive for the brand, and now we've moved to a place where we're looking to more broadly promote $9.99 and $11.99 bundles.

Are you either looking at the consumer differently, that they just have such a different focus around price point-driven value now that you don't think it will diminish the perception of the brand, or just walk me through what got you over the hump to be willing to communicate value so overly? Thanks.

Just in terms of our decision to put energy behind the value combos, we wanted to meet consumers where they are. Us crowing about how high quality our ingredients are when everybody else is thinking about value, we didn't think was the right strategy.

We aren't doing deep discounting on our sushi staples. It's really just on the noodles, but what we've seen is that the average check size hasn't diminished on the days that we've done the value combos.

Our assumption presently is that the value combo is very eye-catching and it gets people in the door, but once they see all the delicious-looking sushi spinning past them, they can't help themselves. If somebody only has $12, we want Kura to be a great option, but if they can spend more, we want them to come as well.

あとは我々この2コンボでの売り上げ5%を占めたっていう、この辺の数字も、他社が同じような施策で成功した事例の数字とかなり類似してるっていうところなので、我々も同じくブランドを毀損せずにトラフィックの改善っていう両立を図るっていうことは十分可能だと思ってます。

In the intervening months since the last call, we've spent a lot of time studying our competitors' best practices as it relates to value presentation. The 5% mix that we're seeing is pretty in line with the best of class as it relates to value.

We're very encouraged there, and we don't think that it's negatively impacting the value perception or the quality perception of Kura as a whole.

Perfect. Thank you both.

Thanks, Todd.

Hi, thanks for taking the question. I just wanted to clarify on the comp, because you alluded to -3% quarter to date, but you're just dropping the price off now, correct?

With that and with Thanksgiving and Christmas closed, I presume we should expect something worse for the quarter?

アベレージチェックのこと？今んとこ現在11月ちょっと0%から始めたんですけど、特に何かアベレージチェックをドロップしてるってことはまだないです、はい。

We're only four days, five days now into November, but we haven't really seen any changes in average check, and so we're really, really pleased to see mix basically making up the price that we or not offsetting. As it relates to Thanksgiving, if we close a restaurant for a full day, we back those out of the comp days, and so that wouldn't impact our comps.

Thank you. Then the decision to slow growth a little bit, I guess I had been thinking we were kind of in that 20% plus range and it's going to be a bit less than that this year.

Can you kind of walk through the thought process? Are you seeing the unit economics hold up as expected, or are you trying to kind of be more selective in this macro environment?

I'd just be curious on the thought process. そう、もちろんこれはこのコールの中で最もクリティカルな質問になると思うんで、これもちょっと時間かけて説明させてもらいたいと思います、これについてですね。

This is the other major point that we were excited to discuss, and so we'd like to spend some time going over this.

まず、今回のこの決定に至ったところで言うと、まずひとつが我々がある程度ファーストムーバーアドバンテージっていうところの、この目標を達成できたっていうことがありますと。100店舗、25州、あとメジャーなDMA、それを全部制覇したっていうところの目的を達成しましたんで、まずこれが、少しこうモデレートするタイミングとしてはいいかなと。まず一個、それが最初の理由になります。

Sharon, just before we go into the reasons that we decided to do this, I want to head off any concerns about unit economics. We have zero complaints with the unit economics of our recent openings.

Fiscal '25, '26 have been great. The openings that we've had to date in fiscal '27 are great as well, and so really it has more to do with the maturation of Kura as a company and the competitive landscape.

Coming out of the IPO, we wanted to move very quickly, given the fragmentation of the sushi space, the lack of a dominant leader. We wanted to make sure that we were able to be the first ones to plant our flag across our key DMAs.

Today we're in 25 states, we're in every major metro, every major DMA, and we're about to close in on 100 restaurants. The impetus behind rapid growth solely for the sake of establishing that first-mover advantage is much less of a consideration at this point.

あとま、二つ目、これこれが一番大きいものなんですけど、このストラテジックなチェンジによって、フリーキャッシュフローの達成が、次の資金調達ですとか、あとは関税のね、リフト、これにも依存せずに達成が見込めるということですと。前回$85で調達してます、その際に最後になるというふうにインディケートしたんですけど、今の過小評価された株価で次の資金調達を実施するっていうのは、あとそっからさらにダイリューションやるっていうのは全員のインタレストにならないんで、今回今残ってるお金をうまく使って、収益性の改善と成長両方維持させながらフリーキャッシュフローを実現するっていうのが全てのステークホルダーに関してベストだというふうに我々は考えてます。 Then

in terms of really the driving positive reason for us pursuing this strategy is our desire to generate free cash flow and become self-funding. This strategic moderation of our growth rate, this allows us to achieve that free cash flow assuming no benefit from a tariff relief.

When we think about our last capital raise, we assumed that it was going to be the last one. It was at $85.

Certainly, we have no appetite to do a cash raise at these share prices. We think it would be a disservice to our investors, and we think that the stability of self-funding and the lack of need for a further capital raise are really the two things that I think our investor base would best appreciate, and so that's the driving force there.

あともうユニットレベルのところなんですけど、ちょっと少しずれますけど、ペースで言うと、実際もうパシフィックにお話ししますと、今期17店舗ですけど、その後ひとつずつ数字が増えていく、しばらくと。ま、それくらいイメージしてます。そっからま、増減するかもしれませんけど、今のところそれくらいでモデルしてます、我々は。 Then

in terms of the growth rate adjustment, we've gone from the historical 20%. This year we're still doing 18%, and so I really wouldn't call it much of a deceleration at all, especially given that we're increasing the number of absolute units.

We expect to continue to do that in our forward years. The likeliest cadence would be something along the lines of 17, 18, 19, etc., although there might be some puts and takes in a given year.

Thank you.

Thanks, Sharon.

Great, appreciate you guys taking my questions. I jumped late, sorry if it's been covered a little bit, but just exploring the value conversation a little bit more, I just want to clarify, is it due to you guys kind of not seeing the trade-down from more expensive mom-and-pop customers that you maybe would have expected in this environment, and at the same time, maybe your more value-sensitive or low-income cohort has kind of reduced their frequency, and so you haven't replenished that bucket, per se, and that's why you want to be a little bit more aggressive with some of this messaging?

Is that part of it, or can you just kind of comment on that?

あ、これは素晴らしい質問だと思います。これ両方が起こってると思ってます。我々のこのプライスミックスがここ最近劇的に改善してる理由っていうのは、おそらく他のインディレストランからこう我々からお客さんをとって、そのお客さんたちが我々のバリューに気づいて安いってことで使ってると、いうことが起因してると思います。ただ一方で今おっしゃったように、平日のね、特に平日の$29っていうのはちょっと厳しいてことで、他のファストカジュアルとか流れてるお客さんもいて、今のところそれが大きくなってるって事なんで、その部分、トレードダウンしてるところをキープしながら、逃げて行ったお客さんをさらにこう勝ち取る、もしくは新しいオーディエンスをとる、この両立をさせるっていうのが我々の今回の戦略となりますと。

Hey, J.P., this is Ben. In terms of trade-down, we think that we are capturing a lot of trade-down, and the best demonstration would be the mix improvement, which is just consistently accelerated quarter after quarter.

It doesn't really make sense unless we're capturing a new guest cohort that's accustomed to much higher sushi prices. We think we're doing a really good job of capturing the trade-down.

That being said, our traffic opportunity is weekday lunches, and $29 as an average check for a weekday lunch it is certainly on the higher end, and so we just want to be more competitive for that daypart. That's what's really driving the $9.99, $11.99 offerings.

That's helpful. Then just as we think about that restaurant-level margin guide for next year, understanding that there's flat comps kind of baked in somewhere in around the midpoint of the sales guide, can you just bridge what gets you to that restaurant-level margin for next year?

Then, we've talked about kind of hitting that 20% target in the past, but just kind of any puts and takes that would get you from that 19 back up to 20 beyond next year?

まず大きなところで言うと、COGSに関しては、ま、18から19のギャップのところですけども、COGSに関しては少し、今回プライシングしないこととか、バリューコンボ関係で少しだけこうアップすることを予想してるんですけど、そのアップっていうのはアザーコストラインのいくつかのイニシアチブによってオフセットされるというふうに見込んでます。まずちょっとここまでBenお願いします。

We're going to walk you through the line items. Starting with COGS, we expect that to be slightly up as a result of not taking price, but we believe that it's going to be offset by reductions in our other costs, they should net out to be neutral.

なので、でも100ベーシスポイントのインプルーブメントには主に、レイバーコストから来ると思ってます。我々は190ベーシスポイントの改善を'26で見せたんですけど、さらなる100ベーシスポイントの改善を'27で目指してますと。これがちょっとさらに説明していきます。

The bridge from 18% to 19% is really coming from labor improvement. We were able to do 190 basis points of leverage in fiscal '26, and we expect an additional 100 basis points of labor improvement in fiscal 2027.

まずあの、レイバーのインフレーションっていうのもすごく、もうほとんどミニマムウェイトだけの状態に今なってまして、フルイヤーベースで言うと15ベーシスポイントぐらいなんで、それっていうのはHRがいい仕事をしてくれて、ワーカーズコンプ、これのリニューアルでオフセットされるというふうに思ってます。

Looking at labor inflation, it's become extremely stable. Really, the only labor increases that we're expecting would be the statutory minimum wage increases on January 1st, which translates to an impact of about 15 15 basis points on a full-year basis, but our HR team has done a phenomenal job, and by renegotiating some of our workers' comp rates, we'd expect that to be offset.

その上で我々Q1は-3%の進捗とお話ししましたけど、その-3%の進捗で、今現在70、80ベーシスポイントの改善を、今このクオーターで昨年比と比べてなってるんで、先ほど話したように、Q3、Q4からコンプが上がってくることを想定した時に、我々フルイヤーベースで100ベーシスポイントというのは現実可能だと思ってます。

To give you some additional context on the quarter to date, quarter to date we're doing about 70, 80 basis points better on labor than we did last year, and this is with a -3% comp. When you contemplate the back half of the year when we reach the easier comparisons and we expect comp acceleration, 100 basis points of leverage we think is extremely reasonable.

これが今期の19%のところのブリッジになりますと。

This would be the bridge to the 19% for fiscal 2027.

で、そこからさらに100ベーシスポイントっていうのは、ディッシュウォッシャーが今期でフルでロールアウトされるのと、あとはニューレストランでベイクドインされていきますんで、'28からは実質フルに効果が出ると言うところで、この辺りでだいたい30ベーシスポイントぐらいさらにアディショナルな改善を見込んでます。

As it relates to the dishwashers, given that we're still in the implementation process, we expect complete full rollout in fiscal 2027, meaning that fiscal 2028 will be the first year that we have the full-year benefit, and we would expect a 30 basis point improvement from the full-year benefit versus fiscal 2027.

あとは同じことが、ビッくらポントイのアップグレードに含まれますと。このトイのトイのボリュームのリダクションっていうのは実質ほぼ来年の1月くらいからなんですけど、これもフルベネフィット来期受けますし、あとはいくつかこうPMとかスモールツールとかユーティリティ、この辺りでいくつかスペシフィックなもうメジャーメントやってるんで、これら全部でさらに少なくとも20ベーシスポイントは'27と比べて改善できると思ってます。 Then

with the savings from the Bikkura Pon dessert coupon options, we would expect once we're able to implement this in full and be able to adjust our Bikkura Pon prize order volumes based off of the demand that we're seeing from guests, we would expect that to be about a 20 basis point savings. We're also implementing all these different PM projects, improvements in our repair and maintenance approach, savings on small tools, utilities, which would be another 20 basis points of savings in the other cost line.

で、残りの50ベーシスポイントにはやはりコンプセールスが2%ぐらいはこう改善することが必要になってくると思ってますけども、しっかりとコンプセールスを達成できるようにして、20%に、少なくともキャッシュフローの残る段階にして、ポジティブキャッシュフローを目指せるようにしていきたいなと考えてます。

For the remaining 50 basis points, this would be coming from better sales leverage on positive comps, and so that's one of the reasons that we're really going full bore, full force behind all of our traffic initiatives this year. Our overwhelming goal is to be able to wisely spend our cash runway and to get to free cash flow by fiscal 20 2031,

fiscal '31. We think— 最後強調したいのが、これ関税リフトなしですから。

The one thing that we really want to emphasize here is that none of this contemplates relief from tariffs. That, we would say, is conservative at this point.

Should that come, that would accelerate the timeline meaningfully, and so we think that we've got a pretty bright future.

Great, appreciate the color and best of luck, guys.

Thanks, J.P. Thank you, J.P.

This is Will on for Jeremy. I also joined a little late, apologies if this has been hit on, but it sounds like comp trends have modestly improved here quarter to date.

I guess can you help break that out by traffic and check, and then maybe remind us what sort of lap you're facing here in November, and then what sort of lift you're anticipating from the Yoshi IP?

まず、あの、ミックスがですね、Q4とQ1に比べたらミックスが改善されて、トラフィックはほぼ同じ同じレベルぐらいと。それが改善の理由という事です。

In terms of the quarter-to-date improvement, that's really coming from mix. Traffic has been pretty much steady state since Q4.

逆に言うと、このトラフィックのところが改善されたら、凄くコンプの影響が大きいという事で我々はエキサイトしてます。 If we're able to improve traffic, even if we were able to just get it to flat, that would put us in an incredible comp position, and so that's really what we're putting all of our efforts behind.

あとは何だっけ？ Oh, and our expectations for the Yoshi campaign?

We expect it to be as strong as Kirby.

けども、残念ながらやっぱりミッド、ミッドエレクションが凄く注目されてて、やっぱそれは影響したんで、実際我々Yoshiの効果をしっかり測るっていうのはもう本当、昨日の売り上げからですんで、ちょっとまだ言及するのは早いかなと思ってます。期待感は言えますけど。

That being said, while our expectations for Yoshi are very high, we think everybody was pretty much holding their wallets until the midterm election results came out, and we're excited to see the full potential of Yoshi play out in the coming months.

That's helpful. Thank you.

Then just wanted to touch on some of the cannibalization impact you'd expect for the year, and if there's anything new to note in terms of new versus infill mix for the 17 openings now expected in '27?

まず、今年に関しては、45、55。45がイグジスティングで、ニューが55になってるんですけども、すでに'26でオープンしたところのカニバリゼーションインパクトがあるんで、結論から言うと'26のカニバリゼーションインパクト大体2%。で、'27は少しベターになりますと。というのも先ほど言ったみたいに、実際この50/50に近いスプレッドになることのベネフィットというのは後半に限定されるからですと。

In terms of the pipeline we have for fiscal 2027, it would be 45% existing markets, 55% new markets, but the comp tailwind benefit that we expect from this pipeline mix really comes in the back half of fiscal 2027 and into fiscal 2028, just given that for cannibalization happening in fiscal '26, that or fiscal 2027, that would really be determined by our fiscal 2026 openings. A couple ones come to mind in particular, the infills of San Diego and Boston, which are two of our top-performing units, previously single-unit markets, were infilled in the back half of fiscal 2026, and so those pressures we don't expect any change there until we lap it, which would be in the back half of fiscal 2027.

Fiscal 2028 would see continued improvement on the cannibalization headwind front.

2%だっけ？2%とか。

I'm not sure if I mentioned it, but the cannibalization we experienced in fiscal 2026 was 2%, and we expect a steady deceleration in comp headwinds as we progress through fiscal 2027 and '28.

Super helpful. Thanks for taking the questions.

Thank you.

Of course.