Kura Sushi USA (NASDAQ:KRUS) executives said they have seen positive momentum in sales trends carry into calendar 2026, helped by a combination of intellectual property (IP) collaborations, easier year-over-year comparisons, and operational initiatives such as changes to its reservation system and labor structure.
The comments were made during a Roth event featuring CEO Hajime Uba, CFO Jeff Uttz, and SVP of IR & System Development Benjamin Porten. Management also discussed pricing strategy, unit growth expectations, tariff-related cost considerations, and longer-term margin opportunities.
Sales trends: momentum into 2026
Management declined to provide specific figures ahead of its next earnings release, which executives said is expected in the first week of April, but said they are “very pleased” with progress toward previously stated full-year targets. Those targets include:
- Flat to positive comparable sales
- 18% restaurant-level operating profit margins
- 100 basis points of labor improvement year-over-year
Executives also said the traffic improvement has been broad-based geographically, with differences largely attributed to the timing of market infill rather than a single standout region.
Promotions and IP collaborations remain a key lever
Management said IP collaborations have been an important factor in improved performance, while also arguing that results are not solely driven by promotions. Executives pointed to a “clean counterfactual” where a two-week gap in promotional giveaway items—caused by an inspection delay for a prize tied to its Bikkura Pon program—still produced strong performance.
Uttz noted that last year included a five-month period without IP collaborations from December through the end of April, while this year’s schedule was “fully slotted,” making comparisons easier. The company highlighted Kirby as what it viewed as its strongest collaboration of the year in December and January, followed by what management described as an “unexpectedly strong performance” with Sanrio.
Executives also said execution has improved over time, and that strong collaboration results can lead to repeat partnerships. Uttz cited Nintendo as an example, saying Kura progressed from Pikmin to Kirby based on performance and that he would be “very shocked” if Kirby were the company’s last collaboration with Nintendo.
Pricing approach: targeting modest increases and protecting value
On pricing, management said Kura’s typical annual price increases are about 1% to 2%, and that the company does not expect to maintain its current pricing pace into the upcoming fiscal year. Uttz said the company is currently running about 4.5% price, but emphasized the goal of keeping up with CPI while maintaining its value proposition.
Executives described a more targeted approach to price adjustments using guest survey data. The company added a question about value perception to its post-meal survey, then used several months of responses to identify restaurants with stronger value perception where it felt it had more pricing power. Kura largely avoided raising prices on appetizers and sides, focusing increases on the uniform-priced sushi plates that run on its revolving belt. Uttz said the November 1, 2025 adjustment produced a blended increase of 3.5%, and noted that about 1% will “fall off” as the company laps that pricing in June.
Management also described a competitive dynamic that could support traffic. Executives said Kura’s roughly $1 per-person increase is modest compared with inflation pressures faced by local “mom-and-pop” sushi restaurants, which may be encountering price resistance. Kura said it views itself as priced at about half of typical suburban mom-and-pop sushi restaurants, offering an example where salmon nigiri might be $8-$9 elsewhere versus about $4 at Kura for two pieces.
Unit growth, prototypes, and capital position
Management said it remains comfortable with its stated 20% unit growth target “for the foreseeable future,” adding that the main reason to reevaluate would be if new units stopped meeting expectations. Executives described fiscal 2025 as one of the company’s strongest years in recent memory and said fiscal 2026 has been “just as strong,” supporting confidence in the growth outlook.
While executives said the current model is working well, they described some flexibility in restaurant size, ranging from about 1,600 square feet to nearly 7,000 square feet. Management also said it is contemplating a two-lane restaurant configuration (versus the typical three-lane layout) that could open up smaller markets. Separately, the company said smaller units in heavily trafficked metropolitan areas can be among the strongest in the system on sales per square foot and cash-on-cash returns, and indicated interest in pursuing more of those opportunities.
On the balance sheet, Uttz said the company filed a $100 million shelf registration at the end of December and has not set a timeline for raising capital. With roughly $75 million of cash as of the last reported quarter, management said it believes it has approximately a year-and-a-half to two years of runway, allowing it to be selective based on market conditions, share price, and other external factors.
Tariffs, margins, labor changes, and technology
Asked about tariff impacts, management said that after the tariff ruling and subsequent changes to global tariffs, the offset was “not as much as we would like.” However, executives said they negotiated supplier reductions both several months ago and again in the last four to six weeks, including a meeting led by Uba. Based on those actions, management said it still expects to be on track with its guidance for cost of goods sold at approximately 30% for the year.
Looking longer term, management said it feels good about returning to 20% restaurant-level operating profit margins even without tariff relief, and said it is planning the business accordingly. Drivers cited included improved comparable sales leverage if comps return to low- to mid-single digits, and labor efficiencies from robotic dishwashers and staffing changes.
Executives said robotic dishwashers are starting to come online in fiscal 2026, with a larger benefit expected in fiscal 2027. Management estimated the dishwasher impact at about 50 basis points. The company also discussed changes to managerial staffing, reducing from four managers per store (one general manager and three assistants) to three managers as market density increases, calling it a meaningful labor improvement. Management said the shift is “largely” completed and supports its goal of at least 100 basis points of labor improvement, adding that 100 basis points “might be conservative.”
For fiscal 2027, executives also pointed to a development pipeline expected to be “50/50 new and existing markets,” which management said could reduce cannibalization headwinds that have been around 300 to 400 basis points (with about 300 basis points cited as current).
On systems, management said its operational and financial tools are integrated through interfaces, providing daily data to restaurant operators and real-time access to sales and labor data for decision-making. The company said it does not currently run a full ERP system, but may consider one in the next two to three years.
In closing remarks, management said it defines value as “experience divided by price,” and reiterated confidence in the guest experience and product quality relative to higher-priced alternatives.
About Kura Sushi USA (NASDAQ:KRUS)
Kura Sushi USA, Inc operates Japanese‐style revolving sushi restaurants across the United States. The company’s concept centers on delivering a modern sushi dining experience by combining fresh ingredients with automated conveyer belt and plate‐return systems. Guests can choose from a broad menu that includes nigiri, sashimi, maki rolls, tempura, udon noodles and chef‐inspired seasonal dishes, all served directly from the conveyor belt or ordered on tabletop touchscreens.
Each restaurant integrates patented technology to ensure food quality and operational efficiency.
