Kura Sushi USA, Inc. (NASDAQ:KRUS) Q1 2023 Earnings Call Transcript

Jimmy Uba: In the past earnings call, we mentioned that our hourly — for our hourly positions, we are about 95% filled. I’d say that today, we’re at 95% to 100% at all of our restaurants. We’re in an extremely good position. We’re not seeing any quarantining. Not net — no quarantining that’s impacting operations. Last year during the time, we had seating limits or shortened hours. It’s certainly not the case now. We’re exceptionally happy with the staffing situation. And we’re very proud of the work that’s being done by our recruiting team, our ops team training, HR. And just on that note about staffing, I know that there’s — the FAST Act is probably top of mind for a lot of people on this call, especially because we have — California is our largest market.

I just want to reassure everybody that’s listening that as the legislation is written, it does not impact us. We’re — it simply does not apply to us. I’ve heard some people say that look, if everybody’s wages are going up, then your wages are going to go up, too, whether or not your impact — whether or not you’re legally falling under that category. And to that, I’d say, if that were the case, then you wouldn’t have any people working in, say, Texas or New Jersey for $2.13 as a server because they can get a guaranteed $8 elsewhere, people clearly go for the server positions because they’re very lucrative with tips. And with our tips, we’re one of the best paying employers in the sector. And so the FAST Act for us it’s not a concern, I think it makes us more competitive, if anything.

And then in past calls, we’ve mentioned how the management pipeline is one of our key considerations in terms of our unit growth rate. We’re happy to say that the management pipeline is exceptionally strong. The opening delays that we’ve seen to date are because of permitting issues or inspections. They’re certainly not because we don’t have management. And in fact, those delays have allowed our management trainees to get that much more training, and so we have a very strong class for this year and next. We’re — it’s not a concern for us, and so that’s certainly not a gating factor for continued aggressive growth.

George Kelly: Okay. Understood. Thank you.

Operator: There are no further questions in our queue. This does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.