Kura Sushi USA, Inc. (NASDAQ:KRUS) Q2 2023 Earnings Call Transcript

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Benjamin Porten: Yes. We’ve started that process. We’ve started to work with Cisco a little bit. We’re testing some of the deliveries in some markets. That’s something that we’re just not going to flip the switch on because it’s getting the products in at the right time efficiently and effectively is so important that we have to take this slowly and make sure that we’re completely dialed in before we flip the switch to the whole company. We do have some initiatives that are coming up. We’ve got shrimp and salmon that we have been able to purchase at a much more favorable price that’ll be coming in, in May and June. So that’s upcoming. I think we’ve talked about that in the past. But that’s an exciting development. And one thing that I’m really excited about too is it’ll be much easier for us to forecast where we’re going to be in terms of COGS.

Because in the past, we’ve kind of been riding the market and the markups were kind of around €“ across the board. And once we get everything into more of a broadline system, we’ll be able to know exactly what the market is, exactly what we’re paying, and we’ll be much €“ in a much better place in terms of forecasting. Not to mention our actual results going forward should be better as well. So it’s in the process, but we’re taking slowly to make sure that we’re really dialed in before we roll it out system wide.

George Kelly: So if I were to just attempt to repeat what you just said, is this something that you’re still kind of assessing and uncertain as to whether you’ll kind of roll it out across the base? Or would you expect this to be something that you fully implement by maybe the start of next fiscal year?

Benjamin Porten: I believe by the start of next fiscal year, it will be implemented. And this is something we are doing. We’re just taking it slowly to make sure it’s being done properly.

George Kelly: Okay. Understood. Thanks. And then second question for me, just curious, if you are contemplating taking additional pricing this year. And then another question, is just the timing of the DC Comics partner, when is in July and August or if you could specify that? And that’s all I had. Thank you.

Jimmy Uba:

Benjamin Porten: We have no specific plans at this point, but there are a couple of things that are useful to consider. One would be that we’re going to be lapping 6% price in July. We’ll no longer have that benefit. We are still seeing that, that 10% labor inflation that Jimmy had mentioned, and there are typically minimum wage increases in July in our €“ especially in our Los Angeles markets. And while COGS inflation is easing, we are seeing ongoing inflation in non-COGS expenses. And so while we have no current plans, we’re going to be flexible in terms of making sure that we’re able to make the best decision possible for that point in time. What we’d like to reiterate is that this €“ whatever pricing we take would not be a margin driver. That’s not why we take price. It would be purely to offset increased costs.

Jimmy Uba:

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