Participants

Benjamin Porten; SVP, IR & Business Development; Kura Sushi USA Inc

Hajime Uba; Chairman of the Board, President, Chief Executive Officer; Kura Sushi USA Inc

Jeffrey Uttz; Chief Financial Officer; Kura Sushi USA Inc

Andrew Charles; Analyst; TD Cowen

Jeffrey Bernstein; Analyst; Barclays Inc

Jeremy Hamblin; Analyst; Craig-Hallum

Matthew Curtis; Analyst; William Blair

Mark Smith; Analyst; Lake Street Capital

John-Paul Wollam; Analyst; ROTH Capital Partners

Todd Brooks; Analyst; Benchmark Company

Jim Sanderson; Analyst; Northcoast Research

Presentation

Operator

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Kura Sushi Fiscal second quarter 2025 earnings conference call. (Operator Instructions) Please note that this call is being recorded. On the call today, we have Hajime Jimmy Uba, President and Chief Executive Officer; Jeffrey Uttz, Chief Financial Officer; and Benjamin Porten, Senior Vice President of Investor Relations and System Development.
And now I'd like to turn the call over to Mr. Porten. Thank you. You may begin.

Benjamin Porten

Thank you, operator. Good afternoon, everyone, and thank you all for joining. By now, everyone should have access to our fiscal second quarter 2025 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 discussion 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 --
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 or as a substitute for results prepared -- 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.

Hajime Uba

Thanks, Ben, and thank you to everyone for joining us today. We had a very productive second quarter, making headway on the new market opportunities represented by our success in takeoff bidding out our IP pipeline and beginning testing a rollout of several system projects that have long been in development. New restaurant openings are growing exceptionally similarly with 11 units opened to date and another six under construction. -- increment [weather] was unexpected to see pressure.
We are pleased overall this quarter due to the greater progress we made across our initiatives. Total sales for the fiscal second quarter was $64.9 million representing comparable sales growth of negative 5.3% with price and the mix of 3.3%, offset by negative traffic of 8.5%. We knew coming into the quarter that Q2 will be the most difficult comparison of the year due to the lapping of last year's successful Peanuts IP campaign without of IP collaboration at the current Q2. This was compounded by the unexpected weather impact we experienced in January and February with -- followed -- in Southern California and [cold waves] across many of our other markets.
Cumulatively, we estimate that Q2 weather represented a compelling of 400 to 500 basis points. Cost of goods sold as a percentage of sales included by 90 basis points over the prior year quarter due to pricing and supply chain initiatives. Labor as a percentage of sales increased by 180 basis points due to sales deleverage caused by weather and year-over-year labor inflation.
Restaurant level operating profit margin was 17.3%, an as compared to 19.6% in the prior year due to the previously mentioned sales deleverage. Restaurant openings are proceeding smoothly with three new unit openings during the second quarter -- subsequent to quarter end, we opened the units in Scottsdale, Arizona and lean with Washington state.
We are very pleased with the performance of this year's openings and believe fiscal has a potential to be one of our strongest [prices]. In our last call, we had the -- the success we've seen with our -- California Restaurant opening and put in the two levels up. Bakersfield is performing just as well as when we last spoke.
As a reminder, up until Bakersfield, we are only opened reference in the top 40 or 50 units. The Bakerfield is significant for us because it represents the -- largest DMA in the United States, causing us to devaluate our previous consolidation for why we constitute a viable market.
[Decent] visit to markets like [Farming Ham], Talpa, Boise and Oklahoma City, have all supported our early enthusiasm. Along with the greater -- potential, these markets are especially exciting to us as new markets have no impact on cancelizations which we estimate to be approximately 4% compared with the current and prior history. With the -- that development team is making, we believe that we will be able to return to a 50-50 split of new and existing markets by fiscal '20, which we believe is -- comp tailwind.
While the lack of IT collaboration in the prior quarter made for what we believe to be the most difficult year-over-year comparison in fiscal '25. This posed allowed us to focus our efforts on building a great pipeline, and I'm extremely pleased to say that in fiscal '26, we will not have any gaps between IP collaboration campaigns and expect to have seven or eight collaborations, which will be a record for us.
We will also have been developing our full focus on marketing muscles over the course of this fiscal year we are very much looking forward to seeing the combined impact of these campaigns and [IP] collaborations signing in May.
Lastly, I would like to touch on the progress we've made in system development. The -- of our new order panel software is proceeding smoothly, and we expect to roll out within the fiscal year. This new auto partner software is supplemented by ad designed push to --, which is much more intuitive than the current model.
This design is meaningful as our sales spend several mines explaining how the automatic model works when we're seeking first-time guests. The new -- software includes an optional introduction video for faster than guests, which in conjunction with the updated -- eliminates the need for our servers go through the interest explanation, which we expect will reduce from a house growth.
To coincide with our upcoming IT collaborations, we are loading out improvements to our [speakerphone] system as well. Guests will soon be able to on the second price capital after eating 25 [grades] instead of the current --. Considering our average party sizes and platform --, we believe that 25 -- is a more realistic -- than 30 plates --. This has the potential to rate growth while also improving guest satisfaction, especially families is turn. Finally, I would like to share our progress on what we are most excited about the reservation system.
We began testing in February and have since expanded into three restaurants including solid testing at one of our highest volume resets. The reservation feature has been very well received by guests and its system-wide rollout is now one of our top priorities due to its potential as a traffic driver.
With the old waters program, if you have fixed plants like going to see moving, Kura is off the table. Because you can't predict how long the line will be or when you [after fitting] will be. So by giving guest control through reservation --, our hope is to open up new occasions for guests to visit Kura.
Additionally, historical -- rates for Kura, Kura Guest in dine are between 20% to 25%. And so the ability to capture these guests represents a meaningful opportunity. While it's too early for us to provide any quantitative commentary, shoulder period of sales did increase with the implementation of the reservation system in curate panes. Lastly, reservations are access through the Reward program, and we are excited to see what the rollout that for members --. As you can see, we've been very hard at work.
Many of these efforts have been long in development, and it's been late to see so many projects to be approved one after another. I'm deeply grateful for the combined efforts of all of our team members for making this possible. Thank you, everyone. Jeff, I'll hand it over to you to discuss our financial results and liquidity.

Jeffrey Uttz

Thank you, Jimmy. For the second quarter, total sales were $64.9 million as compared to $57.3 million in the prior year period. Comparable restaurant sales performance compared to the prior year period was negative 5.3%, with regional comps of negative 1.5% in our West Coast market and negative 8% in our Southwest market.
Turning now to costs. Food and beverage costs as a percentage of sales were 28.7% compared to 29.6% in the prior year quarter, largely due to pricing and supply chain initiatives. Labor and related costs as a percentage of sales were 34.8% as compared to 33% in the prior year quarter. This increase was largely due to wage increases and sales deleverage. Occupancy and related expenses as a percentage of sales were 7.9% compared to the prior year quarter, 6.9% due to sales deleverage.
Depreciation and amortization expenses as a percentage of sales were 5.1% and as compared to the prior year quarter's 4.7%.
Other costs as a percentage of sales were 13.5% as compared to the prior year quarter's 14.3%, largely due to lower marketing travel and recruiting costs. General and administrative expenses as a percentage of sales were 16.9% as compared to 14.3% in the prior year quarter due to a $2.1 million litigation settlement expense. Operating loss was $4.6 million compared to an operating loss of $1.7 million in the prior year quarter due to sales deleverage and litigation costs.
Income tax expense was $38,000 compared to $50,000 in the prior year quarter. Net loss was $3.8 million or a negative $0.31 per share compared to a net loss of $1 million or a negative $0.09 per share in the prior year quarter. Adjusted net loss was $1.7 million or negative $0.14 per share compared to adjusted net loss of $1 million or negative $0.09 per share in the prior year quarter.
Restaurant-level operating profit as a percentage of sales was 17.3% compared to 19.6% in the prior year quarter, largely due to sales deleverage. Adjusted EBITDA was $2.7 million as compared to $2.9 million in the prior year quarter.
Turning now to our cash and liquidity. At the end of the fiscal second quarter, we had $85.2 million in cash and cash equivalents and no debt. And then lastly, I'd like to reiterate our guidance for fiscal year 2025. We expect total sales to be between $275 million and $279 million. We expect to open 14 units, maintaining an annual unit growth rate above 20% and with average net capital expenditures per unit of approximately $2.5 million, and we expect general and administrative expenses as a percentage of sales to be approximately 13.5%.
And with all that, I'll now turn it back over to Jimmy.

Hajime Uba

Thanks, Jeff. This concludes our prepared remarks. We are now happy to answer any questions you have. Operator, please open the line for questions. As a reminder, during the Q&A session, I may answer in Japanese before my response is translated into English.

Question and Answer Session

Operator

(Operator Instructions) Andrew Charles, TD Cowen.

Andrew Charles

Great. I wanted to ask just about the performance of the quarter. I think you talked about 400 to 500 basis points of inclement weather and wildfire impact. I mean, did you see that improve from -- the trend improved from January through February. And if you're able to speak about kind of if that trend has further improved kind of the March and quarter-to-date time frame as well.

Hajime Uba

Thank you, Andrew, for your first question. -- (interpreted) Speaking to post weather, so starting in March, performance has been very smooth. We were very pleased with it. Things have things are a little uncertain now with the tariff announcements. But up until then, we had remarkably smooth performance. In terms of the monthly cadence, January, we had the wildfires.
But February, we had flooding and so we didn't see any easing from January to February. And then beyond California, both in January and from reserves, there were a lot of cold waves that impacted Texas and our Northeast restaurants. And so there was pretty meaningful weather pressure across both January and February.

Andrew Charles

Okay. That's helpful. And then, Jeff, I wanted to ask about the margins. In the last call, you talked about 20% restaurant level operating profit margin could be achievable in '25 as well as labor leverage. Is that still on the table?

Hajime Uba

(interpreted) In terms of the 20% margins through March, we were very, very confident we'd be able to maintain that 20% margin for the full year. That being said, we are -- we're seeing a lot more uncertainty with the tariffs. And so we have less visibility on it to that 20%, but that absolutely rains our goal.
We came into that you're expecting lower labor inflation of REX than what we've actually seen. Our expectation was low to mid-single digits. What we've seen to date is high single digits. If we see no impact the tariffs has no impact on consumer confidence, and there's no change in behavior, then we remain confident that labor would largely gain line year-over-year. Now with the uncertainty levering year-over-year, it's a bigger hurdle.
That being said, we do have a lot of levers that are unique for ourselves, mainly through our tech initiatives, whether it would be our new Mr. Fresh or touch paddles or greater sales efforts to increase traffic from the reservation system.

Operator

Jeffrey Bernstein, Barclays.

Jeffrey Bernstein

Great. First question is just on the broader consumer. I know at ICR in mid-January, you talked about the consumer being in a much better place. And I know you mentioned just now that the weather was a 400 to 500 basis point headwind.
I'm just wondering whether there's any concern that maybe what appears to be in part weather is actually the masking of maybe an underlying slowdown in the consumer spending. It sounds like you don't believe that was the case through March, but maybe something has changed in April. So just trying to get a sense or how to gauge your confidence that you're really up until most recently, haven't seen any change in consumer behavior when others seem to be talking about perhaps a slowing consumer spending environment. Just wondering what metrics you look at, just to give you that level of confidence? And then I had one follow-up.

Hajime Uba

(interpreted) Looking to Q2, beyond the weather, we were also lapping peanuts out an IT campaign. And so we knew that it was going to be the toughest comparison, and we don't interpret it as a slowdown of the consumer or our consumer whatsoever, especially given the performance that we saw in March, now that we're in April post the tariff announcements, I mean people's retirement accounts are being impacted with the stock market taking a hit.
And so if there's just generally more uncertainty, and that would be the biggest reason that we didn't raise guidance for this quarter. But we don't think [it affected us].

Jeffrey Bernstein

And then just to follow up, you mentioned the tariffs, it seems like you're referring to it in regards to consumer headwind, seemingly having pressure on markets and consumer confidence. Just wondering as you think about it from a cost side of things, I know in the past, when I asked you talked about how you have somewhat supply chain, geographical diversity and your ability to pivot.
I'm just wondering how you think about your specific supply chain seemingly some products could potentially be coming from overseas. So just wondering how you think about the tariff implications on your actual cost out of the business.

Jeffrey Uttz

Yes, Jeff, it's Jeff. So everybody has been doing it. We've been using the last several days kind of scrambling to figure out what the implementation of these tariffs are going to have and what impact it's going to have on our business. And the answer really the right answer right now is that we really don't know yet as we haven't had a chance to meet with our main suppliers and really figure out or determine how much of these tariffs they're going to be passing along to us.
And on a pretty encouraging note, even though we haven't had in-depth conversations with them, a couple of our top suppliers have already given us preliminary indication that they would be willing to share the impact of these tariffs with us. to some extent. But like I said, it's only been about a week. So we haven't been able to sit down with them to determine what that looks like. In terms of our overseas purchases, we know that when we look at our top purchases, as it relates to overseas, Japan is one of the top countries of origin and our supply chain.
And something that's very encouraging to us is we also know that the Prime Minister of Japan has expressed is willing to come over and meet the President Trump to negotiate these tariffs. And we're hopeful that, that's when to happen sometime in the near future.
And Also, to a lesser extent, we purchased from Vietnam. And when the birds news came out, I think Vietnam was one of the very first countries to come out and say that they were interested in negotiating. So a couple of the countries that we do purchase from overseas seem very willing to come to the table.
So the negative news of the tariffs coming out, we have received a few positive bits of information as it relates to our suppliers that we hope that once we get these lines up will mitigate the impact to our company in the future.

Jeffrey Bernstein

Understood. That's very helpful. And just to clarify, I think you mentioned if not for April or the April uncertainty has led you to keep your sales guidance as years rather than raising it, which is encouraging. I'm just wondering that therefore mean you still kind of reiterate your expectation for positive comps for full year '25, barring any significant change in consumer behavior?

Hajime Uba

(interpreted) So Jeff, I think the keyword is you kind of said it barring any major changes in consumer behavior. If there are no changes in consumer behavior, absolutely, we remain confident that we can those positive comps for the full year. We've got a lot to look forward to. You've got strong IPs lined up from March -- from May onwards through the end of the year. We have sales tailwinds coming online with the reservation system.
And so if there is no change to consumer behavior then certainly, we expect to be able to maintain positive -- to achieve positive comps for the year, but that is far from a certainty at this point in terms of whether or not consumers are going to change their behavior. And so we are not upgrading guidance at this point.

Jeffrey Bernstein

Thank you.

Operator

Jeremy Hamblin, Craig-Hallum.

Jeremy Hamblin

I wanted to come back to the -- clarify the food basket and sourcing. Of your total food basket what portion is domestically sourced or kind of the range that's domestically sourced versus sourced overseas.

Jeffrey Uttz

So we haven't given -- stated those numbers yet, but I will tell you, Jeremy, that one of your colleagues sell-side analysts on this call but had a report a couple of days ago that estimated him. And I will say that he's in the ballpark, if you take a look at that.

Jeremy Hamblin

Okay. And then I wanted to come back to the comments on wage pressure and just get an understanding of the commentary about high single-digit wage pressure. Is that being driven by California or other geographies. Given that you're lapping FAST Act here it's a bit of a surprise that the pressure is quite that high. Now certainly, the employment dynamic may change.
There may be more labor supply here. in coming months, but wanted to see if you could provide a bit more color.

Hajime Uba

(interpreted) Yes. This is not a California issue or anything related to the FAST Act. This is something that we're seeing across markets, whether it's because of statutory minimum wages. We're seeing some come online as of July 1 as well, which was not the case in past years. And then just being competitive for the market.
So this is in the California industry. We think it's always important to invest in our team to make sure that we have best-in-class people representing ourselves at the restaurants. At the same time, we push ourselves as much as possible to work on these system initiatives so that we can sort man hours at a minimum.

Jeremy Hamblin

Got it. And then lastly, I just want to come back to the cadence of new unit openings. So you've opened 11 year-to-date. I think you have another or maybe in the pipeline. I know not all of those will get completed in FY25, but do you expect any more to be opened in Q2 -- I'm sorry, in fiscal Q3.
And then just in terms of thinking about the timing of when things might open in your fourth quarter. I know that in Q2, all of the openings happened in February.
So even though you got three open, I wanted to just understand what the revenue contribution was, given that I think from an operating week perspective, you only had like five or six operating weeks in which you had new units opened in that quarter.

Hajime Uba

(interpreted) So we've got one more scheduled opening for Q3. If you go on our website, you can see that we already have the opening soon language up. And so that should be opening soon. In terms of Q4, we haven't updated our guidance. We're very comfortable with being able to open two units.
Should we be able to open both of those prior to the --, that would be an opportunity for us to provides an update to guidance on the unit front right now, it's just construction is happening in one of the constructions in a mall. And so that there's a level of uncertainty in terms of construction there.
(interpreted) It's in a food court. We're sort of like the center piece of the food court, but we've never had to do construction under those constraints before. Obviously, they're not shutting own the food court to let us build a restaurant. Yes, it's all overnight construction in that restaurant. So it takes a little longer.

Jeremy Hamblin

Thank you for taking me question and good luck.

Operator

Matt Curtis, William Blair.

Matthew Curtis

I wanted to get back to the revenue guidance for a minute. Could you tell us what second half comp expectations you have embedded to get to the full year revenue guide?

Hajime Uba

(interpreted) And given that we generally don't give comp guidance with the increased uncertainty, this is certainly not easier for us to give comp guidance, but the -- the revenue guidance does reflect our assumptions, both in terms of the accelerated openings that we've seen.
A lot of the fiscal '25 openings outperforming our expectations, reflecting Jimmy's comments about it. having the potential to be one of our strongest classes ever. But yes, we think you could be able to back out or back into our comp expectations from the revenue guidance that we presented in conjunction with the commentary on the pensions.

Matthew Curtis

Okay. Got it. Got it. And I guess switching to something else. You mentioned some of the IP collabs will be starting in May. Could you give us any details around exactly what you have planned on the IP front in the second half of the year?

Jeffrey Uttz

Yes. So the IP pipeline that we've been building is really -- the main thing that we were trying to change was having unsuccessful IPs. And so what we've built out is we have some of our best ever hits from the past coming up. So you've got Demon Slayer, we have One Piece, Peanuts. And then we've been developing our relationship with Nintendo.
So we have Kirby, which is one of their major Mascot characters coming up in fiscal '26. I'm personally a Kirby fan and I'm extremely excited. I can't share anything else in terms of the fiscal '26 pipeline, but we're very excited. As Jimmy shared in the opening remarks, we have seven or eight planned for fiscal '26. It's a big part of our strategy.

Matthew Curtis

Thank you so much.

Operator

Mark Smith, Lake Street Capital.

Mark Smith

First question, sorry if I missed it. Does the G&A guidance include the litigation expense.

Jeffrey Uttz

Yes, the guidance -- we haven't changed our guidance as it relates to the litigation expense being part of that number. It is part of it.

Mark Smith

Okay. Perfect. And then second one for me, just as we think about tariffs and kind of build out. Any idea outside of operations, maybe incremental costs on build-out of new restaurants at this point, especially any special equipment that you may be importing?

Hajime Uba

(interpreted) So we do bring in a certain amount of special equipment from overseas, largely Japan and China. Our initial estimate in terms of incremental cost as it relates to the tariffs, we think in a worst-case scenario would be about $400,000.
(interpreted) That being said, even with the potential increase in build-out costs, this doesn't change our thinking at all in terms of or desire to maintain 20%-plus unit growth rate.
(interpreted) So as a refresher, our AUVs of $4 million on restaurant operating profit margins of 20% against buildout cost of $2.5 million, you got the cash on cash returns of 33%. We just mentioned the worst-case scenario would be a $400,000 increase. We think a $300,000 increase. It is more realistic. That only changes the unit economics equation by half a year in terms of payback period.
And so it really doesn't change our appetite at all. We have $100 million in cash and long-term investments. We just renewed our revolver with the parent concert corn for $45 million. And so we're in a very strong capital position, and we're excited to be able to make decisions based off of what are in the long-term best interest of the company.

Mark Smith

Thank you

Operator

(Operator Instructions) JP Wollam, ROTH Capital Partners.

John-Paul Wollam

Maybe if we could start sort of on the levers on your side, understanding that the consumer environment is uncertain and certainly rapidly changing. But I was just hoping we could talk one on the reservation system, did you give a time line of when you would expect that to be fully rolled out?
And then two, can you just talk about kind of the marketing and maybe more also with the loyalty program. what else can you kind of do there to help drive volume from your loyalty members?

Jeffrey Uttz

Yes. So what we've shared publicly is that we expect to be able to roll out the reservation system-wide by the end of the fiscal year. My -- our goal is faster. We definitely want to be able to capture the leverage of seasonality that we see in Q4. And so that is one of our top priorities to achieve full system online.
In terms of the reward system, sort of the rewards program. We've got -- there are a couple of things that we're really excited about. The first is the reservation system is accessed through the reward system.
And so we know that's going to be a pretty, pretty meaningful catalyst in terms of registrations. And as we've discussed on past calls, rewards members are very valuable both in terms of frequency and spend. And so on that note, with the IP that we have coming up, we know that we can do a lot of different things. We've got giveaways and stuff like that, like we've done in the past, and those are very meaningful levers for us.

John-Paul Wollam

Okay. Understood. And then the second one would just be maybe more on a competitive note. I don't know how much kind of visibility you guys have, but any high-level thoughts about some of your competitors and maybe how the tariffs might impact their business and more specifically kind of their pricing structure and what it means kind of for the value delta that Kura provides relative to some of your competitors out there?

Hajime Uba

(interpreted) We appreciate you bringing this up. As shock as we were by the magnitude of the tariffs, we're certain that every other Mom and Pops restaurant was just a shock if not more shocked. And as you probably guess, we're in a much, much better position than them. And we believe that we can turn this into a competitive advantage and further widen the delta in terms of value between ourselves and the typical issue restaurant.
(interpreted) So the first would be that we're in a very strong cash position. As we just mentioned, we've got $100 million on the balance sheet access to another $45 million revolver. And so we're not in the same position as a month top where they need to be making decisions about keeping the lights on operational stuff like that, we can really make what is the decisions that are in terms of the best long-term strategy.
As Jeff had spoken to earlier or vendors are already coming to the table indicating that they want to work with us, are buying powers, orders of magnitude larger than the typical Sushi restaurant. We're probably one of the biggest fish buyers in the country.
And so that is something that is very different for us versus any of our competitors. And the last would just be all of the things that are unique to us, whether the new initiatives that we're talking about, the IP collaboration, the experientiality, all of those will continue to work in our favor.
(interpreted) Operating profit margins, generally speaking, are about 20% are amazing. We're really happy with them. And so if there is some short-term pressure on it, that's something that we can tolerate. We're able to make decisions that are not looking at the short term, but really the long term, and we're very grateful to be to have that strategic flexibility. And
(interpreted) To return to your initial question, absolutely, we think this is going to be a catalyst for widening of the value delta between ourselves and competitors. And we'll -- the value position will be stronger than ever.

John-Paul Wollam

Thank you.

Operator

Todd Brooks, Benchmark Company.

Todd Brooks

Only a couple left here. If we can talk IP partnership, I think you said the timing for the next one starts in May. And at one point, I think you were talking about one in Q3 and one to two in Q4. Does that imply when we get to May, we're running under IP partnerships for the balance of the fiscal year?

Jeffrey Uttz

Yes.

Todd Brooks

Okay. Great. And then I know when you talked about the pivot off of the kind of the six scheduled IP partnership cadence, there was a desire to really focus on the more impactful partnerships. A little surprised and encouraged to hear about seven to eight collaborations next year. Is the threshold in the hurdle of impactful still in place where...

Jeffrey Uttz

We're very, very happy with the work that the marketing team has been doing. Q2 was a difficult comparison, but that bottom the time to be able to put together this amazing IP pipeline. And so we think it was absolutely the right investment to make.

Todd Brooks

Okay. And then at kind of six-week durations, are we pretty much always on then as we think about fiscal '26 from an IP partnership?

Jeffrey Uttz

My guess at this point is that it will -- we'll probably have a couple of one-month collaborations, and that's how we get beyond the six collaborations per year that we've done historically.

Todd Brooks

Okay. Perfect. And then the other one was just a follow-up on the reservation system. I think you said you're in test now in three units and one of -- at least one of the ones in test is one of the really higher volume units. Just wondering and not looking for quantification, but the consistency of the lift that you're seeing from the system, either relative to your expectations or relative to what Kura Japan saw when they implemented it.
The consistency of lifts that you're seeing and how that's fueling the desire to get this rolled out even more quickly than in the end of the fiscal year and is the bandwidth there to really like I don't know how fast you can roll these out now that you've tested in three? Is this still an iterative process where you go to another five stores. And then what's the unlock to kind of hit the year-end goal for the reservation system.

Benjamin Porten

Yes. So to start in terms of guest response, so the high-volume restaurant that we referred to is Austin. I was there for the first week that we launched in Austin. The only -- because this isn't system-wide yet, the only marketing that we've been able to do is through the rewards program, if you set your favorite restaurant as say, also, then you would have gotten an e-mail saying, we now have reservations. And I was watching all the guests coming in.
And it seemed like the first day it was one-fourth to one-third of people were coming in, holding up their phones with their reservation numbers. I just genuinely blown away by that weekend, it was really like every other party had a reservation. And so for these restaurants that are super busy that have long lines, the value is immediately obvious to our guests.
And so that got us that much more excited made it really clear to us that there's a concrete upside that we could expect, and that's one of the other reasons that we're putting everything that we can into accelerating rollout.
In terms of the unlocks, I'd say that the biggest parts are behind us. It was really just getting text stability and making sure that we're able to figure out an operational flow that made sense, and that's largely been hammered out. And so now it's we're breaking up into teams, and we're going to be having simultaneous rollouts across the country.

Operator

Jim Sanderson, Northcoast Research.

Jim Sanderson

I wanted to go back to the quarterly performance. Did you break down same-store sales between traffic, price and mix? Or could you?

Jeffrey Uttz

Yes, we can. So total comp was minus 5.3%, and that was minus 8.5% traffic and 3.2% price and mix.

Jim Sanderson

All right. And again, any -- March was a meaningful improvement over that trend on the traffic line. Is that the right way to look at it?

Hajime Uba

(interpreted) In terms of performance and looking at it on an absolute basis, we're very pleased with Mark's performance. That being said, if we're talking about comps, last year's March was strong enough that -- it was so strong that, that's really what prompted our revenue guide raise last year. So March is really a tough month to compare ourselves against. But ex that, we were very, very happy with --.

Jim Sanderson

All right. And then a question on unit development. Can you provide a little bit more insight on what your development pipeline is looking like in the United States beyond fiscal '25, maybe indications of lease signs or sites you've identified anything that would give us a sense of a commitment you've got beyond the current fiscal year?

Hajime Uba

(interpreted) So generally speaking, you could assume that the foreseeable future, we're going to maintain that 20% plus unit growth rate. For fiscal '27, we expect to be able to get back to that 50-50 split between existing and new markets and the confidence behind that same income with the number of LOIs that we have under edition negotiation of the number of leases that we already have executed.

Jim Sanderson

All right. And just one last question on tariffs. Is it possible for you to move to a US only supply chain to source input costs over the next year, let's say?

Hajime Uba

(interpreted) It would probably be difficult to shift entirely to domestic. I mean you can't catch tuna in --. So there's just geographic biological limitations there. But what we can do is we can adjust between different fire countries. And so we're going to be keeping a very close eye over how the tariffs take out over the coming months.
And if there are countries that we're currently working with that are less advantageous and there are options for ingredients of comparable quality, better tariff rates, then certainly, that's something that we pursue.
(interpreted) One thing that we've been working over the last couple of years that is going to become critically important now is our relationships, not with just our broadline suppliers, but with the direct vendors. We -- our supply chain team goes -- they're traveling across the world, negotiating directly with the providers.
And so it's a very different situation from a Mom and Pop where they have -- their options are limited to what the broad liner is offering. We bring what we want to the broad liner. And so again, it's just a completely different story in terms of economies of scale. And as unfortunate as this is, this is. This is going to hurt our competitors a lot more than it's going to hurt us.

Operator

This concludes the question-and-answer session as well as today's teleconference. Thank you for your participation. You may disconnect your lines at this time.

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.