Kura Sushi USA (KRUS) The 44th Annual William Blair Growth Stock Conference summary

Company Overview and Growth Strategy

• Operates a revolving sushi bar concept with a growing national footprint, expanding from 3 states at IPO in 2019 to 17 states and Washington, D.C., with 63-64 units expected by the end of 2024.

• Achieved 12 consecutive quarters of positive traffic, with annual unit growth expected to exceed 20% and revenue growth visibility above 25% for the foreseeable future.

• Average unit volume increased from $3.5M in 2019 to $4.3M in 2023, with comparable restaurant sales growth of 3.0% in Q2 FY24.

• Top-performing units are geographically diverse, including locations in Washington, Texas, New Jersey, and California, with recent successful openings in non-traditional sushi markets.

• Robust new unit pipeline for fiscal years 2024 and 2025, with multiple locations under construction and leases executed in key markets.

Operational Efficiency and Technology

• Proprietary automation, including robot-assisted kitchen operations and rice preparation, reduces labor costs and eliminates the need for highly trained executive chefs.

• Enhancements to operational technology, such as robot servers and contactless payment systems, support efficiency and guest experience.

• Access to over 50 patents and 40 years of operational knowledge from the parent company in Japan provides a competitive edge.

• Automation enables high-quality offerings at lower prices, maintaining a strong value proposition and operational moat.

• Robotic dishwashers and Sushi Sliders are being developed to further streamline operations and reduce headcount, with future restaurant designs accommodating these technologies.

Value Proposition and Customer Engagement

• Labor savings from automation are reinvested into food quality, allowing prices roughly half that of independent competitors and supporting three years of positive traffic.

• Menu analyses show average competitors charge at least double for similar items, such as $3 for two pieces of bluefin tuna versus $7-$8 elsewhere.

• New rewards program launched in October using Punchh, doubling registration rates and increasing the share of sales from loyalty members to one-third.

• Strategic licensing partnerships with major brands such as Dragon Ball and upcoming collaborations with One Piece drive customer engagement.

• Exclusive DoorDash partnership is immediately margin accretive due to no additional labor required, with off-premises sales seen as a future growth lever.