KURA SUSHI USA, INC.

Previous wording

During the nine months ended May 31, 2025, we opened thirteen restaurants and expanded our restaurant base to 76 restaurants in twenty states and Washington, DC. Subsequent to May 31, 2025, we opened two additional restaurant totaling 78 restaurants in 21 states and Washington, DC. We expect to open a total of 15 new restaurants in fiscal year 2025 and therefore, we expect our revenue and restaurant operating costs to increase in fiscal year 2025. We also expect our general and administrative expenses to increase on a dollar basis in fiscal 2025 to support the growth of the company.

Current wording

During the three months ended November 30, 2025, we opened four restaurants and expanded our restaurant base to 83 restaurants in 22 states and Washington, DC. We expect to open a total of 16 new restaurants in fiscal year 2026 and therefore, we expect our revenue and restaurant operating costs to increase in fiscal year 2026. We also expect our general and administrative expenses to increase on a dollar basis in fiscal 2026 to support the growth of the company.

Previous wording

We have evaluated and will continue to evaluate the impact of import laws and tariffs on our operations. As of May 31, 2025, there was no material impact on our business, financial condition, results of operations or cash flows. However, tariffs could impact our operations in certain areas, such as food and beverage costs, construction and equipment costs and other restaurant operating costs, for the remainder of fiscal 2025.

Current wording

We have evaluated and will continue to evaluate the impact of import laws and tariffs on our operations. During the three months ended November 30, 2025, tariffs had a considerable impact on our business, financial condition, results of operations and cash flows. Based on the current economic environment, tariffs are expected to continue to have a considerable impact on our operations in certain areas, such as food and beverage costs, construction and equipment costs and other restaurant operating costs throughout fiscal year 2026. We have historically used menu price increases to manage profitability in times of inflation or tariff increases. During the three months ended November 30, 2025, we increased menu prices, which we expect will partially offset the impact on our operations in fiscal year 2026. See our Annual Report on Form 10-K “Part I, Item 1A, “Risk Factors — Risks Related to Our Operations and Growth Strategy”.

Previous wording

The following tables present selected comparative results of operations for the three and nine months ended May 31, 2025 and May 31, 2024. Our financial results for these periods are not necessarily indicative of the financial results that we will achieve in future periods. Certain totals for the tables below may not recalculate or sum up to 100% due to rounding.

Current wording

The following tables present selected comparative results of operations for the three months ended November 30, 2025 and 2024. Our financial results for these periods are not necessarily indicative of the financial results that we will achieve in future periods. Certain totals for the tables below may not recalculate or sum up to 100% due to rounding.

Previous wording

Sales. Sales were $74.0 million for the three months ended May 31, 2025 compared to $63.1 million for the three months ended May 31, 2024, representing an increase of $10.9 million, or 17.3%. The increase in sales was primarily driven by the sales resulting from thirteen new restaurants that opened subsequent to May 31, 2024, as well as increases in menu prices during the same period. Comparable restaurant sales decreased 2.1%, consisting of negative traffic of 2.9% and a price/mix of 0.8% for the three months ended May 31, 2025, as compared to the three months ended May 31, 2024.

Current wording

Sales. Sales were $73.5 million for the three months ended November 30, 2025 compared to $64.5 million for the three months ended November 30, 2024, representing an increase of $9.0 million, or 14.0%. The increase in sales was primarily driven by the sales resulting from thirteen new restaurants that opened subsequent to November 30, 2024, as well as increases in menu prices during the same period. Comparable restaurant sales decreased 2.5%, consisting of negative traffic of 2.5% and flat price/mix, for the three months ended November 30, 2025, as compared to the three months ended November 30, 2024. The decrease in traffic is a result of lower consumer spending due to the macroeconomic environment.

Previous wording

Food and beverage costs. Food and beverage costs were $20.9 million for the three months ended May 31, 2025 compared to $18.4 million for the three months ended May 31, 2024, representing an increase of $2.5 million, or 13.8%. The increase in food and beverage costs was primarily driven by costs associated with sales from thirteen new restaurants that opened subsequent to May 31, 2024. As a percentage of sales, food and beverage costs decreased to 28.3% in the three months ended May 31, 2025 as compared to 29.2% in the three months ended May 31, 2024, primarily due to increases in menu prices and supply chain initiatives, which was partially offset by food cost inflation.

Current wording

Food and beverage costs. Food and beverage costs were $21.9 million for the three months ended November 30, 2025 compared to $18.7 million for the three months ended November 30, 2024, representing an increase of $3.2 million, or 17.5%. The increase in food and beverage costs was primarily driven by costs associated with sales from thirteen new restaurants that opened subsequent to November 30, 2024. As a percentage of sales, food and beverage costs increased to 29.9% in the three months ended November 30, 2025 as compared to 29.0% in the three months ended November 30, 2024, primarily due to tariffs on imported ingredients, which was partially offset by increases in menu prices.

Previous wording

Labor and related costs. Labor and related costs were $24.5 million for the three months ended May 31, 2025 compared to $20.5 million for the three months ended May 31, 2024, representing an increase of $4.0 million, or 19.2%. This increase in labor and related costs was primarily driven by additional labor costs incurred from thirteen new restaurants that opened subsequent to May 31, 2024. As a percentage of sales, labor and related costs increased to 33.1% in the three months ended May 31, 2025 as compared to 32.6% in the three months ended May 31, 2024. The increase in cost as a percentage of sales was primarily due to increases in wage rates subsequent to May 31, 2024, partially offset by increases in menu prices and operational efficiencies.

Current wording

Labor and related costs. Labor and related costs were $23.9 million for the three months ended November 30, 2025 compared to $21.2 million for the three months ended November 30, 2024, representing an increase of $2.7 million, or 12.5%. This increase in labor and related costs was primarily driven by additional labor costs incurred from thirteen new restaurants that opened subsequent to November 30, 2024. As a percentage of sales, labor and related costs decreased to 32.5% in the three months ended November 30, 2025 as compared to 32.9% in the three months ended November 30, 2024, primarily due to increases in menu prices and initiatives relating to operations, partially offset by sales deleverage as a result of a decrease in comparable restaurant sales and labor inflation.

Previous wording

Occupancy and related expenses. Occupancy and related expenses were $5.5 million for the three months ended May 31, 2025 compared to $4.3 million for the three months ended May 31, 2024, representing an increase of $1.2 million, or 28.3%. The increase was primarily a result of additional lease expense related to the opening of thirteen new restaurants that opened subsequent to May 31, 2024. As a percentage of sales, occupancy and related expenses increased to 7.5% in the three months ended May 31, 2025 as compared to 6.8% in the three months ended May 31, 2024, primarily driven by sales deleverage.

Current wording

Occupancy and related expenses. Occupancy and related expenses were $5.8 million for the three months ended November 30, 2025 compared to $4.8 million for the three months ended November 30, 2024, representing an increase of $1.0 million, or 22.8%. The increase was primarily a result of additional lease expense related to the opening of thirteen new restaurants that opened subsequent to November 30, 2024. As a percentage of sales, occupancy and related expenses increased to 7.9% in the three months ended November 30, 2025 as compared to 7.4% in the three months ended November 30, 2024, primarily driven by sales deleverage as a result of a decrease in comparable restaurant sales.

Previous wording

Depreciation and amortization expenses. Depreciation and amortization expenses incurred as part of restaurant operating costs were $3.5 million for the three months ended May 31, 2025 compared to $3.1 million for the three months ended May 31, 2024, representing an increase of $0.4 million, or 10.4%. The increase consists of depreciation of property and equipment related to the thirteen new restaurants that opened subsequent to May 31, 2024. As a percentage of sales, depreciation and amortization expenses at the restaurant level was 4.7% for the three months ended May 31, 2025 as compared to 5.0% in the three months ended May 31, 2024. Depreciation and amortization expenses incurred at the corporate level were $0.1 million for both the three months ended May 31, 2025 and May 31, 2024, and as a percentage of sales were 0.1% and 0.2%, respectively.

Current wording

Depreciation and amortization expenses. Depreciation and amortization expenses incurred as part of restaurant operating costs were $4.0 million for the three months ended November 30, 2025 compared to $3.1 million for the three months ended November 30, 2024, representing an increase of $0.9 million, or 28.8%. The increase consists of depreciation of property and equipment related to the thirteen new restaurants that opened subsequent to November 30, 2024. As a percentage of sales, depreciation and amortization expenses at the restaurant level was 5.4% for the three months ended November 30, 2025 as compared to 4.8% in the three months ended November 30, 2024, primarily driven by sales deleverage as a result of a decrease in comparable restaurant sales and remodel costs. Depreciation and amortization expenses incurred at the corporate level were $0.1 million for both the three months ended November 30, 2025 and November 30, 2024, and as a percentage of sales were both 0.2%.

Previous wording

Other costs. Other costs were $10.9 million for the three months ended May 31, 2025 compared to $8.9 million for the three months ended May 31, 2024, representing an increase of $2.0 million, or 22.0%. The increase was primarily driven by an increase in costs related to the thirteen new restaurants that opened subsequent to May 31, 2024. As a percentage of sales, other costs increased to 14.7% in the three months ended May 31, 2025 as compared to 14.1% in the three months ended May 31, 2024, primarily driven by utilities and repairs and maintenance, partially offset by lower marketing expenses.

Current wording

Other costs. Other costs were $11.8 million for the three months ended November 30, 2025 compared to $9.3 million for the three months ended November 30, 2024, representing an increase of $2.5 million, or 26.4%. The increase was primarily driven by an increase in costs related to the thirteen new restaurants that opened subsequent to November 30, 2024. As a percentage of sales, other costs increased to 16.1% in the three months ended November 30, 2025 as compared to 14.5% in the three months ended November 30, 2024, primarily driven by higher marketing expenses, repair and maintenance costs, utilities and travel expenses, as well as sales deleverage as a result of a decrease in comparable restaurant sales.

Previous wording

General and administrative expenses. General and administrative expenses were $8.7 million for the three months ended May 31, 2025 compared to $8.9 million for the three months ended May 31, 2024, representing a decrease of $0.2 million, or 1.3%. This decrease was primarily due to a decrease in prior year litigation expense of $0.7 million and lower professional fees of $0.2 million, partially offset by an increase in compensation-related expenses of $0.7 million. As a percentage of sales, general and administrative expenses decreased to 11.8% in the three months ended May 31, 2025 as compared to 14.0% in the three months ended May 31, 2024, primarily due to sales leverage and a decrease in professional fees and litigation expenses.

Current wording

General and administrative expenses. General and administrative expenses were $9.6 million for the three months ended November 30, 2025 compared to $8.7 million for the three months ended November 30, 2024, representing an increase of $0.9 million, or 9.4%. This increase was primarily due to litigation expenses of $0.2 million, professional fees of $0.2 million, travel expenses of $0.1 million and $0.4 million of other net increases. As a percentage of sales, general and administrative expenses decreased to 13.0% in the three months ended November 30, 2025 as compared to 13.5% in the three months ended November 30, 2024, primarily due to sales leverage.

Previous wording

Interest income. Interest income was $812 thousand for the three months ended May 31, 2025 compared to $686 thousand for the three months ended May 31, 2024. The increase was primarily driven by investing incremental cash from our follow-on offering completed in November 2024 into money market funds and investments, partially offset by lower interest rates.

Current wording

Interest income. Interest income was $674 thousand for the three months ended November 30, 2025 compared to $565 thousand for the three months ended November 30, 2024. The increase was primarily driven by investing incremental cash from our follow-on offering completed in November 2024 into interest-bearing money market funds and investments, partially offset by lower interest rates and withdraws for cash operating needs.

Previous wording

Income tax expense. Income tax expense was $55 thousand for the three months ended May 31, 2025 compared to an income tax expense of $60 thousand for the three months ended May 31, 2024. For further discussion of our income taxes, see “Note 9. Income Taxes” in the Notes to Condensed Financial Statements.

Current wording

Income tax expense. Income tax expense was $36 thousand for the three months ended November 30, 2025 compared to an income tax expense of $39 thousand for the three months ended November 30, 2024. For further discussion of our income taxes, see “Note 9. Income Taxes” in the Notes to Condensed Financial Statements.

Previous wording

EBITDA is defined as net income (loss) before interest, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus stock-based compensation expense, non-cash lease expense and asset disposals, closure costs and restaurant impairments, as well as certain items, such as litigation that we believe are not indicative of our core operating results. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by sales. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures which are intended as supplemental measures of our performance and are neither required by, nor presented in accordance with, GAAP. We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA margin provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results.

Current wording

EBITDA is defined as net income (loss) before interest, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus stock-based compensation expense, non-cash lease expense and asset disposals, closure costs and restaurant impairments, as well as certain items, such as litigation that we believe are not indicative of our core operating results. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by sales. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures which are intended as supplemental measures of our performance and are neither required by, nor presented in accordance with, GAAP. We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA margin provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results. However, these measures may not provide a complete understanding of the operating results of the Company as a whole and such measures should be reviewed in conjunction with our GAAP financial results.

Previous wording

The following table reconciles net income (loss) to EBITDA and Adjusted EBITDA:

Current wording

The following table reconciles net loss to EBITDA and Adjusted EBITDA:

Previous wording

Stock-based compensation expense includes non-cash stock-based compensation, which is comprised of restaurant-level stock-based compensation included in labor and related costs and of corporate-level stock-based compensation included in general and administrative expenses in the condensed statements of operations and comprehensive income (loss). For further details of stock-based compensation, see “Note 5. Stock-based Compensation” in the notes to condensed financial statements included in this Quarterly Report on Form 10-Q.

Current wording

Stock-based compensation expense includes non-cash stock-based compensation, which is comprised of restaurant-level stock-based compensation included in labor and related costs and of corporate-level stock-based compensation included in general and administrative expenses in the condensed statements of operations and comprehensive loss. For further details of stock-based compensation, see “Note 5. Stock-based Compensation” in the notes to condensed financial statements included in this Quarterly Report on Form 10-Q.

Previous wording

Restaurant-level Operating Profit (Loss) is defined as operating income (loss) plus depreciation and amortization; stock-based compensation expense; pre-opening costs and general and administrative expenses which are considered normal, recurring, cash operating expenses and are essential to support the development and operations of our restaurants; non-cash lease expense; asset disposals, closure costs and restaurant impairments; less corporate-level stock-based compensation expense recognized within general and administrative expenses. Restaurant-level Operating Profit (Loss) margin is defined as Restaurant-level Operating Profit (Loss) divided by sales. Restaurant-level Operating Profit (Loss) and Restaurant-level Operating Profit (Loss) margin are non-GAAP measures which are intended as supplemental measures of our performance and are neither required by, nor presented in accordance with, GAAP. We believe that Restaurant-level Operating Profit (Loss) and Restaurant-level Operating Profit (Loss) margin provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results, as this measure depicts normal, recurring cash operating expenses essential to supporting the development and operations of our restaurants. However, these measures may not provide a complete understanding of the operating results of the Company as a whole and such measures should be reviewed in conjunction with our GAAP financial results. We expect

Current wording

Restaurant-level Operating Profit (Loss) is defined as operating income (loss) plus depreciation and amortization; stock-based compensation expense; pre-opening costs and general and administrative expenses which are considered normal, recurring, cash operating expenses and are essential to support the development and operations of our restaurants; non-cash lease expense; asset disposals, closure costs and restaurant impairments; less corporate-level stock-based compensation expense recognized within general and administrative expenses. Restaurant-level Operating Profit (Loss) margin is defined as Restaurant-level Operating Profit (Loss) divided by sales. Restaurant-level Operating Profit (Loss) and Restaurant-level Operating Profit (Loss) margin are non-GAAP measures which are intended as supplemental measures of our performance and are neither required by, nor presented in accordance with, GAAP. We believe that Restaurant-level Operating Profit (Loss) and Restaurant-level Operating Profit (Loss) margin provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results, as this measure depicts normal, recurring cash operating expenses essential to supporting the development and operations of our restaurants. However, these measures may not provide a complete understanding of the operating results of the Company as a whole and such measures should be reviewed in conjunction with our GAAP financial results. We expect Restaurant-level Operating Profit (Loss) to increase in proportion to the number of new restaurants we open and our comparable restaurant sales growth.

Previous wording

Stock-based compensation expense includes non-cash stock-based compensation, which is comprised of restaurant-level stock-based compensation included in labor and related costs and of corporate-level stock-based compensation included in general and administrative expenses in the condensed statements of operations and comprehensive income (loss). For further details of stock-based compensation, see “Note 5. Stock-based Compensation” in the notes to condensed financial statements included in this Quarterly Report on Form 10-Q.

Current wording

Stock-based compensation expense includes non-cash stock-based compensation, which is comprised of restaurant-level stock-based compensation included in labor and related costs and of corporate-level stock-based compensation included in general and administrative expenses in the condensed statements of operations and comprehensive loss. For further details of stock-based compensation, see “Note 5. Stock-based Compensation” in the notes to condensed financial statements included in this Quarterly Report on Form 10-Q.

Previous wording

consumer recognition of our brand and our ability to respond to changing consumer preferences;

Current wording

consumer recognition of our brand and our ability to respond to changing consumer preferences and spending behavior;

Previous wording

During the nine months ended May 31, 2025, we had no borrowings under the Revolving Credit Agreement and have $45.0 million of availability remaining. As of May 31, 2025, we did not have any material off-balance sheet arrangements.

Current wording

During the three months ended November 30, 2025, we had no borrowings under the Revolving Credit Agreement and have $45.0 million of availability remaining. As of November 30, 2025, we did not have any material off-balance sheet arrangements.

Previous wording

Net cash provided by operating activities during the nine months ended May 31, 2025 was $15.3 million, primarily due to a net loss of $4.2 million, non-cash charges of $10.2 million for depreciation and amortization, $3.5 million for stock-based compensation, and net cash outflows of $5.6 million from changes in operating assets and liabilities.

Current wording

Net cash provided by operating activities during the three months ended November 30, 2025 was $0.5 million, primarily due to a net loss of $3.1 million, non-cash charges of $4.1 million for depreciation and amortization, $1.1 million for stock-based compensation, and net cash outflows of $1.7 million from changes in operating assets and liabilities.

Previous wording

Net cash provided by operating activities during the nine months ended May 31, 2024 was $14.9 million, primarily due to a net loss of $3.6 million, non-cash charges of $8.6 million for depreciation and amortization, $3.2 million for stock-based compensation, and $3.4 million in non-cash lease expense, and net cash outflows of $3.4 million from changes in operating assets and liabilities.

Current wording

Net cash provided by operating activities during the three months ended November 30, 2024 was $4.4 million, primarily due to a net loss of $1.0 million, non-cash charges of $3.2 million for depreciation and amortization, $1.1 million for stock-based compensation, and $1.3 million in non-cash lease expense, and net cash outflows of $0.3 million from changes in operating assets and liabilities.

Previous wording

Net cash used in investing activities during the nine months ended May 31, 2024 was $27.3 million, primarily due to $3.3 million in purchases of short-term investments, $34.0 million in purchases of property and equipment and $0.2 million in purchases of liquor licenses offset by $10.5 million in redemptions of short-term investments. The increase in purchases of property and equipment in the nine months ended May 31, 2024 is primarily related to capital expenditures for current and future restaurant openings, renovations and maintaining our existing restaurants and other projects.

Current wording

Net cash used in investing activities during the three months ended November 30, 2025 was $12.7 million, primarily due to $18.4 million in purchases of investments and $13.8 million in purchases of property and equipment and $0.1 million in purchases of liquor licenses offset by $19.7 million in maturities and redemptions of investments. The increase in purchases of property and equipment in the three months ended November 30, 2025 is primarily related to capital expenditures for the construction of future restaurant openings, maintaining our existing restaurants, renovations and other projects.

Previous wording

Net cash used in investing activities during the nine months ended May 31, 2025 was $84.2 million, primarily due to $70.2 million in purchases of investments, $36.7 million in purchases of property and equipment and $1.0 million in purchases of liquor licenses offset by $24.0 million in redemptions of long-term investments. The increase in purchases of property and equipment in the nine months ended May 31, 2025 is primarily related to capital expenditures for current and future restaurant openings, maintaining our existing restaurants and other projects.

Current wording

Net cash used in investing activities during the three months ended November 30, 2024 was $12.5 million, primarily due to $11.6 million in purchases of property and equipment and $0.8 million in purchases of liquor licenses. The increase in purchases of property and equipment in the three months ended November 30, 2024 is primarily related to capital expenditures for the construction of future restaurant openings, maintaining our existing restaurants, renovations and other projects.

Previous wording

Net cash provided by financing activities during the nine months ended May 31, 2024 was $2.0 million and is primarily due to $2.3 million of proceeds from exercise of stock options offset by $0.2 million in taxes paid on vested RSUs.

Current wording

Net cash provided by financing activities during the three months ended November 30, 2025 was $1 thousand and is primarily due to $23 thousand of proceeds from exercise of stock options offset by $22 thousand in repayment of principal on finance leases.

Previous wording

Net cash provided by financing activities during the nine months ended May 31, 2025 was $65.0 million and is primarily due to aggregate net proceeds from the issuance of stock of $64.4 million after deducting the underwriting discounts and commissions and offering expenses, $0.9 million of proceeds from exercise of stock options offset by $0.3 million in taxes paid on vested RSUs.

Current wording

Net cash provided by financing activities during the three months ended November 30, 2024 was $64.8 million and is primarily due to aggregate net proceeds from the issuance of stock of $64.4 million after deducting the underwriting discounts and commissions and offering expenses payable and $0.5 million of proceeds from exercise of stock options.

Previous wording

As of May 31, 2025, we had $11.2 million in contractual obligations relating to the construction of new restaurants and purchase commitments for goods related to restaurant operations. All contractual obligations are expected to be paid during the next 12 months utilizing cash and cash equivalents on hand and provided by operating activities. For operating lease obligations, see “Note 3. Leases” in the Notes to Condensed Financial Statements included in this Quarterly Report on Form 10-Q.

Current wording

As of November 30, 2025, we had $25.7 million in contractual obligations which consisted of $13.5 million in purchase commitments for food related to restaurant operations and $12.2 million related to the construction of new restaurants. All contractual obligations are expected to be paid during the next 12 months utilizing cash and cash equivalents on hand and provided by operating activities. For operating lease obligations, see “Note 3. Leases” in the Notes to Condensed Financial Statements included in this Quarterly Report on Form 10-Q.