Form 10-Q - Quarterly report [Sections 13 or 15(d)]

KRUS Kura Sushi USA Inc

KRUS Kura Sushi USA Inc

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-39012

KURA SUSHI USA, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	26-3808434
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
17461 Derian Avenue, Suite 200 Irvine, California	92614
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (657) 333-4100

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    Class A Common Stock, $0.001 par value per share

    KRUS

    The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 2, 2024, the registrant had 10,244,893 shares of Class A common stock, $0.001 par value per share, outstanding and 1,000,050 shares of Class B common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Balance Sheets	1
	Condensed Statements of Operations and Comprehensive (Loss) Income	2
	Condensed Statements of Stockholders’ Equity	3
	Condensed Statements of Cash Flows	4
	Notes to Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
PART II.	OTHER INFORMATION	26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
Signatures		28

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Kura Sushi USA, Inc.

Condensed Balance Sheets

(amounts in thousands, except par value)

(Unaudited)


	May 31, 2024			August 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	59,405		$	69,697
Short-term investments		1,250			8,542
Accounts and other receivables		5,510			5,048
Inventories		2,132			1,747
Due from affiliate		—			104
Prepaid expenses and other current assets		3,988			4,233
Total current assets		72,285			89,371
Non-current assets:
Property and equipment – net		130,663			106,427
Operating lease right-of-use assets		117,030			103,884
Deposits and other assets		4,753			4,977
Total assets	$	324,731		$	304,659

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	8,063		$	7,248
Accrued expenses and other current liabilities		3,412			2,821
Salaries and wages payable		8,596			7,595
Operating lease liabilities – current		11,734			9,225
Due to affiliate		123			555
Sales tax payable		1,766			1,694
Total current liabilities		33,694			29,138
Non-current liabilities:
Operating lease liabilities – non-current		123,848			110,234
Other liabilities		763			646
Total liabilities		158,305			140,018
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, $0.001 par value; 1,000 shares authorized, no shares issued or outstanding		—			—
Class A common stock, $0.001 par value; 50,000 shares authorized, 10,243 and 10,147 shares issued and outstanding as of May 31, 2024 and August 31, 2023, respectively		10			10
Class B common stock, $0.001 par value; 10,000 shares authorized, 1,000 shares issued and outstanding as of May 31, 2024 and August 31, 2023		1			1
Additional paid-in capital		194,202			188,771
Accumulated deficit		(27,787	)		(24,184	)
Accumulated other comprehensive income		—			43
Total stockholders' equity		166,426			164,641
Total liabilities and stockholders' equity	$	324,731		$	304,659

The accompanying notes are an integral part of these condensed financial statements.

Kura Sushi USA, Inc.

Condensed Statements of Operations and Comprehensive (Loss) Income

(amounts in thousands, except per share data)

(Unaudited)


	Three Months Ended May 31,						Nine Months Ended May 31,
	2024			2023			2024			2023
Sales	$	63,082		$	49,238		$	171,848		$	132,500
Restaurant operating costs:
Food and beverage costs		18,391			14,770			50,691			40,440
Labor and related costs		20,378			14,362			55,409			40,751
Occupancy and related expenses		4,318			3,554			12,179			9,504
Depreciation and amortization expenses		3,124			1,975			8,294			5,309
Other costs		9,076			6,165			25,023			17,352
Total restaurant operating costs		55,287			40,826			151,596			113,356
General and administrative expenses		8,857			7,012			25,634			20,776
Depreciation and amortization expenses		107			92			318			265
Total operating expenses		64,251			47,930			177,548			134,397
Operating (loss) income		(1,169	)		1,308			(5,700	)		(1,897	)
Other expense (income):
Interest expense		15			23			35			53
Interest income		(686	)		(436	)		(2,280	)		(593	)
(Loss) income before income taxes		(498	)		1,721			(3,455	)		(1,357	)
Income tax expense		60			41			148			66
Net (loss) income	$	(558	)	$	1,680		$	(3,603	)	$	(1,423	)
Net (loss) income per Class A and Class B shares
Basic	$	(0.05	)	$	0.16		$	(0.32	)	$	(0.14	)
Diluted	$	(0.05	)	$	0.16		$	(0.32	)	$	(0.14	)
Weighted average Class A and Class B shares outstanding
Basic		11,188			10,485			11,167			10,028
Diluted		11,188			10,807			11,167			10,028

Other comprehensive income (loss):
Unrealized loss on short-term investments	$	(76	)	$	(7	)	$	(43	)	$	(7	)
Comprehensive (loss) income	$	(634	)	$	1,673		$	(3,646	)	$	(1,430	)

The accompanying notes are an integral part of these condensed financial statements.

Kura Sushi USA, Inc.

Condensed Statements of Stockholders’ Equity

(amounts in thousands)

(Unaudited)


	Common Stock								Additional					Accumulated			Total
	Class A				Class B				Paid-in		Accumulated			Other Comprehensive			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Income			Equity
Balances as of August 31, 2023		10,147	$	10		1,000	$	1	$	188,771	$	(24,184	)	$	43		$	164,641
Stock-based compensation		—		—		—		—		1,034		—			—			1,034
Employee stock plan		8		—		—		—		110		—			—			110
Net loss		—		—		—		—		—		(2,047	)		—			(2,047	)
Other comprehensive income		—		—		—		—		—		—			3			3
Balances as of November 30, 2023		10,155	$	10		1,000	$	1	$	189,915	$	(26,231	)	$	46		$	163,741
Stock-based compensation		—		—		—		—		1,080		—			—			1,080
Employee stock plan		71		—		—		—		1,427		—			—			1,427
Net loss		—		—		—		—		—		(998	)		—			(998	)
Other comprehensive income		—		—		—		—		—		—			30			30
Balances as of February 29, 2024		10,226	$	10		1,000	$	1	$	192,422	$	(27,229	)	$	76		$	165,280
Stock-based compensation		—		—		—		—		1,236		—			—			1,236
Employee stock plan		17		—		—		—		544		—			—			544
Net loss		—		—		—		—		—		(558	)		—			(558	)
Other comprehensive loss		—		—		—		—		—		—			(76	)		(76	)
Balances as of May 31, 2024		10,243	$	10		1,000	$	1	$	194,202	$	(27,787	)	$	—		$	166,426

	Common Stock								Additional					Accumulated			Total
	Class A				Class B				Paid-in		Accumulated			Other Comprehensive			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Income			Equity
Balances as of August 31, 2022		8,788	$	9		1,000	$	1	$	118,970	$	(25,686	)	$	—		$	93,294
Stock-based compensation		—		—		—		—		650		—			—			650
Employee stock plan		3		—		—		—		51		—			—			51
Net loss		—		—		—		—		—		(2,088	)		—			(2,088	)
Balances as of November 30, 2022		8,791	$	9		1,000	$	1	$	119,671	$	(27,774	)	$	—		$	91,907
Stock-based compensation		—		—		—		—		945		—			—			945
Employee stock plan		28		—		—		—		533		—			—			533
Net loss		—		—		—		—		—		(1,015	)		—			(1,015	)
Balances as of February 28, 2023		8,819	$	9		1,000	$	1	$	121,149	$	(28,789	)	$	—		$	92,370
Stock-based compensation		—		—		—		—		975		—			—			975
Employee stock plan		17		—		—		—		423		—			—			423
Issuance of common stock in connection with follow-on public offering, net of underwriter discounts and issuance costs		1,265		1		—		—		64,298		—			—			64,299
Net income		—		—		—		—		—		1,680			—			1,680
Other comprehensive loss		—		—		—		—		—		—			(7	)		(7	)
Balances as of May 31, 2023		10,101	$	10		1,000	$	1	$	186,845	$	(27,109	)	$	(7	)	$	159,740

The accompanying notes are an integral part of these condensed financial statements.

Kura Sushi USA, Inc.

Condensed Statements of Cash Flows

(amounts in thousands)

(Unaudited)


	Nine Months Ended May 31,
	2024			2023
Cash flows from operating activities
Net loss	$	(3,603	)	$	(1,423	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization		8,612			5,574
Stock-based compensation, net of amounts capitalized		3,169			2,570
Loss on disposal of property and equipment		—			53
Non-cash lease expense		3,407			2,820
Changes in operating assets and liabilities:
Accounts and other receivables		(587	)		(230	)
Inventories		(385	)		(267	)
Due from affiliate		104			156
Prepaid expenses and other current assets		1,326			(1,876	)
Deposits and other assets		443			122
Accounts payable		11			(71	)
Accrued expenses and other current liabilities		1,485			(1,176	)
Salaries and wages payable		1,001			977
Operating lease liabilities		3			(341	)
Due to affiliate		(23	)		26
Sales tax payable		(20	)		149
Net cash provided by operating activities		14,943			7,063
Cash flows from investing activities
Payments for property and equipment		(33,977	)		(27,215	)
Payments for initial direct costs		(309	)		(320	)
Payments for purchases of liquor licenses		(219	)		(947	)
Purchases of short-term investments		(3,251	)		(8,749	)
Redemption of short-term investments		10,499			—
Net cash used in investing activities		(27,257	)		(37,231	)
Cash flows from financing activities
Repayment of principal on finance leases		(60	)		(446	)
Taxes paid on vested restricted stock awards		(217	)		—
Proceeds from exercise of stock options		2,299			1,007
Proceeds from the follow-on public offering, net of discounts and commissions		—			64,895
Payments of costs related to the follow-on offering		—			(596	)
Net cash provided by financing activities		2,022			64,860
Decrease in cash and cash equivalents		(10,292	)		34,692
Cash and cash equivalents, beginning of period		69,697			35,782
Cash and cash equivalents, end of period	$	59,405		$	70,474
Supplemental disclosures of cash flow information
Cash paid for income taxes	$	282		$	185
Noncash investing activities
Amounts unpaid for purchases of property and equipment	$	1,276		$	1,706

The accompanying notes are an integral part of these condensed financial statements.

Kura Sushi USA, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 1. Organization and Basis of Presentation

Kura Sushi USA, Inc. is a technology-enabled Japanese restaurant concept that provides guests with a distinctive dining experience by serving authentic Japanese cuisine through an engaging revolving sushi service model, which the Company refers to as the “Kura Experience.” Kura Sushi encourages healthy lifestyles by serving freshly prepared Japanese cuisine using high-quality ingredients that are free from artificial seasonings, sweeteners, colorings, and preservatives. Kura Sushi aims to make quality Japanese cuisine accessible to its guests across the United States through affordable prices and an inviting atmosphere. “Kura Sushi USA,” “Kura Sushi,” “Kura,” “our” and the “Company” refer to Kura Sushi USA, Inc. unless expressly indicated or the context otherwise requires.

Basis of Presentation

The accompanying unaudited condensed financial statements (the “Condensed Financial Statements”) have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. As such, these Condensed Financial Statements should be read in conjunction with the Company’s audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended August 31, 2023.

The accounting policies followed by the Company are set forth in Part II, Item 8, Note 2, Basis of Presentation and Summary of Significant Accounting Policies, of the Notes to Financial Statements included in the Company’s Annual Report on Form 10‑K for the fiscal year ended August 31, 2023. In the opinion of management, all adjustments necessary to fairly state the Condensed Financial Statements have been made. All such adjustments are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of results to be expected for the fiscal year ending August 31, 2024 or for any other future annual or interim period.

Fiscal Year

The Company’s fiscal year begins on September 1 and ends on August 31, and references made to “fiscal year 2024” and “fiscal year 2023” refer to the Company’s fiscal years ending August 31, 2024 and ended August 31, 2023, respectively.

Use of Estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented.

Significant items subject to such estimates include asset retirement obligations, stock-based compensation, the useful lives of assets, the assessment of the recoverability of long-lived assets, and income taxes. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions.

Short-Term Investments

Short-term investments consist of certificates of deposits and Treasury bills. The Company considers all highly liquid investments with an original maturity date greater than three months but less than one year as short-term investments. The carrying value of the short-term investments is equivalent to their amortized cost basis. As of May 31, 2024 and August 31, 2023, short-term investments were $1.3 million and $8.5 million, respectively. The certificates of deposits are deposited at Federal Deposit Insurance Corporation (“FDIC”) insured banks. The certificates of deposits are in amounts of $250,000 and deposited in multiple banks to ensure that the entire deposit balance is eligible for FDIC insurance. Certificates of deposits and Treasury bills are classified as available-for-sale debt securities which are measured at fair value with unrealized gains or losses recorded in other comprehensive income (loss). As of May 31, 2024, the Company recorded no unrealized gains or losses on short-term investments in accumulated other comprehensive income (loss). The Company reclassified $76 thousand out of accumulated other comprehensive income into earnings for the period related to maturities of certificates of deposits and a Treasury bill, which consisted of $75 thousand in realized gains on a Treasury bill and $1 thousand in realized gains on certificates of deposits. The Company determines realized gains or losses

on the available-for-sale debt securities on a specific identification method basis. Based on the evaluation of credit risk factors, the Company has concluded that an allowance for credit losses is unnecessary for its short-term investments.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company’s short-term investments consist of certificates of deposits and Treasury bills that are classified as available-for-sale debt securities which are measured at fair value with unrealized gains or losses recorded in other comprehensive income (loss).

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid and effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued. The amendments should be applied on a prospective basis although retrospective application is permitted. The Company is currently evaluating the effects of this pronouncement on its financial statements and expects the update to result in additional disclosures.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance in this update is effective for all public entities for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the effects of this pronouncement on its financial statements and expects the update to result in additional disclosures.

Note 2. Balance Sheet Components

Accounts and Other Receivables


	May 31, 2024		August 31, 2023
	(amounts in thousands)
Lease receivables	$	3,813	$	3,973
Credit card and other receivables		1,697		1,075
Total accounts and other receivables	$	5,510	$	5,048

Property and Equipment - net


	May 31, 2024			August 31, 2023
	(amounts in thousands)
Leasehold improvements	$	97,827		$	75,472
Lease assets		6,229			6,247
Furniture and fixtures		49,114			34,213
Computer equipment		3,650			2,792
Vehicles		220			220
Software		1,017			1,016
Construction in progress		8,620			14,369
Property and equipment – gross		166,677			134,329
Less: accumulated depreciation and amortization		(36,014	)		(27,902	)
Total property and equipment – net	$	130,663		$	106,427

Depreciation and amortization expense for property and equipment was $3.2 million and $2.1 million for the three months ended May 31, 2024 and May 31, 2023, respectively, and was $8.6 million and $5.6 million for the nine months ended May 31, 2024 and May 31, 2023, respectively.

Note 3. Leases

The Company has operating and finance leases for its corporate office, restaurant locations, office equipment, kitchen equipment and automobiles. The Company’s finance leases are immaterial. The Company’s leases have remaining lease terms of less than 1 year to 20 years, some of which include options to extend the leases.

Lease related costs recognized in the statements of operations and comprehensive income (loss) are as follows:




		Three Months Ended May 31,				Nine Months Ended May 31,
		2024		2023		2024		2023
		(amounts in thousands)
Operating lease cost	Classification
Operating lease cost	Occupancy and related expenses, other costs and general and administrative expenses	$	3,380	$	3,208	$	9,678	$	7,450
Variable lease cost	Occupancy and related expenses, and general and administrative expenses		992		1,072		2,567		2,307
Total operating lease cost		$	4,372	$	4,280	$	12,245	$	9,757

Supplemental balance sheet information related to leases is as follows:

Operating Leases


	May 31, 2024		August 31, 2023
	(amounts in thousands)
Right-of-use assets	$	117,030	$	103,884

Lease liabilities – current	$	11,734	$	9,225
Lease liabilities – non-current		123,848		110,234
Total lease liabilities	$	135,582	$	119,459



	Nine Months Ended May 31,
	2024			2023
Weighted Average Remaining Lease Term (Years)
Operating leases		16.5			16.3

Weighted Average Discount Rate
Operating leases		7.1	%		6.6	%

Supplemental disclosures of cash flow information related to leases are as follows:


	Nine Months Ended May 31,
	2024		2023
	(amounts in thousands)
Operating cash flows paid for operating lease liabilities	$	7,769	$	5,775
Operating right-of-use assets obtained in exchange for new operating lease liabilities	$	17,774	$	18,415

As of May 31, 2024, the Company had an additional $44.7 million of operating leases related to restaurants for which the Company had not yet taken possession. Subsequent to May 31, 2024, the Company entered into two additional operating leases related to restaurants for which the Company has not yet taken possession. The lease liabilities associated with the leases after May 31, 2024 are $15.6 million. The operating leases are expected to commence in fiscal year 2025, with lease terms of up to 30 years.

Maturities of lease liabilities, net of lease receivables, were as follows:


	Operating Leases
	(amounts in thousands)
Remainder of 2024	$	380
2025		9,940
2026		12,373
2027		13,111
2028		12,730
Thereafter		184,104
Total lease payments		232,638
Less: imputed interest		(97,056	)
Present value of lease liabilities	$	135,582

Note 4. Related Party Transactions

Kura Sushi, Inc. (“Kura Japan”) is the majority stockholder of the Company and is incorporated and headquartered in Japan. In August 2019, the Company entered into a Shared Services Agreement with Kura Japan, pursuant to which Kura Japan provides the Company with certain strategic, operational and other support services, including assigning certain employees to work for the Company as expatriates to provide support to the Company’s operations, sending its employees to the Company on a short-term basis to provide support for the opening of new restaurants or renovation of existing restaurants, and providing the Company with certain supplies, parts and equipment for use in the Company’s restaurants. In addition, the Company has agreed to continue to provide Kura Japan with certain translational support services and market research. In exchange for such services, supplies, parts and equipment, the parties pay fees to each other as set forth under the Shared Services Agreement. A right of setoff is not required; however, from time to time, either party will net settle transactions as needed. Purchases of administrative supplies, expatriate salaries and travel and other administrative expenses payable to Kura Japan are included in general and administrative expenses in the accompanying statements of operations and comprehensive income (loss). Purchases of equipment from Kura Japan are included in property and equipment in the accompanying balance sheets.

In August 2019, the Company entered into an Amended and Restated Exclusive License Agreement (the “License Agreement”) with Kura Japan. Pursuant to the License Agreement, the Company pays Kura Japan a royalty fee of 0.5% of the Company’s net sales in exchange for an exclusive, royalty-bearing license for the use of certain of Kura Japan’s intellectual property rights, including, but not limited to, Kura Japan’s trademarks for “Kura Sushi,” “Mr. Fresh” and “Kura Revolving Sushi Bar,” and patents for a food management system and the Mr. Fresh protective dome, among other intellectual property rights necessary to continue operation of the Company’s restaurants. Royalty payments to Kura Japan are included in other costs at the restaurant level in the accompanying statements of operations and comprehensive income (loss).

On April 10, 2020, the Company and Kura Japan entered into a Revolving Credit Agreement, as amended, to provide the Company a revolving credit line of $45.0 million (the “Revolving Credit Agreement”). For additional information, see “Note 6. Debt.”

Balances with Kura Japan are as follows:


	May 31, 2024		August 31, 2023
	(amounts in thousands)
Due from affiliate	$	—	$	104
Due to affiliate	$	123	$	555

Reimbursements and other payments by the Company to Kura Japan were as follows:


	Three Months Ended May 31,				Nine Months Ended May 31
	2024		2023		2024		2023
	(amounts in thousands)
Related party transactions:
Expatriate salaries expense	$	33	$	33	$	124	$	87
Royalty payments		314		246		859		663
Travel and other administrative expenses		—		—		6		30
Purchases of equipment		374		568		1,811		2,024
Total related party transactions	$	721	$	847	$	2,800	$	2,804

Reimbursements by Kura Japan to the Company were $42 thousand and $7 thousand for the three months ended May 31, 2024 and May 31, 2023, respectively and were $264 thousand and $67 thousand for the nine months ended May 31, 2024 and May 31, 2023, respectively. The reimbursements were primarily for directors and officers liability insurance, travel, professional fees and other administrative expenses.

Note 5. Stock-based Compensation

The following table summarizes the stock option activity under the Company’s 2018 Incentive Compensation Plan, as amended and restated (the “Stock Incentive Plan”):


	Options Outstanding
	Number of Shares Underlying Outstanding Options			Weighted Average Exercise Price Per Share

Outstanding — August 31, 2023		653,395		$	34.25
Granted		16,360		$	72.25
Exercised		(7,241	)	$	15.15
Cancelled/forfeited		(3,816	)	$	56.75
Outstanding — November 30, 2023		658,698		$	35.27
Granted		49,420		$	95.04
Exercised		(64,581	)	$	25.00
Cancelled/forfeited		(6,786	)	$	71.09
Outstanding — February 29, 2024		636,751		$	40.57
Granted		3,199		$	104.47
Exercised		(16,391	)	$	35.30
Cancelled/forfeited		(2,169	)	$	69.57
Outstanding — May 31, 2024		621,390		$	40.94

The following table summarizes the restricted stock unit (“RSU”) activity under the Stock Incentive Plan:


	Number of Shares Underlying Outstanding RSU			Weighted Average Grant Date Fair Value
Outstanding — August 31, 2023		31,105		$	69.88
Granted		—			—
Vested		(1,359	)	$	73.58
Cancelled/forfeited		(351	)	$	62.14
Outstanding — November 30, 2023		29,395		$	69.80
Granted		19,939		$	98.13
Vested		(8,095	)	$	62.14
Cancelled/forfeited		(436	)	$	66.10
Outstanding — February 29, 2024		40,803		$	85.20
Granted		—			—
Vested		(8	)	$	62.14
Cancelled/forfeited		(495	)	$	83.73
Outstanding — May 31, 2024		40,300		$	85.23

The total stock-based compensation recognized under the Stock Incentive Plan in the statements of operations and comprehensive income (loss) is as follows:


	Three Months Ended May 31,				Nine Months Ended May 31,
	2024		2023		2024		2023
	(amounts in thousands)
Restaurant-level stock-based compensation included in other costs	$	194	$	163	$	497	$	382
Corporate-level stock-based compensation included in general and administrative expenses		1,003		812		2,672		2,188
Stock-based compensation, net of amounts capitalized		1,197		975		3,169		2,570
Amount capitalized to Property and Equipment - net		39		—		181		—
Total stock-based compensation	$	1,236	$	975	$	3,350	$	2,570

Note 6. Debt

On April 10, 2020, the Company and Kura Japan entered into a Revolving Credit Agreement, as amended, establishing a $45.0 million revolving credit line for the Company. The maturity date for each advance is 60 months from the date of disbursement and the last day of the period of availability for advances is April 10, 2025. The Revolving Credit Note under the Revolving Credit Agreement has an interest rate for advances fixed at 130% of the Annual Compounding Long-Term Applicable Federal Rate (“AFR”) on the date such advance is made. There are no financial covenants under the Revolving Credit Agreement with which the Company must comply.

As of May 31, 2024 and August 31, 2023, the Company had no outstanding balance and $45.0 million of availability remaining under the Revolving Credit Agreement. For additional information, see “Note 4. Related Party Transactions.”

Note 7. (Loss) Income Per Share

The net income (loss) per share attributable to common stockholders is allocated based on the contractual participation rights of the Class A common stock and Class B common stock as if the income for the year had been distributed. As the liquidation and dividend rights for Class A and Class B common stock are identical, the net loss attributable to all common stockholders is allocated on a proportionate basis.

The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share:


	Three Months Ended May 31,										Nine Months Ended May 31,
	2024						2023					2024						2023
	Class A			Class B			Class A		Class B			Class A			Class B			Class A			Class B
	(amounts in thousands, except per share data)
Net income (loss) attributable to common stockholders	$	(508	)	$	(50	)	$	1,520	$	160		$	(3,280	)	$	(323	)	$	(1,281	)	$	(142	)

Net income (loss) attributable to common stockholders – diluted	$	(508	)	$	(50	)	$	1,525	$	155		$	(3,280	)	$	(323	)	$	(1,281	)	$	(142	)

Weighted average common shares outstanding – basic		10,188			1,000			9,485		1,000			10,167			1,000			9,028			1,000
Dilutive effect of stock-based awards		—			—			322		—			—			—			—			—
Weighted average common shares outstanding – diluted		10,188			1,000			9,807		1,000			10,167			1,000			9,028			1,000

Net income (loss) per share attributable to common stockholders – basic	$	(0.05	)	$	(0.05	)	$	0.16	$	0.16		$	(0.32	)	$	(0.32	)	$	(0.14	)	$	(0.14	)
Net income (loss) per share attributable to common stockholders – diluted	$	(0.05	)	$	(0.05	)	$	0.16	$	0.16		$	(0.32	)	$	(0.32	)	$	(0.14	)	$	(0.14	)

The Company computes basic income (loss) per common share using net income (loss) and the weighted average number of common shares outstanding during the period, and computes diluted income (loss) per common share using net income (loss) and the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include dilutive outstanding employee stock options and restricted stock units.

For the three and nine months ended May 31, 2024, there were 662 thousand shares of common stock subject to outstanding employee stock options and RSUs that were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive. For the three months ended May 31, 2023 , there were 201 thousand shares of common stock subject to outstanding employee stock options and RSUs that were excluded from the calculation of diluted income per share because their inclusion would have been anti-dilutive. For the nine months ended May 31, 2023, there were 729 thousand shares of common stock subject to outstanding employee stock options and RSUs that were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive.

Note 8. Commitments and Contingencies

On January 19, 2024, two former employees initiated arbitration against the Company. Subsequently, on February 26, 2024, three additional former employees initiated a separate arbitration against the Company. Both sets of claimants allege violations of the Fair Labor Standards Act (“FLSA”) and violations of certain Washington, D.C. wage laws. Each arbitration will proceed separately. The Company recorded an accrued liability of $0.6 million related to these matters within general and administrative expenses in the statements of operations during the three months ended May 31, 2024, as the liability associated with these matters became probable and reasonably estimable based on information available to the Company. As the Company receives new information, it will reevaluate its estimated liability, which may exceed the amount accrued and could adversely affect the Company’s financial position, results of operations or cash flows.

The Company is involved from time to time in various legal proceedings that arise in the ordinary course of business, including but not limited to commercial disputes, environmental matters, employee related claims, intellectual property disputes and litigation in connection with transactions, including acquisitions and divestitures. In the opinion of management, the Company does not believe that such litigation, claims, and administrative proceedings will have a material adverse effect on its business, financial position, results of operations or cash flows. However, a significant increase in the number of these claims or an increase in amounts owing under successful claims, including the putative class action referenced above, could materially and adversely affect its business, financial condition, results of operations or cash flows. The Company records a liability when a loss is considered probable, and the amount can be reasonably estimated.

Note 9. Income Taxes

The Company recorded an income tax expense of $60 thousand and $41 thousand for the three months ended May 31, 2024 and May 31, 2023, respectively and income tax expense of $148 thousand and $66 thousand for the nine months ended May 31, 2024 and May 31, 2023, respectively. The Company’s effective tax rates for the three and nine months ended May 31, 2024 substantially differed from the federal statutory tax rate of 21% primarily due to a valuation allowance for the Company’s deferred tax assets and permanent difference related to employer tip credit.

The Company continually monitors and performs an assessment of the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of deferred tax assets using a “more likely than not” standard. In making such assessment, more weight was given to evidence that could be objectively verified, including recent cumulative losses. Based on the Company’s review of this evidence, management determined that a full valuation allowance against all of the Company’s net deferred tax assets at May 31, 2024 was appropriate.

Note 10. Fair Value Measurements

The following table sets forth the Company’s assets measured at fair value on a recurring basis as of May 31, 2024.


	Level 1		Level 2		Level 3		Total
	(amounts in thousands)
Assets:
Certificates of deposits	$	—	$	1,250	$	—	$	1,250
Treasury bills		—		—		—		—
Total assets at fair value	$	—	$	1,250	$	—	$	1,250

The Company’s cash and cash equivalents include cash on hand, deposits in banks, certificates of deposits and money market funds. Due to their short-term nature, the carrying amounts reported in the accompanying balance sheets approximate the fair value of cash and cash equivalents. The fair value of our certificates of deposits are considered using Level 2 inputs of the fair value hierarchy. Level 2 inputs are based on market data that include factors such as interest rates, market and pricing activity and other market-based valuation techniques. The Company determines realized gains or losses on the available-for-sale debt securities on a specific identification method basis.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited financial statements and the related notes included in this Quarterly Report on Form 10-Q and with the audited financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2023 (the “Annual Report”).

In addition to historical information, the following discussion and analysis contains forward-looking statements, such as statements about our plans, objectives, expectations, and intentions, which are based on current expectations and that involve risks, uncertainties and assumptions as set forth and described in the “Special Note Regarding Forward-Looking Statements” and “Risk Factors” sections of the Annual Report. You should review those sections in our Annual Report for a discussion of important factors, including the continuing development of our business and other factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in this Quarterly Report on Form 10-Q.

“Kura Sushi USA,” “Kura Sushi,” “Kura,” “we,” “us,” “our,” “our company” and the “Company” refer to Kura Sushi USA, Inc. unless expressly indicated or the context otherwise requires.

Overview

Kura Sushi USA is a technology-enabled Japanese restaurant concept that provides guests with a distinctive dining experience by serving authentic Japanese cuisine through an engaging revolving sushi service model, which we refer to as the “Kura Experience.” We encourage healthy lifestyles by serving freshly prepared Japanese cuisine using high-quality ingredients that are free from artificial seasonings, sweeteners, colorings, and preservatives. We aim to make quality Japanese cuisine accessible to our guests across the United States through affordable prices and an inviting atmosphere.

Business Trends

During the nine months ended May 31, 2024, we opened 13 restaurants and expanded our restaurant base to 63 restaurants in seventeen states and Washington, DC. We expect to open a total of 14 new restaurants in fiscal year 2024 and therefore, we expect our revenue and restaurant operating costs to increase in fiscal year 2024. We also expect our general and administrative expenses to increase on a dollar basis in fiscal 2024 to support the growth of the company and the compliance requirements of no longer being an emerging growth company.

We have experienced inflationary pressures affecting our operations in certain areas such as labor, repairs and maintenance, restaurant supplies and energy costs. We have been able to partially offset these inflationary and other cost pressures to some extent through various actions, such as increasing menu prices, productivity improvements, and supply chain initiatives. Although inflation has moderated so far in 2024, inflation may continue to affect our results in the near future. In addition, our restaurant sales have softened since mid-April due to macroeconomic conditions of lower consumer spending.

Key Financial Definitions

Sales. Sales represent sales of food and beverages in restaurants. Restaurant sales in a given period are directly impacted by the number of restaurants we operate and comparable restaurant sales performance.

Food and beverage costs. Food and beverage costs are variable in nature, change with sales volume and are influenced by menu mix and subject to increases or decreases based on fluctuations in commodity costs. Other important factors causing fluctuations in food and beverage costs include seasonality and restaurant-level management of food waste. Food and beverage costs are a substantial expense and are expected to grow proportionally as our sales grow.

Labor and related expenses. Labor and related expenses include all restaurant-level management and hourly labor costs, including wages, employee benefits and payroll taxes. Similar to the food and beverage costs that we incur, labor and related expenses are expected to grow proportionally as our sales grow. Factors that influence fluctuations in our labor and related expenses include minimum wage and payroll tax legislation, the frequency and severity of workers’ compensation claims, healthcare costs and the performance of our restaurants.

Occupancy and related expenses. Occupancy and related expenses include rent for all restaurant locations and related taxes.

Depreciation and amortization expenses. Depreciation and amortization expenses are periodic non-cash charges that consist of depreciation of fixed assets, including equipment and capitalized leasehold improvements. Depreciation is determined using the straight-line method over the assets’ estimated useful lives, which range from three to 20 years.

Other costs. Other costs include credit card processing fees, repairs and maintenance, restaurant-level advertising and promotions, restaurant supplies, royalty payments to Kura Japan, stock-based compensation for restaurant-level employees, utilities and other restaurant-level expenses.

General and administrative expenses. General and administrative expenses include expenses associated with corporate and regional supervision functions that support the operations of existing restaurants and development of new restaurants, including compensation and benefits, travel expenses, stock-based compensation for corporate-level employees, legal and professional fees, marketing costs, information systems, corporate office rent and other related corporate costs. General and administrative expenses are expected to grow as our unit base grows.

Interest expense. Interest expense includes cash and non-cash charges related to our line of credit and finance lease obligations.

Interest income. Interest income includes income earned on our money market funds.

Income tax expense (benefit). Provision for income taxes represents federal, state and local current and deferred income tax expense (benefit).

Results of Operations

The following tables present selected comparative results of operations for the three and nine months ended May 31, 2024 and May 31, 2023. 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 to 100% due to rounding.


	Three Months Ended May 31,
	2024			2023			$ Change			% Change
	(dollar amounts in thousands)
Sales	$	63,082		$	49,238		$	13,844			28.1		%
Restaurant operating costs
Food and beverage costs		18,391			14,770			3,621			24.5
Labor and related costs		20,378			14,362			6,016			41.9
Occupancy and related expenses		4,318			3,554			764			21.5
Depreciation and amortization expenses		3,124			1,975			1,149			58.2
Other costs		9,076			6,165			2,911			47.2
Total restaurant operating costs		55,287			40,826			14,461			35.4
General and administrative expenses		8,857			7,012			1,845			26.3
Depreciation and amortization expenses		107			92			15			16.3
Total operating expenses		64,251			47,930			16,321			34.1
Operating (loss) income		(1,169	)		1,308			(2,477	)		(189.4	)
Other expense (income):
Interest expense		15			23			(8	)		(34.8	)
Interest income		(686	)		(436	)		(250	)		57.3
(Loss) income before income taxes		(498	)		1,721			(2,219	)		(128.9	)
Income tax expense		60			41			19			46.3
Net (loss) income	$	(558	)	$	1,680		$	(2,238	)		133.2		%


	Nine Months Ended May 31,
	2024			2023			$ Change			% Change
	(dollar amounts in thousands)
Sales	$	171,848		$	132,500		$	39,348			29.7		%
Restaurant operating costs
Food and beverage costs		50,691			40,440			10,251			25.3
Labor and related costs		55,409			40,751			14,658			36.0
Occupancy and related expenses		12,179			9,504			2,675			28.1
Depreciation and amortization expenses		8,294			5,309			2,985			56.2
Other costs		25,023			17,352			7,671			44.2
Total restaurant operating costs		151,596			113,356			38,240			33.7
General and administrative expenses		25,634			20,776			4,858			23.4
Depreciation and amortization expenses		318			265			53			20.0
Total operating expenses		177,548			134,397			43,151			32.1
Operating loss		(5,700	)		(1,897	)		(3,803	)		(200.5	)
Other expense (income):
Interest expense		35			53			(18	)		(34.0	)
Interest income		(2,280	)		(593	)		(1,687	)		284.5
Loss before income taxes		(3,455	)		(1,357	)		(2,098	)		154.6
Income tax expense		148			66			82			124.2
Net loss	$	(3,603	)	$	(1,423	)	$	(2,180	)		153.2		%


	Three Months Ended May 31,								Nine Months Ended May 31,
	2024				2023				2024				2023
	(as a percentage of sales)
Sales		100.0		%		100.0		%		100.0		%		100.0		%
Restaurant operating costs
Food and beverage costs		29.2				30.0				29.5				30.5
Labor and related costs		32.3				29.2				32.2				30.8
Occupancy and related expenses		6.8				7.2				7.1				7.2
Depreciation and amortization expenses		5.0				4.0				4.8				4.0
Other costs		14.4				12.5				14.6				13.1
Total restaurant operating costs		87.6				82.9				88.2				85.6
General and administrative expenses		14.0				14.2				14.9				15.7
Depreciation and amortization expenses		0.2				0.2				0.2				0.2
Total operating expenses		101.8				97.3				103.3				101.5
Operating (loss) income		(1.8	)			2.7				(3.3	)			(1.6	)
Other expense (income):
Interest expense		-				-				-				-
Interest income		(1.1	)			(0.9	)			(1.3	)			(0.4	)
(Loss) income before income taxes		(0.7	)			3.6				(2.0	)			(1.2	)
Income tax expense		0.1				0.1				0.1				—
Net (loss) income		(0.8	)	%		3.5		%		(2.1	)	%		(1.2	)	%

Three Months Ended May 31, 2024 Compared to Three Months Ended May 31, 2023

Sales. Sales were $63.1 million for the three months ended May 31, 2024 compared to $49.2 million for the three months ended May 31, 2023, representing an increase of $13.9 million, or 28.1%. The increase in sales was primarily driven by the sales resulting from seventeen new restaurants opened subsequent to May 31, 2023, as well as increases in menu prices during the same period. Comparable restaurant sales increased 0.6% for the three months ended May 31, 2024, as compared to the three months ended May 31, 2023.

Food and beverage costs. Food and beverage costs were $18.4 million for the three months ended May 31, 2024 compared to $14.8 million for the three months ended May 31, 2023, representing an increase of $3.6 million, or 24.5%. The increase in food and beverage costs was primarily driven by costs associated with sales from seventeen new restaurants opened subsequent to May 31, 2023. As a percentage of sales, food and beverage costs decreased to 29.2% in the three months ended May 31, 2024 as compared to 30.0% in the three months ended May 31, 2023, primarily due to increases in menu prices and supply chain initiatives.

Labor and related costs. Labor and related costs were $20.4 million for the three months ended May 31, 2024 compared to $14.4 million for the three months ended May 31, 2023, representing an increase of $6.0 million, or 41.9%. This increase in labor and related costs was primarily driven by additional labor costs incurred from seventeen new restaurants opened subsequent to May 31, 2023. As a percentage of sales, labor and related costs increased to 32.3% in the three months ended May 31, 2024 as compared to 29.2% in the three months ended May 31, 2023. The increase in cost as a percentage of sales was primarily due to increases in wage rates and higher pre-opening labor costs.

Occupancy and related expenses. Occupancy and related expenses were $4.3 million for the three months ended May 31, 2024 compared to $3.6 million for the three months ended May 31, 2023, representing an increase of $0.7 million, or 21.5%. The increase was primarily a result of additional lease expense related to the opening of seventeen new restaurants subsequent to May 31, 2023. As a percentage of sales, occupancy and related expenses decreased to 6.8% in the three months ended May 31, 2024 as compared to 7.2% in the three months ended May 31, 2023, primarily driven by leverage benefits from the increase in sales.

Depreciation and amortization expenses. Depreciation and amortization expenses incurred as part of restaurant operating costs were $3.1 million for the three months ended May 31, 2024 compared to $2.0 million for the three months ended May 31, 2023, representing an increase of $1.1 million, or 58.2%. The increase consists of depreciation of property and equipment related to the seventeen new restaurants that opened subsequent to May 31, 2023. As a percentage of sales, depreciation and amortization expenses at the restaurant level increased to 5.0% in the three months ended May 31, 2024 as compared to 4.0% in the three months ended May 31, 2023, primarily driven by increases in depreciation and amortization due to the new restaurants opened as well as accelerated depreciation on planned restaurant remodels. Depreciation and amortization expenses incurred at the corporate level were $0.1 million for both the three months ended May 31, 2024 and May 31, 2023, and as a percentage of sales were both 0.2%, respectively.

Other costs. Other costs were $9.1 million for the three months ended May 31, 2024 compared to $6.2 million for the three months ended May 31, 2023, representing an increase of $2.9 million, or 47.2%. The increase was primarily driven by an increase in costs related to the seventeen new restaurants that opened subsequent to May 31, 2023. As a percentage of sales, other costs increased to 14.4% in the three months ended May 31, 2024 as compared to 12.5% in the three months ended May 31, 2023, primarily driven by advertising and promotion, software licenses, repairs and maintenance, utilities, operating supplies and travel expenses.

General and administrative expenses. General and administrative expenses were $8.9 million for the three months ended May 31, 2024 compared to $7.0 million for the three months ended May 31, 2023, representing an increase of $1.9 million, or 26.3%. This increase was primarily due to increases in $0.7 million in professional fees, $0.6 million in litigation accrual, compensation-related costs of $0.4 million due to additional headcount and $0.2 million in travel expenses. As a percentage of sales, general and administrative expenses decreased to 14.0% in the three months ended May 31, 2024 as compared to 14.2% in the three months ended May 31, 2023, primarily driven by leverage benefits from the increase in sales.

Interest expense. Interest expense was $15 thousand for the three months ended May 31, 2024 compared to $23 thousand for the three months ended May 31, 2023, respectively.

Interest income. Interest income was $686 thousand for the three months ended May 31, 2024 compared to $436 thousand for the three months ended May 31, 2023. The increase was primarily driven by investing our net cash proceeds from our $64.3 million follow-on offering completed in April 2023 into cash and cash equivalents and short-term investments.

Income tax expense. Income tax expense was $60 thousand for the three months ended May 31, 2024 compared to an income tax expense of $41 thousand for the three months ended May 31, 2023. For further discussion of our income taxes, see “Note 9. Income Taxes” in the Notes to Condensed Financial Statements.

Nine Months Ended May 31, 2024 Compared to Nine Months Ended May 31, 2023

Sales. Sales were $171.8 million for the nine months ended May 31, 2024 compared to $132.5 million for the nine months ended May 31, 2023, representing an increase of $39.3 million, or 29.7%. The increase in sales was primarily driven by the sales resulting from seventeen new restaurants opened subsequent to May 31, 2023, as well as increases in menu prices during the same period. Comparable restaurant sales increased 2.4% for the nine months ended May 31, 2024, as compared to the nine months ended May 31, 2023.

Food and beverage costs. Food and beverage costs were $50.7 million for the nine months ended May 31, 2024 compared to $40.4 million for the nine months ended May 31, 2023, representing an increase of $10.3 million, or 25.3%. The increase in food and beverage costs was primarily driven by costs associated with sales from seventeen new restaurants opened subsequent to May 31, 2023. As a percentage of sales, food and beverage costs decreased to 29.5% in the nine months ended May 31, 2024 as compared to 30.5% in the nine months ended May 31, 2023, primarily due to increases in menu prices and supply chain initiatives.

Labor and related costs. Labor and related costs were $55.4 million for the nine months ended May 31, 2024 compared to $40.8 million for the nine months ended May 31, 2023, representing an increase of $14.6 million, or 36.0%. This increase in labor and related costs was primarily driven by additional labor costs incurred from seventeen new restaurants opened subsequent to May 31, 2023. As a percentage of sales, labor and related costs increased to 32.2% in the nine months ended May 31, 2024 as compared to 30.8% in the nine months ended May 31, 2023. The increase in cost as a percentage of sales was primarily due to increases in wage rates and higher pre-opening labor costs.

Occupancy and related expenses. Occupancy and related expenses were $12.2 million for the nine months ended May 31, 2024 compared to $9.5 million for the nine months ended May 31, 2023, representing an increase of $2.7 million, or 28.1%. The increase was primarily a result of additional lease expense related to the opening of seventeen new restaurants opened subsequent to May 31, 2023. As a percentage of sales, occupancy and related expenses remained consistent at 7.1% in the nine months ended May 31, 2024, compared to 7.2% in the nine months ended May 31, 2023.

Depreciation and amortization expenses. Depreciation and amortization expenses incurred as part of restaurant operating costs were $8.3 million for the nine months ended May 31, 2024 compared to $5.3 million for the nine months ended May 31, 2023, representing an increase of $3.0 million, or 56.2%. The increase consists of depreciation of property and equipment related to seventeen new restaurants opened subsequent to May 31, 2023. As a percentage of sales, depreciation and amortization expenses at the restaurant level increased to 4.8% for the nine months ended May 31, 2024 as compared to 4.0% for the nine months ended May 31, 2023, primarily driven by increases in depreciation and amortization due to the new restaurants opened as well as accelerated depreciation on planned restaurant remodels. Depreciation and amortization expenses incurred at the corporate level were $0.3 million for the nine months ended May 31, 2024 and May 31, 2023, and as a percentage of sales were both 0.2%, respectively.

Other costs. Other costs were $25.0 million for the nine months ended May 31, 2024 compared to $17.4 million for the nine months ended May 31, 2023, representing an increase of $7.6 million, or 44.2%. The increase was primarily driven by an increase in costs related to seventeen new restaurants opened subsequent to May 31, 2023. As a percentage of sales, other costs increased to 14.6% in the nine months ended May 31, 2024 from 13.1% in the nine months ended May 31, 2023, primarily driven by operating supplies, advertising and promotion, software licenses, repairs and maintenance, travel expenses and utilities.

General and administrative expenses. General and administrative expenses were $25.6 million for the nine months ended May 31, 2024 compared to $20.8 million for the nine months ended May 31, 2023, representing an increase of $4.8 million, or 23.4%. This increase was primarily due to increases in compensation related costs of $1.9 million due to additional headcount, $1.4 million in professional fees, $0.8 million in litigation accrual, $0.4 million in travel expenses and $0.3 in accounts with differences under $0.1 million. As a percentage of sales, general and administrative expenses decreased to 14.9% in the nine months ended May 31, 2024 from 15.7% in the nine months ended May 31, 2023, primarily driven by leverage benefits from the increase in sales.

Interest expense. Interest expense was $35 thousand for the nine months ended May 31, 2024 compared to $53 thousand for the nine months ended May 31, 2023.

Interest income. Interest income was $2.3 million for the nine months ended May 31, 2024 compared to $0.6 million for the nine months ended May 31, 2023. The increase was primarily driven by investing our net cash proceeds from our $64.3 million follow-on offering completed in April 2023 into cash and cash equivalents and short-term investments.

Income tax expense. Income tax expense was $148 thousand for the nine months ended May 31, 2024 compared to $66 thousand for the nine months ended May 31, 2023. For further discussion of our income taxes, see “Note 9. Income Taxes” in the Notes to Condensed Financial Statements.

Key Performance Indicators

In assessing the performance of our business, we consider a variety of financial and performance measures. The key measures for determining how our business is performing include sales, EBITDA, Adjusted EBITDA, Restaurant-level Operating Profit, Restaurant-level Operating Profit margin, comparable restaurant sales performance, and the number of restaurant openings.

Sales

Sales represents sales of food and beverages in restaurants, as shown on our statements of operations and comprehensive income (loss). Several factors affect our restaurant sales in any given period, including the number of restaurants in operation, guest traffic and average check.

EBITDA and Adjusted EBITDA

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 accrual 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.

We believe that the use of EBITDA, Adjusted EBITDA and Adjusted EBITDA margin provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware when evaluating EBITDA, Adjusted EBITDA and Adjusted EBITDA margin that in the future we may incur expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate Adjusted EBITDA and Adjusted EBITDA margin in the same fashion.

Because of these limitations, EBITDA, Adjusted EBITDA and Adjusted EBITDA margin should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA, Adjusted EBITDA and Adjusted EBITDA margin on a supplemental basis. You should review the reconciliation of net income (loss) to EBITDA, Adjusted EBITDA and Adjusted EBITDA margin below and not rely on any single financial measure to evaluate our business.

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


	Three Months Ended May 31,						Nine Months Ended May 31,
	2024			2023			2024			2023
	(amounts in thousands)
Net (loss) income	$	(558	)	$	1,680		$	(3,603	)	$	(1,423	)
Interest income, net		(671	)		(413	)		(2,245	)		(540	)
Income tax expense		60			41			148			66
Depreciation and amortization expenses		3,231			2,067			8,612			5,574
EBITDA		2,062			3,375			2,912			3,677
Stock-based compensation expense(a)		1,197			975			3,169			2,570
Non-cash lease expense(b)		630			768			2,220			1,818
Litigation accrual(c)		562			—			767			—
Adjusted EBITDA	$	4,451		$	5,118		$	9,068		$	8,065
Adjusted EBITDA margin		7.1	%		10.4	%		5.3	%		6.1	%

(a)

Stock-based compensation expense includes non-cash stock-based compensation, which is comprised of restaurant-level stock-based compensation included in other costs and of corporate-level stock-based compensation included in general and administrative expenses in the 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.

(b)

Non-cash lease expense includes lease expense from the date of possession of our restaurants that did not require cash outlay in the respective periods.

(c)

Litigation accrual includes accruals related to legal claims or settlements.

Restaurant-level Operating Profit and Restaurant-level Operating Profit Margin

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.

We present Restaurant-level Operating Profit (Loss) because it excludes the impact of general and administrative expenses, which are not incurred at the restaurant level. We also use Restaurant-level Operating Profit (Loss) to measure operating performance and returns from opening new restaurants. Restaurant-level Operating Profit (Loss) margin allows us to evaluate the level of Restaurant-level Operating Profit (Loss) generated from sales.

However, you should be aware that Restaurant-level Operating Profit (Loss) and Restaurant-level Operating Profit (Loss) margin are financial measures that are not indicative of overall results for the Company, and Restaurant-level Operating Profit (Loss) and Restaurant-level Operating Profit (Loss) margin do not accrue directly to the benefit of stockholders because of corporate-level expenses excluded from such measures.

In addition, when evaluating Restaurant-level Operating Profit (Loss) and Restaurant-level Operating Profit (Loss) margin, you should be aware that in the future we may incur expenses similar to those excluded when calculating these measures. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Restaurant-level Operating Profit (Loss) and Restaurant-level Operating Profit (Loss) margin may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate Restaurant-level Operating Profit (Loss) and Restaurant-level Operating Profit (Loss) margin in the same fashion. Restaurant-level Operating Profit (Loss) and Restaurant-level Operating Profit (Loss) margin have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.

The following table reconciles operating loss to Restaurant-level Operating Profit and Restaurant-level Operating Profit margin:


	Three Months Ended May 31,						Nine Months Ended May 31,
	2024			2023			2024			2023
	(amounts in thousands)
Operating (loss) income	$	(1,169	)	$	1,308		$	(5,700	)	$	(1,897	)
Depreciation and amortization expenses		3,231			2,067			8,612			5,574
Stock-based compensation expense(a)		1,197			975			3,169			2,570
Pre-opening costs(b)		861			258			2,611			1,011
Non-cash lease expense(c)		630			768			2,220			1,818
General and administrative expenses		8,857			7,012			25,634			20,776
Corporate-level stock-based compensation in general and administrative expenses		(1,003	)		(812	)		(2,672	)		(2,188	)
Restaurant-level operating profit	$	12,604		$	11,576		$	33,874		$	27,664
Operating (loss) income margin		(1.9	)%		2.7	%		(3.3	)%		(1.4	)%
Restaurant-level operating profit margin		20.0	%		23.5	%		19.7	%		20.9	%

(a)

(b)

Pre-opening costs consist of labor costs and travel expenses for new employees and trainers during the training period, recruitment fees, legal fees, cash-based lease expenses incurred between the date of possession and the opening day of our restaurants, and other related pre-opening costs.

(c)

Non-cash lease expense includes lease expense from the date of possession of our restaurants that did not require cash outlay in the respective periods.

Comparable Restaurant Sales Performance

Comparable restaurant sales performance refers to the change in year-over-year sales for the comparable restaurant base. We include restaurants in the comparable restaurant base that have been in operation for at least 18 months prior to the start of the accounting period presented due to new restaurants experiencing a period of higher sales upon opening. For restaurants that were temporarily closed for consecutive days, which primarily occurs during renovations, the comparative period was also adjusted.

Measuring our comparable restaurant sales performance allows us to evaluate the performance of our existing restaurant base. Various factors impact comparable restaurant sales, including:

•

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

•

overall economic trends, particularly those related to consumer spending;

•

our ability to operate restaurants effectively and efficiently to meet consumer expectations;

•

pricing;

•

guest traffic;

•

per-guest spend and average check;

•

marketing and promotional efforts;

•

local competition; and

•

opening of new restaurants in the vicinity of existing locations.

Since opening new restaurants will be a significant component of our sales growth, comparable restaurant sales performance is only one measure of how we evaluate our performance. The following table shows the comparable restaurant sales performance:


	Three Months Ended May 31,		Nine Months Ended May 31,
	2024	2023	2024	2023
Comparable restaurant sales performance (%)	0.6%	10.3%	2.4%	11.0%
Comparable restaurant base	40	32	36	30

Number of Restaurant Openings

The number of restaurant openings reflects the number of restaurants opened during a particular reporting period. Before we open new restaurants, we incur pre-opening costs. New restaurants may not be profitable, and their sales performance may not follow historical patterns. The number and timing of restaurant openings has had, and is expected to continue to have, an impact on our results of operations. The following table shows the growth in our restaurant base:


	Three Months Ended May 31,				Nine Months Ended May 31,
	2024		2023		2024		2023
Restaurant activity:
Beginning of period		59		45		50		40
Openings		4		1		13		6
End of period		63		46		63		46

Liquidity and Capital Resources

Our primary uses of cash are for operational expenditures and capital investments, including new restaurants, costs incurred for restaurant remodels and restaurant fixtures.

On April 13, 2023, we completed an underwritten public offering of common stock pursuant to our universal shelf registration statement on Form S-3, selling an aggregate of 1,265,000 shares of Class A common stock, including the exercise in full of the underwriters’ option to purchase 165,000 additional shares, at the price of $54.00 per share less an underwriting discount of $2.70 per share. We received aggregate net proceeds of $64.3 million after deducting the underwriting discounts and commissions and offering expenses payable by us. The proceeds will be used for general corporate purposes, including capital expenditures, working capital, and

other business purposes. We made no payments to directors, officers or persons owning 10% or more of our common stock or to their associates, or to our affiliates.

During the nine months ended May 31, 2024, we had no borrowings under the Revolving Credit Agreement and have $45.0 million of availability remaining. As of May 31, 2024, we did not have any material off-balance sheet arrangements.

The significant components of our working capital are liquid assets such as cash, cash equivalents, receivables and short-term investments reduced by accounts payable and accrued expenses. Our working capital position benefits from the fact that we generally collect cash from sales to guests the same day or, in the case of credit or debit card transactions, within several days of the related sale, while we typically have longer payment terms with our vendors.

We believe that cash provided by operating activities, cash on hand, cash equivalents, short-term investments and availability under our existing Revolving Credit Agreement, will be sufficient to fund our lease obligations, capital expenditures and working capital needs for at least the next 12 months.

Summary of Cash Flows

Our primary sources of liquidity and cash flows are operating cash flows, cash on hand, cash equivalents and short-term investments. We use this to fund investing expenditures for new restaurant openings, reinvest in our existing restaurants, and our working capital. Our working capital position benefits from the fact that we generally collect cash from sales to guests the same day, or in the case of credit or debit card transactions, within several days of the related sale, and we typically have at least 30 days to pay our vendors.

The following table summarizes our cash flows for the periods presented:


	Nine Months Ended May 31,
	2024			2023
Statement of Cash Flow data:	(amounts in thousands)
Net cash provided by operating activities	$	14,943		$	7,063
Net cash used in investing activities	$	(27,257	)	$	(37,231	)
Net cash provided by financing activities	$	2,022		$	64,860

Cash Flows Provided by Operating Activities

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.

Net cash provided by operating activities during the nine months ended May 31, 2023 was $7.1 million, which results from a net loss of $1.4 million, non-cash charges of $5.6 million for depreciation and amortization, $2.6 million for stock-based compensation, and $2.8 million in non-cash lease expense, and net cash outflows of $2.5 million from changes in operating assets and liabilities.

Cash Flows Used in Investing Activities

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 of redemption 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 and renovations, maintaining our existing restaurants and other projects.

Net cash used in investing activities during the nine months ended May 31, 2023 was $37.2 million, primarily due to $8.7 million in purchases of short-term investments, $27.2 million in purchases of property and equipment and $0.9 million in purchases of liquor licenses. The purchases of property and equipment in the nine months ended May 31, 2023 is primarily related to capital expenditures for current and future restaurant openings and renovations, maintaining our existing restaurants and other projects.

Cash Flows Provided by Financing Activities

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.

Net cash provided by financing activities during the nine months ended May 31, 2023 was $64.9 million and is primarily due to aggregate net proceeds of $64.3 million after deducting the underwriting discounts and commissions and offering expenses payable, and $1.0 million of proceeds from exercise of stock options offset by $0.4 million in repayments of principal on finance leases.

Material Cash Requirements

As of May 31, 2024, we had $13.0 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 operations. For operating and finance lease obligations, see “Note 3. Leases” in the Notes to Condensed Financial Statements included in this Quarterly Report on Form 10-Q.

Recent Accounting Pronouncement

For a description of our recently adopted accounting pronouncement, including the respective date of adoption and expected effect on our results of operations and financial condition, see “Part I, Item 1, Note 1. Organization and Basis of Presentation” of the Notes to Condensed Financial Statements included in this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Estimates

Our discussion and analysis of operating results and financial condition are based on our financial statements. Preparing our financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses and related disclosures of contingent assets and liabilities. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.

Our critical accounting policies are those that materially affect our financial statements. Our critical accounting estimates are those that involve subjective or complex judgments by management. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may be materially different from the estimates. We believe the assessment of potential impairments of long-lived assets is affected by significant judgments and estimates used in the preparation of our financial statements and that the judgments and estimates are reasonable.

There have been no material changes in our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10‑K for the fiscal year ended August 31, 2023. Please refer to “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” of our Annual Report on Form 10‑K for the fiscal year ended August 31, 2023 for a discussion of our critical accounting policies and estimates.

Jumpstart Our Business Startups Act of 2012

We qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

Subject to certain conditions set forth in the JOBS Act, we are also eligible for and intend to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We may take advantage of these exemptions until we are no longer an emerging growth company. We will continue to be an emerging growth company until the earliest to occur of (i) the last day of the fiscal year in which the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of June 30 of that fiscal year, (ii) the last day of the fiscal year in which our annual gross revenues exceed $1.235 billion during such fiscal year (as indexed for inflation), (iii) the date on which we have issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) the last day of the fiscal year following the fifth anniversary of the date of the completion of our initial public offering, or August 31, 2024.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes to our market risk during the nine months ended May 31, 2024. For a discussion of our exposure to market risk, refer to our market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our 2023 Form 10-K.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our management carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

For a description of our legal proceedings, see Part I, Item 1, Note 8 – Commitments and Contingencies, of the Notes to Condensed Financial Statements of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 1A. Risk Factors.

A description of the risk factors associated with our business is contained in the “Risk Factors” section of our Annual Report on Form 10-K for our fiscal year ended August 31, 2023. There have been no material changes to our Risk Factors as therein previously reported.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

During the nine months ended May 31, 2024, no director or officer of the Company, adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits.


Exhibit Number		Description

31.1*		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

104		Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	KURA SUSHI USA, INC.

Date: July 9, 2024	By:	/s/ Jeffrey Uttz
		Jeffrey Uttz
		Chief Financial Officer (Principal Financial Officer)

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Hajime Uba, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Kura Sushi USA, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: July 9, 2024	/s/ Hajime Uba
	Hajime Uba
	Chairman, President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey Uttz, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Kura Sushi USA, Inc.;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: July 9, 2024	/s/ Jeffrey Uttz
	Jeffrey Uttz
	Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Kura Sushi USA, Inc. (the “Company”) on Form 10-Q for the period ending May 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


Dated: July 9, 2024	By:	/s/ Hajime Uba
		Hajime Uba
		Chairman, President and Chief Executive Officer

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


Dated: July 9, 2024	By:	/s/ Jeffrey Uttz
		Jeffrey Uttz
		Chief Financial Officer

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	May 31, 2024	Jul. 02, 2024
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 31, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Title of 12(b) Security	Class A Common Stock, $0.001 par value per share
Trading Symbol	KRUS
Security Exchange Name	NASDAQ
Entity Registrant Name	KURA SUSHI USA, INC.
Entity Central Index Key	0001772177
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--08-31
Entity Filer Category	Accelerated Filer
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity File Number	001-39012
Entity Tax Identification Number	26-3808434
Entity Address, Address Line One	17461 Derian Avenue
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Irvine
Entity Address, State or Province	CA
Entity Incorporation, State or Country Code	DE
Entity Address, Postal Zip Code	92614
City Area Code	657
Local Phone Number	333-4100
Document Quarterly Report	true
Document Transition Report	false
Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		10,244,893
Class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		1,000,050

Condensed Balance Sheets - USD ($) $ in Thousands	May 31, 2024	Aug. 31, 2023
Current assets:
Cash and cash equivalents	$ 59,405	$ 69,697
Short-term investments	1,250	8,542
Accounts and other receivables	5,510	5,048
Inventories	2,132	1,747
Prepaid expenses and other current assets	3,988	4,233
Total current assets	72,285	89,371
Non-current assets:
Property and equipment – net	130,663	106,427
Operating lease right-of-use assets	117,030	103,884
Deposits and other assets	4,753	4,977
Total assets	324,731	304,659
Current liabilities:
Accounts payable	8,063	7,248
Accrued expenses and other current liabilities	3,412	2,821
Salaries and wages payable	8,596	7,595
Operating lease liabilities – current	11,734	9,225
Sales tax payable	1,766	1,694
Total current liabilities	33,694	29,138
Non-current liabilities:
Operating lease liabilities – non-current	123,848	110,234
Other liabilities	763	646
Total liabilities	158,305	140,018
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, $0.001 par value; 1,000 shares authorized, no shares issued or outstanding
Additional paid-in capital	194,202	188,771
Accumulated deficit	(27,787)	(24,184)
Accumulated other comprehensive income	0	43
Total stockholders' equity	166,426	164,641
Total liabilities and stockholders' equity	324,731	304,659
Affiliated Entity [Member]
Current assets:
Due from affiliate		104
Current liabilities:
Due to affiliate	123	555
Class A
Stockholders' equity:
Common stock	10	10
Class B
Stockholders' equity:
Common stock	$ 1	$ 1

Condensed Balance Sheets (Parenthetical) - $ / shares	May 31, 2024	Aug. 31, 2023
Preferred stock, par value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	1,000,000	1,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Class A
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common Stock, Shares, Issued	10,243,000	10,147,000
Common stock, shares outstanding	10,243,000	10,147,000
Class B
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	10,000,000	10,000,000
Common Stock, Shares, Issued	1,000,000	1,000,000
Common stock, shares outstanding	1,000,000	1,000,000

Condensed Statements of Operations and Comprehensive (Loss) Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Sales	$ 63,082	$ 49,238	$ 171,848	$ 132,500
Restaurant operating costs:
Depreciation and amortization expenses	3,124	1,975	8,294	5,309
Other costs	9,076	6,165	25,023	17,352
Total restaurant operating costs	55,287	40,826	151,596	113,356
General and administrative expenses	8,857	7,012	25,634	20,776
Depreciation and amortization expenses	107	92	318	265
Total operating expenses	64,251	47,930	177,548	134,397
Operating (loss) income	(1,169)	1,308	(5,700)	(1,897)
Other expense (income):
Interest expense	15	23	35	53
Interest income	(686)	(436)	(2,280)	(593)
(Loss) income before income taxes	(498)	1,721	(3,455)	(1,357)
Income tax expense	60	41	148	66
Net (loss) income	$ (558)	$ 1,680	$ (3,603)	$ (1,423)
Net (loss) income per Class A and Class B shares
Basic	$ (0.05)	$ 0.16	$ (0.32)	$ (0.14)
Diluted	$ (0.05)	$ 0.16	$ (0.32)	$ (0.14)
Weighted average Class A and Class B shares outstanding
Basic	11,188	10,485	11,167	10,028
Diluted	11,188	10,807	11,167	10,028
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract]
Unrealized loss on short-term investments	$ (76)	$ (7)	$ (43)	$ (7)
Comprehensive (loss) income	(634)	1,673	(3,646)	(1,430)
Food and Beverage Costs
Restaurant operating costs:
Cost of goods and services sold	18,391	14,770	50,691	40,440
Labor and Related Costs
Restaurant operating costs:
Cost of goods and services sold	20,378	14,362	55,409	40,751
Occupancy and Related Expenses
Restaurant operating costs:
Cost of goods and services sold	$ 4,318	$ 3,554	$ 12,179	$ 9,504

Condensed Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Class A	Class B	Common Stock Class A	Common Stock Class B	Additional Paid-in-Capital	Accumulated Deficit	Accumulated Other Comprehensive Income
Beginning balances at Aug. 31, 2022	$ 93,294			$ 9	$ 1	$ 118,970	$ (25,686)
Beginning balance, shares at Aug. 31, 2022				8,788	1,000
Stock-based compensation	650					650
Employee stock plan	51					51
Employee stock plan, shares				3
Net income (loss)	(2,088)						(2,088)
Ending balances at Nov. 30, 2022	91,907			$ 9	$ 1	119,671	(27,774)
Ending balance, shares at Nov. 30, 2022				8,791	1,000
Beginning balances at Aug. 31, 2022	93,294			$ 9	$ 1	118,970	(25,686)
Beginning balance, shares at Aug. 31, 2022				8,788	1,000
Net income (loss)	(1,423)
Ending balances at May. 31, 2023	159,740			$ 10	$ 1	186,845	(27,109)	$ (7)
Ending balance, shares at May. 31, 2023				10,101	1,000
Beginning balances at Nov. 30, 2022	91,907			$ 9	$ 1	119,671	(27,774)
Beginning balance, shares at Nov. 30, 2022				8,791	1,000
Stock-based compensation	945					945
Employee stock plan	533					533
Employee stock plan, shares				28
Net income (loss)	(1,015)						(1,015)
Ending balances at Feb. 28, 2023	92,370			$ 9	$ 1	121,149	(28,789)
Ending balance, shares at Feb. 28, 2023				8,819	1,000
Stock-based compensation	975					975
Employee stock plan	423					423
Employee stock plan, shares				17
Issuance of common stock in connection with follow-on public offering, net of underwriter discounts and issuance costs	64,299			$ 1		64,298
Issuance of common stock in connection with follow-on public offering, net of underwriter discounts and issuance costs, shares				1,265
Net income (loss)	1,680						1,680
Other comprehensive income (loss)	(7)							(7)
Ending balances at May. 31, 2023	159,740			$ 10	$ 1	186,845	(27,109)	(7)
Ending balance, shares at May. 31, 2023				10,101	1,000
Beginning balances at Aug. 31, 2023	164,641			$ 10	$ 1	188,771	(24,184)	43
Beginning balance, shares at Aug. 31, 2023		10,147,000	1,000,000	10,147	1,000
Stock-based compensation	1,034					1,034
Employee stock plan	110					110
Employee stock plan, shares				8
Net income (loss)	(2,047)						(2,047)
Other comprehensive income (loss)	3							3
Ending balances at Nov. 30, 2023	163,741			$ 10	$ 1	189,915	(26,231)	46
Ending balance, shares at Nov. 30, 2023				10,155	1,000
Beginning balances at Aug. 31, 2023	164,641			$ 10	$ 1	188,771	(24,184)	43
Beginning balance, shares at Aug. 31, 2023		10,147,000	1,000,000	10,147	1,000
Net income (loss)	(3,603)
Ending balances at May. 31, 2024	166,426			$ 10	$ 1	194,202	(27,787)
Ending balance, shares at May. 31, 2024		10,243,000	1,000,000	10,243	1,000
Beginning balances at Nov. 30, 2023	163,741			$ 10	$ 1	189,915	(26,231)	46
Beginning balance, shares at Nov. 30, 2023				10,155	1,000
Stock-based compensation	1,080					1,080
Employee stock plan	1,427					1,427
Employee stock plan, shares				71
Net income (loss)	(998)						(998)
Other comprehensive income (loss)	30							30
Ending balances at Feb. 29, 2024	165,280			$ 10	$ 1	192,422	(27,229)	76
Ending balance, shares at Feb. 29, 2024				10,226	1,000
Stock-based compensation	1,236					1,236
Employee stock plan	544					544
Employee stock plan, shares				17
Net income (loss)	(558)						(558)
Other comprehensive income (loss)	(76)							$ (76)
Ending balances at May. 31, 2024	$ 166,426			$ 10	$ 1	$ 194,202	$ (27,787)
Ending balance, shares at May. 31, 2024		10,243,000	1,000,000	10,243	1,000

Condensed Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
Condensed Statements of Cash Flows - USD ($) $ in Thousands	May 31, 2024	May 31, 2023
Cash flows from operating activities
Net loss	$ (3,603)	$ (1,423)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization	8,612	5,574
Stock-based compensation, net of amounts capitalized	3,169	2,570
Loss on disposal of property and equipment		53
Non-cash lease expense	3,407	2,820
Changes in operating assets and liabilities:
Accounts and other receivables	(587)	(230)
Inventories	(385)	(267)
Due from affiliate	104	156
Prepaid expenses and other current assets	1,326	(1,876)
Deposits and other assets	443	122
Accounts payable	11	(71)
Accrued expenses and other current liabilities	1,485	(1,176)
Salaries and wages payable	1,001	977
Operating lease liabilities	3	(341)
Due to affiliate	(23)	26
Sales tax payable	(20)	149
Net cash provided by operating activities	14,943	7,063
Cash flows from investing activities
Payments for property and equipment	(33,977)	(27,215)
Payments for initial direct costs	(309)	(320)
Payments for purchases of liquor licenses	(219)	(947)
Purchases of short-term investments	(3,251)	(8,749)
Redemption of short- term investments	10,499
Net cash used in investing activities	(27,257)	(37,231)
Cash flows from financing activities
Repayment of principal on finance leases	(60)	(446)
Taxes paid on vested restricted stock awards	(217)
Proceeds from exercise of stock options	2,299	1,007
Proceeds from the follow-on public offering, net of discounts and commissions		64,895
Payments of costs related to the follow-on offering		(596)
Net cash provided by financing activities	2,022	64,860
Decrease in cash and cash equivalents	(10,292)	34,692
Cash and cash equivalents, beginning of period	69,697	35,782
Cash and cash equivalents, end of period	59,405	70,474
Supplemental disclosures of cash flow information
Cash paid for income taxes	282	185
Noncash investing activities
Amounts unpaid for purchases of property and equipment	$ 1,276	$ 1,706

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	May 31, 2024	Feb. 29, 2024	Nov. 30, 2023	May 31, 2023	Feb. 28, 2023	Nov. 30, 2022	May 31, 2024	May 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (558)	$ (998)	$ (2,047)	$ 1,680	$ (1,015)	$ (2,088)	$ (3,603)	$ (1,423)

Insider Trading Arrangements	9 Months Ended
Insider Trading Arrangements	May 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Organization and Basis of Presentation

9 Months Ended

May 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Note 1. Organization and Basis of Presentation

Basis of Presentation

Fiscal Year

Use of Estimates

Short-Term Investments

Comprehensive Income (Loss)

Recently Issued Accounting Pronouncements

Balance Sheet Components

9 Months Ended

May 31, 2024

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

Note 2. Balance Sheet Components

Accounts and Other Receivables


	May 31, 2024		August 31, 2023
	(amounts in thousands)
Lease receivables	$	3,813	$	3,973
Credit card and other receivables		1,697		1,075
Total accounts and other receivables	$	5,510	$	5,048

Property and Equipment - net


	May 31, 2024			August 31, 2023
	(amounts in thousands)
Leasehold improvements	$	97,827		$	75,472
Lease assets		6,229			6,247
Furniture and fixtures		49,114			34,213
Computer equipment		3,650			2,792
Vehicles		220			220
Software		1,017			1,016
Construction in progress		8,620			14,369
Property and equipment – gross		166,677			134,329
Less: accumulated depreciation and amortization		(36,014	)		(27,902	)
Total property and equipment – net	$	130,663		$	106,427

Leases

9 Months Ended

May 31, 2024

Leases [Abstract]

Leases

Note 3. Leases

Lease related costs recognized in the statements of operations and comprehensive income (loss) are as follows:




		Three Months Ended May 31,				Nine Months Ended May 31,
		2024		2023		2024		2023
		(amounts in thousands)
Operating lease cost	Classification
Operating lease cost	Occupancy and related expenses, other costs and general and administrative expenses	$	3,380	$	3,208	$	9,678	$	7,450
Variable lease cost	Occupancy and related expenses, and general and administrative expenses		992		1,072		2,567		2,307
Total operating lease cost		$	4,372	$	4,280	$	12,245	$	9,757

Supplemental balance sheet information related to leases is as follows:

Operating Leases


	May 31, 2024		August 31, 2023
	(amounts in thousands)
Right-of-use assets	$	117,030	$	103,884

Lease liabilities – current	$	11,734	$	9,225
Lease liabilities – non-current		123,848		110,234
Total lease liabilities	$	135,582	$	119,459



	Nine Months Ended May 31,
	2024			2023
Weighted Average Remaining Lease Term (Years)
Operating leases		16.5			16.3

Weighted Average Discount Rate
Operating leases		7.1	%		6.6	%

Supplemental disclosures of cash flow information related to leases are as follows:


	Nine Months Ended May 31,
	2024		2023
	(amounts in thousands)
Operating cash flows paid for operating lease liabilities	$	7,769	$	5,775
Operating right-of-use assets obtained in exchange for new operating lease liabilities	$	17,774	$	18,415

Maturities of lease liabilities, net of lease receivables, were as follows:


	Operating Leases
	(amounts in thousands)
Remainder of 2024	$	380
2025		9,940
2026		12,373
2027		13,111
2028		12,730
Thereafter		184,104
Total lease payments		232,638
Less: imputed interest		(97,056	)
Present value of lease liabilities	$	135,582

Related Party Transactions

9 Months Ended

May 31, 2024

Related Party Transactions

Note 4. Related Party Transactions

Balances with Kura Japan are as follows:


	May 31, 2024		August 31, 2023
	(amounts in thousands)
Due from affiliate	$	—	$	104
Due to affiliate	$	123	$	555

Reimbursements and other payments by the Company to Kura Japan were as follows:


	Three Months Ended May 31,				Nine Months Ended May 31
	2024		2023		2024		2023
	(amounts in thousands)
Related party transactions:
Expatriate salaries expense	$	33	$	33	$	124	$	87
Royalty payments		314		246		859		663
Travel and other administrative expenses		—		—		6		30
Purchases of equipment		374		568		1,811		2,024
Total related party transactions	$	721	$	847	$	2,800	$	2,804

Stock-based Compensation

9 Months Ended

May 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

Note 5. Stock-based Compensation

The following table summarizes the stock option activity under the Company’s 2018 Incentive Compensation Plan, as amended and restated (the “Stock Incentive Plan”):


	Options Outstanding
	Number of Shares Underlying Outstanding Options			Weighted Average Exercise Price Per Share

Outstanding — August 31, 2023		653,395		$	34.25
Granted		16,360		$	72.25
Exercised		(7,241	)	$	15.15
Cancelled/forfeited		(3,816	)	$	56.75
Outstanding — November 30, 2023		658,698		$	35.27
Granted		49,420		$	95.04
Exercised		(64,581	)	$	25.00
Cancelled/forfeited		(6,786	)	$	71.09
Outstanding — February 29, 2024		636,751		$	40.57
Granted		3,199		$	104.47
Exercised		(16,391	)	$	35.30
Cancelled/forfeited		(2,169	)	$	69.57
Outstanding — May 31, 2024		621,390		$	40.94

The following table summarizes the restricted stock unit (“RSU”) activity under the Stock Incentive Plan:


	Number of Shares Underlying Outstanding RSU			Weighted Average Grant Date Fair Value
Outstanding — August 31, 2023		31,105		$	69.88
Granted		—			—
Vested		(1,359	)	$	73.58
Cancelled/forfeited		(351	)	$	62.14
Outstanding — November 30, 2023		29,395		$	69.80
Granted		19,939		$	98.13
Vested		(8,095	)	$	62.14
Cancelled/forfeited		(436	)	$	66.10
Outstanding — February 29, 2024		40,803		$	85.20
Granted		—			—
Vested		(8	)	$	62.14
Cancelled/forfeited		(495	)	$	83.73
Outstanding — May 31, 2024		40,300		$	85.23

The total stock-based compensation recognized under the Stock Incentive Plan in the statements of operations and comprehensive income (loss) is as follows:


	Three Months Ended May 31,				Nine Months Ended May 31,
	2024		2023		2024		2023
	(amounts in thousands)
Restaurant-level stock-based compensation included in other costs	$	194	$	163	$	497	$	382
Corporate-level stock-based compensation included in general and administrative expenses		1,003		812		2,672		2,188
Stock-based compensation, net of amounts capitalized		1,197		975		3,169		2,570
Amount capitalized to Property and Equipment - net		39		—		181		—
Total stock-based compensation	$	1,236	$	975	$	3,350	$	2,570

Debt

9 Months Ended

May 31, 2024

Debt Disclosure [Abstract]

Debt

Note 6. Debt

(Loss) Income Per Share

9 Months Ended

May 31, 2024

Earnings Per Share [Abstract]

(Loss) Income Per Share

Note 7. (Loss) Income Per Share

The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share:


	Three Months Ended May 31,										Nine Months Ended May 31,
	2024						2023					2024						2023
	Class A			Class B			Class A		Class B			Class A			Class B			Class A			Class B
	(amounts in thousands, except per share data)
Net income (loss) attributable to common stockholders	$	(508	)	$	(50	)	$	1,520	$	160		$	(3,280	)	$	(323	)	$	(1,281	)	$	(142	)

Net income (loss) attributable to common stockholders – diluted	$	(508	)	$	(50	)	$	1,525	$	155		$	(3,280	)	$	(323	)	$	(1,281	)	$	(142	)

Weighted average common shares outstanding – basic		10,188			1,000			9,485		1,000			10,167			1,000			9,028			1,000
Dilutive effect of stock-based awards		—			—			322		—			—			—			—			—
Weighted average common shares outstanding – diluted		10,188			1,000			9,807		1,000			10,167			1,000			9,028			1,000

Net income (loss) per share attributable to common stockholders – basic	$	(0.05	)	$	(0.05	)	$	0.16	$	0.16		$	(0.32	)	$	(0.32	)	$	(0.14	)	$	(0.14	)
Net income (loss) per share attributable to common stockholders – diluted	$	(0.05	)	$	(0.05	)	$	0.16	$	0.16		$	(0.32	)	$	(0.32	)	$	(0.14	)	$	(0.14	)

Commitments and Contingencies

9 Months Ended

May 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 8. Commitments and Contingencies

Income Taxes

9 Months Ended

May 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 9. Income Taxes

Fair Value Measurements

9 Months Ended

May 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 10. Fair Value Measurements

The following table sets forth the Company’s assets measured at fair value on a recurring basis as of May 31, 2024.


	Level 1		Level 2		Level 3		Total
	(amounts in thousands)
Assets:
Certificates of deposits	$	—	$	1,250	$	—	$	1,250
Treasury bills		—		—		—		—
Total assets at fair value	$	—	$	1,250	$	—	$	1,250

Organization and Basis of Presentation (Policies)	9 Months Ended
Organization and Basis of Presentation (Policies)	May 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed financial statements (the “Condensed Financial Statements”) have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. As such, these Condensed Financial Statements should be read in conjunction with the Company’s audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended August 31, 2023. The accounting policies followed by the Company are set forth in Part II, Item 8, Note 2, Basis of Presentation and Summary of Significant Accounting Policies, of the Notes to Financial Statements included in the Company’s Annual Report on Form 10‑K for the fiscal year ended August 31, 2023. In the opinion of management, all adjustments necessary to fairly state the Condensed Financial Statements have been made. All such adjustments are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of results to be expected for the fiscal year ending August 31, 2024 or for any other future annual or interim period.
Fiscal Year	Fiscal Year The Company’s fiscal year begins on September 1 and ends on August 31, and references made to “fiscal year 2024” and “fiscal year 2023” refer to the Company’s fiscal years ending August 31, 2024 and ended August 31, 2023, respectively.
Use of Estimates	Use of Estimates Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. Significant items subject to such estimates include asset retirement obligations, stock-based compensation, the useful lives of assets, the assessment of the recoverability of long-lived assets, and income taxes. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions.
Short-Term Investments	Short-Term Investments Short-term investments consist of certificates of deposits and Treasury bills. The Company considers all highly liquid investments with an original maturity date greater than three months but less than one year as short-term investments. The carrying value of the short-term investments is equivalent to their amortized cost basis. As of May 31, 2024 and August 31, 2023, short-term investments were $1.3 million and $8.5 million, respectively. The certificates of deposits are deposited at Federal Deposit Insurance Corporation (“FDIC”) insured banks. The certificates of deposits are in amounts of $250,000 and deposited in multiple banks to ensure that the entire deposit balance is eligible for FDIC insurance. Certificates of deposits and Treasury bills are classified as available-for-sale debt securities which are measured at fair value with unrealized gains or losses recorded in other comprehensive income (loss). As of May 31, 2024, the Company recorded no unrealized gains or losses on short-term investments in accumulated other comprehensive income (loss). The Company reclassified $76 thousand out of accumulated other comprehensive income into earnings for the period related to maturities of certificates of deposits and a Treasury bill, which consisted of $75 thousand in realized gains on a Treasury bill and $1 thousand in realized gains on certificates of deposits. The Company determines realized gains or losses on the available-for-sale debt securities on a specific identification method basis. Based on the evaluation of credit risk factors, the Company has concluded that an allowance for credit losses is unnecessary for its short-term investments.
Comprehensive Income (Loss)	Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company’s short-term investments consist of certificates of deposits and Treasury bills that are classified as available-for-sale debt securities which are measured at fair value with unrealized gains or losses recorded in other comprehensive income (loss).
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid and effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued. The amendments should be applied on a prospective basis although retrospective application is permitted. The Company is currently evaluating the effects of this pronouncement on its financial statements and expects the update to result in additional disclosures. In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance in this update is effective for all public entities for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the effects of this pronouncement on its financial statements and expects the update to result in additional disclosures.

Balance Sheet Components (Tables)

9 Months Ended

May 31, 2024

Property, Plant and Equipment, Net [Abstract]

Schedule of Accounts and Other Receivables

Accounts and Other Receivables


	May 31, 2024		August 31, 2023
	(amounts in thousands)
Lease receivables	$	3,813	$	3,973
Credit card and other receivables		1,697		1,075
Total accounts and other receivables	$	5,510	$	5,048

Schedule of Property and Equipment Net

Property and Equipment - net


	May 31, 2024			August 31, 2023
	(amounts in thousands)
Leasehold improvements	$	97,827		$	75,472
Lease assets		6,229			6,247
Furniture and fixtures		49,114			34,213
Computer equipment		3,650			2,792
Vehicles		220			220
Software		1,017			1,016
Construction in progress		8,620			14,369
Property and equipment – gross		166,677			134,329
Less: accumulated depreciation and amortization		(36,014	)		(27,902	)
Total property and equipment – net	$	130,663		$	106,427

Leases (Tables)

9 Months Ended

May 31, 2024

Leases [Abstract]

Summary of Lease Related Costs

Lease related costs recognized in the statements of operations and comprehensive income (loss) are as follows:




		Three Months Ended May 31,				Nine Months Ended May 31,
		2024		2023		2024		2023
		(amounts in thousands)
Operating lease cost	Classification
Operating lease cost	Occupancy and related expenses, other costs and general and administrative expenses	$	3,380	$	3,208	$	9,678	$	7,450
Variable lease cost	Occupancy and related expenses, and general and administrative expenses		992		1,072		2,567		2,307
Total operating lease cost		$	4,372	$	4,280	$	12,245	$	9,757

Summary of Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases is as follows:

Operating Leases


	May 31, 2024		August 31, 2023
	(amounts in thousands)
Right-of-use assets	$	117,030	$	103,884

Lease liabilities – current	$	11,734	$	9,225
Lease liabilities – non-current		123,848		110,234
Total lease liabilities	$	135,582	$	119,459



	Nine Months Ended May 31,
	2024			2023
Weighted Average Remaining Lease Term (Years)
Operating leases		16.5			16.3

Weighted Average Discount Rate
Operating leases		7.1	%		6.6	%

Summary of Supplemental Disclosures of Cash Flow Information Related to Leases

Supplemental disclosures of cash flow information related to leases are as follows:


	Nine Months Ended May 31,
	2024		2023
	(amounts in thousands)
Operating cash flows paid for operating lease liabilities	$	7,769	$	5,775
Operating right-of-use assets obtained in exchange for new operating lease liabilities	$	17,774	$	18,415

Summary of Maturities of Lease Liabilities Net of Lease Receivables

Maturities of lease liabilities, net of lease receivables, were as follows:


	Operating Leases
	(amounts in thousands)
Remainder of 2024	$	380
2025		9,940
2026		12,373
2027		13,111
2028		12,730
Thereafter		184,104
Total lease payments		232,638
Less: imputed interest		(97,056	)
Present value of lease liabilities	$	135,582

Related Party Transactions (Tables)

9 Months Ended

May 31, 2024

Balances with Kura Japan are as follows:


	May 31, 2024		August 31, 2023
	(amounts in thousands)
Due from affiliate	$	—	$	104
Due to affiliate	$	123	$	555

Reimbursements and other payments by the Company to Kura Japan were as follows:


	Three Months Ended May 31,				Nine Months Ended May 31
	2024		2023		2024		2023
	(amounts in thousands)
Related party transactions:
Expatriate salaries expense	$	33	$	33	$	124	$	87
Royalty payments		314		246		859		663
Travel and other administrative expenses		—		—		6		30
Purchases of equipment		374		568		1,811		2,024
Total related party transactions	$	721	$	847	$	2,800	$	2,804

Stock-based Compensation (Tables)

9 Months Ended

May 31, 2024

Share-Based Payment Arrangement [Abstract]

Summary of Stock Option Activity under Stock Incentive Plan

The following table summarizes the stock option activity under the Company’s 2018 Incentive Compensation Plan, as amended and restated (the “Stock Incentive Plan”):


	Options Outstanding
	Number of Shares Underlying Outstanding Options			Weighted Average Exercise Price Per Share

Outstanding — August 31, 2023		653,395		$	34.25
Granted		16,360		$	72.25
Exercised		(7,241	)	$	15.15
Cancelled/forfeited		(3,816	)	$	56.75
Outstanding — November 30, 2023		658,698		$	35.27
Granted		49,420		$	95.04
Exercised		(64,581	)	$	25.00
Cancelled/forfeited		(6,786	)	$	71.09
Outstanding — February 29, 2024		636,751		$	40.57
Granted		3,199		$	104.47
Exercised		(16,391	)	$	35.30
Cancelled/forfeited		(2,169	)	$	69.57
Outstanding — May 31, 2024		621,390		$	40.94

Summary of Restricted Stock Unit (RSU) Activity Under Stock Incentive Plan

The following table summarizes the restricted stock unit (“RSU”) activity under the Stock Incentive Plan:


	Number of Shares Underlying Outstanding RSU			Weighted Average Grant Date Fair Value
Outstanding — August 31, 2023		31,105		$	69.88
Granted		—			—
Vested		(1,359	)	$	73.58
Cancelled/forfeited		(351	)	$	62.14
Outstanding — November 30, 2023		29,395		$	69.80
Granted		19,939		$	98.13
Vested		(8,095	)	$	62.14
Cancelled/forfeited		(436	)	$	66.10
Outstanding — February 29, 2024		40,803		$	85.20
Granted		—			—
Vested		(8	)	$	62.14
Cancelled/forfeited		(495	)	$	83.73
Outstanding — May 31, 2024		40,300		$	85.23

Summary of Stock Based Compensation Recognized under Stock Incentive Plan

The total stock-based compensation recognized under the Stock Incentive Plan in the statements of operations and comprehensive income (loss) is as follows:


	Three Months Ended May 31,				Nine Months Ended May 31,
	2024		2023		2024		2023
	(amounts in thousands)
Restaurant-level stock-based compensation included in other costs	$	194	$	163	$	497	$	382
Corporate-level stock-based compensation included in general and administrative expenses		1,003		812		2,672		2,188
Stock-based compensation, net of amounts capitalized		1,197		975		3,169		2,570
Amount capitalized to Property and Equipment - net		39		—		181		—
Total stock-based compensation	$	1,236	$	975	$	3,350	$	2,570

(Loss) Income Per Share (Tables)

9 Months Ended

May 31, 2024

Earnings Per Share [Abstract]

Computation of Basic and Diluted Income (Loss) Per Share

The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share:


	Three Months Ended May 31,										Nine Months Ended May 31,
	2024						2023					2024						2023
	Class A			Class B			Class A		Class B			Class A			Class B			Class A			Class B
	(amounts in thousands, except per share data)
Net income (loss) attributable to common stockholders	$	(508	)	$	(50	)	$	1,520	$	160		$	(3,280	)	$	(323	)	$	(1,281	)	$	(142	)

Net income (loss) attributable to common stockholders – diluted	$	(508	)	$	(50	)	$	1,525	$	155		$	(3,280	)	$	(323	)	$	(1,281	)	$	(142	)

Weighted average common shares outstanding – basic		10,188			1,000			9,485		1,000			10,167			1,000			9,028			1,000
Dilutive effect of stock-based awards		—			—			322		—			—			—			—			—
Weighted average common shares outstanding – diluted		10,188			1,000			9,807		1,000			10,167			1,000			9,028			1,000

Net income (loss) per share attributable to common stockholders – basic	$	(0.05	)	$	(0.05	)	$	0.16	$	0.16		$	(0.32	)	$	(0.32	)	$	(0.14	)	$	(0.14	)
Net income (loss) per share attributable to common stockholders – diluted	$	(0.05	)	$	(0.05	)	$	0.16	$	0.16		$	(0.32	)	$	(0.32	)	$	(0.14	)	$	(0.14	)

Fair Value Measurements (Tables)

9 Months Ended

May 31, 2024

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on a Recurring Basis

The following table sets forth the Company’s assets measured at fair value on a recurring basis as of May 31, 2024.


	Level 1		Level 2		Level 3		Total
	(amounts in thousands)
Assets:
Certificates of deposits	$	—	$	1,250	$	—	$	1,250
Treasury bills		—		—		—		—
Total assets at fair value	$	—	$	1,250	$	—	$	1,250

Organization and Basis of Presentation - Additional Information (Details) - USD ($)	9 Months Ended
	May 31, 2024	Aug. 31, 2023
Organization and Basis of Presentation [Line Items]
Short-term investments	$ 1,250,000	$ 8,542,000
Accumulated other comprehensive income into earnings	0	$ 43,000
Certificates of Deposit
Organization and Basis of Presentation [Line Items]
Short-term investments	250,000
Realized gains on short-term investments	1,000
Treasury Bills
Organization and Basis of Presentation [Line Items]
Accumulated other comprehensive income into earnings	76,000
Realized gains on short-term investments	$ 75,000

Balance Sheet Components - Schedule of Accounts and Other Receivables (Details) - USD ($) $ in Thousands	May 31, 2024	Aug. 31, 2023
Receivables Net Current [Line Items]
Accounts and other receivables	$ 5,510	$ 5,048
Lease Receivables
Receivables Net Current [Line Items]
Accounts and other receivables	3,813	3,973
Credit Card and Other Receivables
Receivables Net Current [Line Items]
Accounts and other receivables	$ 1,697	$ 1,075

Balance Sheet Components - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	May 31, 2024	Aug. 31, 2023
Property Plant And Equipment [Line Items]
Property and equipment - gross	$ 166,677	$ 134,329
Accumulated depreciation	(36,014)	(27,902)
Total property and equipment – net	130,663	106,427
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment - gross	97,827	75,472
Lease Assets
Property Plant And Equipment [Line Items]
Property and equipment - gross	6,229	6,247
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Property and equipment - gross	49,114	34,213
Computer Equipment
Property Plant And Equipment [Line Items]
Property and equipment - gross	3,650	2,792
Vehicles
Property Plant And Equipment [Line Items]
Property and equipment - gross	220	220
Software
Property Plant And Equipment [Line Items]
Property and equipment - gross	1,017	1,016
Construction in Progress
Property Plant And Equipment [Line Items]
Property and equipment - gross	$ 8,620	$ 14,369

Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Property, Plant and Equipment, Net [Abstract]
Depreciation and amortization expenses	$ 3,200	$ 2,100	$ 8,612	$ 5,574

Leases - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended
	May 31, 2024	Jun. 01, 2024
Lessee Lease Description [Line Items]
Operating and finance leases, remaining lease start range terms description	less than 1 year
Operating lease liability not yet commenced, liability	$ 44.7
Option to extend, existence, lease liabilities not yet commenced, operating lease	true
Maximum
Lessee Lease Description [Line Items]
Operating and finance leases, remaining lease terms	20 years
Subsequent Event
Lessee Lease Description [Line Items]
Operating lease liability not yet commenced, liability		$ 15.6
Subsequent Event \| Maximum
Lessee Lease Description [Line Items]
Operating lease liabilities not yet commenced, lease term		30 years

Leases - Summary of Lease Related Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Operating lease cost
Operating lease cost	$ 3,380	$ 3,208	$ 9,678	$ 7,450
Variable lease cost	992	1,072	2,567	2,307
Total operating lease cost	$ 4,372	$ 4,280	$ 12,245	$ 9,757

Leases - Summary of Operating Leases (Details) - USD ($) $ in Thousands	May 31, 2024	Aug. 31, 2023
Leases [Abstract]
Right-of-use assets	$ 117,030	$ 103,884
Lease liabilities – current	11,734	9,225
Lease liabilities – non-current	123,848	110,234
Total lease liabilities	$ 135,582	$ 119,459

Leases - Summary of Weighted Average Remaining Lease Term and Weighted Average Discount Rate (Details)	May 31, 2024	May 31, 2023
Weighted Average Remaining Lease Term (Years)
Operating leases	16 years 6 months	16 years 3 months 18 days
Weighted Average Discount Rate
Operating leases	7.10%	6.60%

Leases - Summary of Supplemental Disclosures of Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	May 31, 2024	May 31, 2023
Leases [Abstract]
Operating cash flows paid for operating lease liabilities	$ 7,769	$ 5,775
Operating right-of-use assets obtained in exchange for new operating lease liabilities	$ 17,774	$ 18,415

Leases - Summary of Maturities of Lease Liabilities Net of Lease Receivables (Details) - USD ($) $ in Thousands	May 31, 2024	Aug. 31, 2023
Operating Leases
Remainder of 2024	$ 380
2025	9,940
2026	12,373
2027	13,111
2028	12,730
Thereafter	184,104
Total lease payments	232,638
Less: imputed interest	(97,056)
Present value of lease liabilities	$ 135,582	$ 119,459

Related Party Transactions - Additional Information (Details) - Kura Japan - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 31, 2019	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023	Apr. 10, 2020
Professional Fees, Travel and Other Administrative Expenses
Related Party Transaction [Line Items]
Reimbursements by related party		$ 42	$ 7	$ 264	$ 67
Revolving Credit Facility Agreement \| COVID-19
Related Party Transaction [Line Items]
Credit facility maximum borrowing capacity						$ 45,000
Amended and Restated Exclusive License Agreement
Related Party Transaction [Line Items]
Royalty fee of net sales	0.50%

Related Party Transactions - Schedule of Related Party Transactions Due to and from Affiliates (Details) - Kura Japan - USD ($) $ in Thousands	May 31, 2024	Aug. 31, 2023
Related Party Transaction [Line Items]
Due from affiliate		$ 104
Due to affiliate	$ 123	$ 555

Related Party Transactions - Schedule of Related Party Reimbursements and Other Payments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Related Party Transaction [Line Items]
Total related party transactions	$ 55,287	$ 40,826	$ 151,596	$ 113,356
Kura Japan
Related Party Transaction [Line Items]
Total related party transactions	721	847	2,800	2,804
Expatriate Salaries Expense \| Kura Japan
Related Party Transaction [Line Items]
Total related party transactions	33	33	124	87
Royalty Payments \| Kura Japan
Related Party Transaction [Line Items]
Total related party transactions	314	246	859	663
Travel and Other Administrative Expenses \| Kura Japan
Related Party Transaction [Line Items]
Total related party transactions			6	30
Purchases of Equipment \| Kura Japan
Related Party Transaction [Line Items]
Total related party transactions	$ 374	$ 568	$ 1,811	$ 2,024

Stock-based Compensation - Summary of Stock Option Activity under Stock Incentive Plan (Details) - Stock Incentive Plan - $ / shares	3 Months Ended
	May 31, 2024	Feb. 29, 2024	Nov. 30, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options Outstanding, Number of shares underlying outstanding options, Beginning balance	636,751	658,698	653,395
Options Outstanding, Number of shares underlying outstanding options, Options granted	3,199	49,420	16,360
Options Outstanding, Number of shares underlying outstanding options, Options exercised	(16,391)	(64,581)	(7,241)
Options Outstanding, Number of shares underlying outstanding options, Options cancelled/forfeited	(2,169)	(6,786)	(3,816)
Options Outstanding, Number of shares underlying outstanding options, Ending balance	621,390	636,751	658,698
Options Outstanding, Weighted Average Exercise Price Per Share, Beginning balance	$ 40.57	$ 35.27	$ 34.25
Options Outstanding, Weighted Average Exercise Price Per Share, Options granted	104.47	95.04	72.25
Options Outstanding, Weighted Average Exercise Price Per Share, Options exercised	35.3	25	15.15
Options Outstanding, Weighted Average Exercise Price Per Share, Options canceled/forfeited	69.57	71.09	56.75
Options Outstanding, Weighted Average Exercise Price Per Share, Ending balance	$ 40.94	$ 40.57	$ 35.27

Stock-based Compensation - Summary of Restricted Stock Unit (RSU) Activity Under Stock Incentive Plan (Details) - Stock Incentive Plan - Restricted Stock Units - $ / shares	3 Months Ended
	May 31, 2024	Feb. 29, 2024	Nov. 30, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
RSUs Outstanding, Number of Shares Underlying Outstanding RSUs, Beginning balance	40,803	29,395	31,105
RSUs Outstanding, Number of Shares Underlying Outstanding RSUs, RSUs granted		19,939
RSUs Outstanding, Number of Shares Underlying Outstanding RSUs, RSUs vested	(8)	(8,095)	(1,359)
RSUs Outstanding, Number of Shares Underlying Outstanding RSUs, RSUs cancelled/forfeited	(495)	(436)	(351)
RSUs Outstanding, Number of Shares Underlying Outstanding RSUs, Ending balance	40,300	40,803	29,395
Weighted average exercise price per share, RSUs outstanding Beginning	$ 85.2	$ 69.8	$ 69.88
Weighted average exercise price per share, RSUs granted		98.13
Weighted average exercise price per share, RSUs vested	62.14	62.14	73.58
Weighted average exercise price per share, RSUs cancelled/forfeited	83.73	66.1	62.14
Weighted average exercise price per share, RSUs outstanding Endining	$ 85.23	$ 85.2	$ 69.8

Stock-based Compensation - Summary of Stock Based Compensation Recognized under Stock Incentive Plan (Details) - Stock Incentive Plan - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation, net of amounts capitalized	$ 1,197	$ 975	$ 3,169	$ 2,570
Total stock-based compensation	1,236	975	3,350	2,570
Restaurant-level Stock Based Compensation Included In Other Costs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation, net of amounts capitalized	194	163	497	382
Corporate-level Stock Based Compensation Included In General and Administrative Expenses
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation, net of amounts capitalized	1,003	$ 812	2,672	$ 2,188
Amount Capitalized to Property and Equipment - net
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation cost capitalized to Property and Equipment - net	$ 39		$ 181

Debt - Additional Information (Details) - USD ($)	9 Months Ended
Debt - Additional Information (Details) - USD ($)	May 31, 2024	Aug. 31, 2023	Apr. 10, 2020
Debt Instrument [Line Items]
Revolving credit line interest rate	130.00%
Revolving Credit Facility Agreement
Debt Instrument [Line Items]
Outstanding balance	$ 0
Remaining availability under credit agreement		$ 45,000,000
Revolving Credit Facility Agreement \| Kura Japan
Debt Instrument [Line Items]
Outstanding borrowings			$ 45,000,000.0

(Loss) Income Per Share - Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Earnings Per Share Diluted [Line Items]
Weighted average common shares outstanding – basic	11,188	10,485	11,167	10,028
Diluted	11,188	10,807	11,167	10,028
Basic	$ (0.05)	$ 0.16	$ (0.32)	$ (0.14)
Diluted	$ (0.05)	$ 0.16	$ (0.32)	$ (0.14)
Class A
Earnings Per Share Diluted [Line Items]
Net income (loss) attributable to common stockholders	$ (508)	$ 1,520	$ (3,280)	$ (1,281)
Net income (loss) attributable to common stockholders - diluted	$ (508)	$ 1,525	$ (3,280)	$ (1,281)
Weighted average common shares outstanding – basic	10,188	9,485	10,167	9,028
Dilutive effect of stock-based awards		322
Diluted	10,188	9,807	10,167	9,028
Basic	$ (0.05)	$ 0.16	$ (0.32)	$ (0.14)
Diluted	$ (0.05)	$ 0.16	$ (0.32)	$ (0.14)
Class B
Earnings Per Share Diluted [Line Items]
Net income (loss) attributable to common stockholders	$ (50)	$ 160	$ (323)	$ (142)
Net income (loss) attributable to common stockholders - diluted	$ (50)	$ 155	$ (323)	$ (142)
Weighted average common shares outstanding – basic	1,000	1,000	1,000	1,000
Diluted	1,000	1,000	1,000	1,000
Basic	$ (0.05)	$ 0.16	$ (0.32)	$ (0.14)
Diluted	$ (0.05)	$ 0.16	$ (0.32)	$ (0.14)

(Loss) Income Per Share - Additional Information (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Earnings Per Share [Line Items]
Shares of common stock subject to outstanding employee stock options that were excluded from the calculation of diluted income (loss) per share	662	201	662	729

Commitments and Contingencies - Additional Information (Details) $ in Millions			3 Months Ended
	Feb. 26, 2024 Employees	Jan. 19, 2024 Employees	May 31, 2024 USD ($)
Loss Contingencies [Line Items]
Number of former employees initiated arbitration against company \| Employees	3	2
General and Administrative Expenses
Loss Contingencies [Line Items]
Accrued liability \| $			$ 0.6

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 60	$ 41	$ 148	$ 66
Federal statutory tax rate			21.00%

Fair Value Measurements - Schedule of Assets Measured at Fair Value on a Recurring Basis (Details) - Fair Value Recurring $ in Thousands	May 31, 2024 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	$ 1,250
Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	1,250
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	1,250
Level 2 \| Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	$ 1,250

Kura Sushi USA (NASDAQ:KRUS)
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Kura Sushi USA (NASDAQ:KRUS)
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From Jul 2023 to Jul 2024

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company