Kura Sushi USA (NASDAQ: KRUS) Q1 sales rise as losses widen sharply

Rhea-AI Filing Summary

Kura Sushi USA reported higher sales but wider losses for the quarter ended November 30, 2025. Sales rose to $73.5 million from $64.5 million, a 14.0% increase driven mainly by thirteen restaurants opened since late 2024 and menu price increases. However, comparable restaurant sales fell 2.5%, as guest traffic declined 2.5% amid a weaker macro environment.

Restaurant costs grew faster than sales. Food and beverage costs increased to $21.9 million and 29.9% of sales, up from 29.0%, largely due to tariffs on imported ingredients. Other restaurant-level expenses, including occupancy, depreciation and marketing, also rose, pushing total operating expenses to 105.0% of sales. As a result, operating loss widened to $3.7 million and net loss increased to $3.1 million, or $(0.25) per share, compared with a $(0.08) loss per share a year ago.

Adjusted EBITDA declined to $2.4 million from $3.6 million, and operating cash flow fell to $0.5 million. The company ended the quarter with $35.4 million in cash and cash equivalents and no borrowings under its $45.0 million related-party revolving credit line. Kura operated 83 restaurants after opening four new locations in the quarter and still plans to open 16 new restaurants in fiscal 2026. After quarter-end, it filed a universal shelf registration statement allowing it to offer up to $100.0 million of various securities over three years once effective.

Positive

• Revenue growth and unit expansion: Sales increased 14.0% year over year to $73.5 million, driven by thirteen new restaurants opened since late 2024 and menu price increases, bringing the system to 83 locations.
• Liquidity and financing capacity: The company ended the quarter with $35.4 million in cash and cash equivalents, additional investments, no outstanding revolver borrowings, and $45.0 million of availability under its related-party credit facility.
• Shelf registration flexibility: After quarter-end, the company filed a universal shelf registration statement covering up to $100.0 million of various securities, allowing it to raise capital over the next three years once effective.

Negative

• Margin compression and larger loss: Net loss increased to $3.1 million from $0.96 million, with operating expenses rising to 105.0% of sales and Adjusted EBITDA margin declining from 5.5% to 3.3%.
• Negative comparable sales and traffic: Comparable restaurant sales fell 2.5%, entirely due to a 2.5% drop in traffic, indicating softness in underlying demand despite new-unit growth.
• Cost pressures from tariffs and operations: Food and beverage costs rose to 29.9% of sales, and other restaurant-level expenses grew faster than revenue, partly from tariffs, higher marketing, repairs, utilities and sales deleverage.
• Weaker operating cash flow: Net cash provided by operating activities declined to $0.5 million from $4.4 million, reflecting the wider loss and working-capital outflows.

Insights

Restaurant & consumer sector analyst

Strong unit growth and sales, but traffic softness and rising costs drove a sharply larger loss.

Kura Sushi USA grew rapidly in the quarter, with sales up 14.0% to $73.5 million, fueled by thirteen new restaurants and menu price increases. The store base reached 83 units after four openings, and management plans 16 openings in fiscal 2026, signaling continued expansion of the revolving-sushi concept across the U.S.

Profitability, however, moved in the opposite direction. Comparable restaurant sales declined 2.5% on negative traffic, and total restaurant operating costs rose to 91.8% of sales. Tariffs on imported ingredients lifted food and beverage costs to 29.9% of sales, while higher occupancy, depreciation and other operating expenses further compressed margins. Net loss widened to $3.1 million from $0.96 million, and Adjusted EBITDA fell to $2.4 million with margin down to 3.3%.

From a balance sheet perspective, the company reported $35.4 million in cash and cash equivalents, additional investments, and no borrowings under its $45.0 million revolving credit line, supporting ongoing build-out and purchase commitments of $25.7 million for food and new-unit construction over the next 12 months. The newly filed universal shelf registration for up to $100.0 million of securities provides an additional funding avenue over the next three years, though any actual issuance terms would be set in future prospectus supplements.

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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 November 30, 2025

OR

☐ 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.

Large accelerated filer		☐		Accelerated filer		☒
Non-accelerated filer		☐		Smaller reporting company		☐
Emerging growth company		☐

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 December 30, 2025, the registrant had 11,111,427 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 Income (Loss)	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	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II.	OTHER INFORMATION	24
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
Signatures		26

i

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Kura Sushi USA, Inc.

Condensed Balance Sheets

(amounts in thousands, except for par value)

(Unaudited)

		November 30, 2025				August 31, 2025
Assets
Current assets:
Cash and cash equivalents		$	35,365			$	47,498
Short-term investments			15,336				14,964
Accounts and other receivables			6,333				6,410
Inventories			2,453				2,141
Due from affiliate			73				126
Prepaid expenses and other current assets			5,203				4,308
Total current assets			64,763				75,447
Non-current assets:
Property and equipment – net			181,921				171,190
Operating lease right-of-use assets			161,811				146,416
Long-term investments			27,846				29,542
Deposits and other assets			7,170				8,347
Total assets		$	443,511			$	430,942
Liabilities and stockholders' equity
Current liabilities:
Accounts payable		$	9,574			$	11,533
Accrued expenses and other current liabilities			4,853				4,116
Salaries and wages payable			8,215				10,310
Operating lease liabilities – current			14,778				14,083
Due to affiliate			819				525
Sales tax payable			2,087				2,213
Total current liabilities			40,326				42,780
Non-current liabilities:
Operating lease liabilities – non-current			172,634				155,932
Other liabilities			1,350				1,160
Total liabilities			214,310				199,872
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, 11,111 shares issued and outstanding as of November 30, 2025 and August 31, 2025			11				11
Class B common stock, $0.001 par value; 10,000 shares authorized, 1,000 shares issued and outstanding as of November 30, 2025 and August 31, 2025			1				1
Additional paid-in capital			267,124				265,973
Accumulated deficit			(37,952	)			(34,892	)
Accumulated other comprehensive income (loss)			17				(23	)
Total stockholders' equity			229,201				231,070
Total liabilities and stockholders' equity		$	443,511			$	430,942

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

1

Kura Sushi USA, Inc.

Condensed Statements of Operations and Comprehensive Loss

(amounts in thousands, except for per share data)

(Unaudited)

		Three months ended November 30,
		2025				2024
Sales		$	73,455			$	64,456
Restaurant operating costs:
Food and beverage costs			21,934				18,667
Labor and related costs			23,898				21,235
Occupancy and related expenses			5,838				4,754
Depreciation and amortization expenses			3,980				3,091
Other costs			11,805				9,341
Total restaurant operating costs			67,455				57,088
General and administrative expenses			9,551				8,733
Depreciation and amortization expenses			129				109
Total operating expenses			77,135				65,930
Operating loss			(3,680	)			(1,474	)
Other expense (income):
Interest expense			18				13
Interest income			(674	)			(565	)
Loss before income taxes			(3,024	)			(922	)
Income tax expense			36				39
Net loss		$	(3,060	)		$	(961	)
Net loss per Class A and Class B shares
Basic		$	(0.25	)		$	(0.08	)
Diluted		$	(0.25	)		$	(0.08	)
Weighted average Class A and Class B shares outstanding
Basic			12,111				11,416
Diluted			12,111				11,416
Other comprehensive loss:
Unrealized gain on short-term investments		$	40			$	—
Comprehensive loss		$	(3,020	)		$	(961	)

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

2

Kura Sushi USA, Inc.

Condensed Statements of Stockholders’ Equity

(amounts in thousands)

(Unaudited)

		Common Stock
		Class A								Class B								Additional Paid-in				Accumulated				Accumulated Other Comprehensive				Total Stockholders'
		Shares				Amount				Shares				Amount				Capital				Deficit				Income/(Loss)				Equity
Balances as of August 31, 2025			11,111			$	11				1,000			$	1			$	265,973			$	(34,892	)		$	(23	)		$	231,070
Stock-based compensation			—				—				—				—				1,128				—				—				1,128
Employee stock plan			—				—				—				—				23				—				—				23
Net loss			—				—				—				—				—				(3,060	)			—				(3,060	)
Other comprehensive income			—				—				—				—				—				—				40				40
Balances as of November 30, 2025			11,111			$	11				1,000			$	1				267,124			$	(37,952	)		$	17			$	229,201
		Common Stock
		Class A								Class B								Additional Paid-in				Accumulated				Accumulated  Other Comprehensive				Total Stockholders'
		Shares				Amount				Shares				Amount				Capital				Deficit				Income/(Loss)				Equity
Balances as of August 31, 2024			10,253			$	10				1,000			$	1			$	195,515			$	(32,988	)		$	—			$	162,538
Stock-based compensation			—				—				—				—				1,152				—				—				1,152
Employee stock plan			11				—				—				—				493				—				—				493
Issuance of common stock in connection with follow-on public offering, net of underwriter discounts and issuance costs			800				1				—				—				64,354				—				—				64,355
Net loss			—				—				—				—				—				(961	)			—				(961	)
Balances as of November 30, 2024			11,064			$	11				1,000			$	1			$	261,514			$	(33,949	)		$	—			$	227,577

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

3

Kura Sushi USA, Inc.

Condensed Statements of Cash Flows

(amounts in thousands)

(Unaudited)

		Three months ended November 30,
		2025				2024
Cash flows from operating activities
Net loss		$	(3,060	)		$	(961	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization			4,109				3,200
Stock-based compensation, net of amounts capitalized			1,099				1,126
Bond premium amortization			62				—
Changes in operating assets and liabilities:
Accounts and other receivables			663				(426	)
Inventories			(312	)			112
Due from affiliate			53				130
Prepaid expenses and other current assets			(706	)			(181	)
Deposits and other assets			207				135
Accounts payable			(1,437	)			1,190
Accrued expenses and other current liabilities			666				(909	)
Salaries and wages payable			(2,095	)			(582	)
Operating lease liabilities and assets			1,499				1,823
Due to affiliate			(46	)			(143	)
Sales tax payable			(173	)			(152	)
Net cash provided by operating activities			529				4,362
Cash flows from investing activities
Payments for property and equipment			(13,826	)			(11,555	)
Payments for initial direct costs			(83	)			(135	)
Purchases of liquor licenses			(55	)			(810	)
Purchases of investments			(18,399	)			—
Maturities and redemptions of investments			19,700				—
Net cash used in investing activities			(12,663	)			(12,500	)
Cash flows from financing activities
Repayment of principal on finance leases			(22	)			(18	)
Proceeds from exercise of stock options			23				493
Proceeds from the follow-on public offering, net of discounts and commissions			—				64,626
Payments of costs related to the follow-on offering			—				(272	)
Net cash provided by financing activities			1				64,829
Increase (decrease) in cash and cash equivalents			(12,133	)			56,691
Cash and cash equivalents, beginning of period			47,498				50,986
Cash and cash equivalents, end of period		$	35,365			$	107,677
Supplemental disclosures of cash flow information
Cash paid for income taxes		$	21			$	—
Noncash investing activities
Acquisition of finance leases		$	22			$	78
Amounts unpaid for purchases of property and equipment		$	3,114			$	1,943
Stock-based compensation capitalized to property and equipment, net		$	29			$	26

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

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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, 2025.

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, 2025. 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, 2026 or for any other future annual or interim period.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Fiscal Year

The Company’s fiscal year begins on September 1 and ends on August 31, and references made to “fiscal year 2026” and “fiscal year 2025” refer to the Company’s fiscal years ending August 31, 2026 and ended August 31, 2025, 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.

Investments

The Company invests in securities, including certificates of deposit, Treasury notes, and U.S. Government Agency debt securities. Investment classification is determined based on the accounting guidance as available for sale or held to maturity. Certificates of deposit and Treasury notes are classified as available-for-sale debt securities and measured at fair value, with unrealized gains or losses recorded in other comprehensive income (loss). U.S. Government Agency debt securities are classified as held-to-maturity and measured at amortized cost. Realized gains or losses are determined on a specific identification basis. The classification of these investments as either short-term or long-term is based on their original maturity dates, with short-term

5

investments having maturities greater than three months but less than one year, and long-term investments having maturities greater than one year.

Recently Issued Accounting Pronouncements

Subsequent to November 30, 2025, in December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-11, Narrow-Scope Improvements (Topic 270): Interim Reporting. This update makes targeted, narrow-scope improvements to the interim reporting guidance in Topic 270 to clarify application and improve consistency in practice. The amendments do not change the underlying principles of interim reporting. The amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company expects to adopt the guidance in its Form 10-Q for the interim period ending November 30, 2028. The Company is currently evaluating the effects of this pronouncement on its consolidated financial statements and does not expect the adoption of this ASU to have a material effect on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes guidance for internal-use software costs. The amendments in this update improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. This update is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years, though early adoption is permitted. The Company expects to adopt the guidance in its annual report on Form 10-K for the fiscal year ending August 31, 2029. The Company is currently evaluating the effects of this pronouncement on its financial statements and does not expect the update to have a material effect on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses”, which requires public companies to disaggregate key expense categories such as inventory purchases, employee compensation and depreciation in their financial statements. In January 2025, the FASB issued ASU 2025-01 “Income Statement-Reporting Comprehensive Income- Expense Disaggregation Disclosures- Clarifying the Effective Date”, which amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company expects to adopt the guidance in its annual report on Form 10-K for the fiscal year ending August 31, 2028. The Company is currently evaluating the effects of this pronouncement on its financial statements and expects the update to result in additional disclosures.

In December 2023, the FASB issued 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 expects to adopt the guidance in its annual report on Form 10-K for the fiscal year ending August 31, 2026. 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

		November 30, 2025				August 31, 2025
		(amounts in thousands)
Lease receivables		$	2,036			$	1,450
Credit card and other receivables			4,297				4,960
Total accounts and other receivables		$	6,333			$	6,410

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Property and Equipment - net

		November 30, 2025				August 31, 2025
		(amounts in thousands)
Leasehold improvements		$	138,168			$	129,909
Furniture and fixtures			82,471				76,714
Computer equipment			4,802				4,632
Vehicles			232				342
Software			1,017				1,017
Construction in progress			11,886				11,203
Property and equipment – gross			238,576				223,817
Less: accumulated depreciation and amortization			(56,655	)			(52,627	)
Total property and equipment – net		$	181,921			$	171,190

Depreciation and amortization expense for property and equipment was $4.1 million and $3.2 million for the three months ended November 30, 2025 and November 30, 2024, respectively.

Note 3. Leases

The Company has operating and finance leases for its corporate offices, restaurant locations, warehouse, 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 condensed statements of operations and comprehensive loss are as follows:

		Three months ended November 30,
		2025				2024
		(amounts in thousands)
Operating lease cost	Classification
Operating lease cost	Occupancy and related expenses, other costs and general and administrative expenses	$	4,580			$	3,804
Variable lease cost	Occupancy and related expenses, and general and administrative expenses		1,177				991
Total operating lease cost		$	5,757			$	4,795

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

		Three months ended November 30,
		2025				2024
		(amounts in thousands)
Operating cash flows paid for operating lease liabilities		$	3,956			$	3,166
Operating right-of-use assets obtained in exchange for new operating lease liabilities		$	16,674			$	11,016

As of November 30, 2025, the Company had an additional $54.9 million of operating lease liabilities related to restaurants for which the Company had not yet taken possession.

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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 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 condensed 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 (as amended, the “Revolving Credit Agreement”). For additional information, see “Note 6. Debt.”

Balances with Kura Japan are as follows:

		November 30, 2025				August 31, 2025
		(amounts in thousands)
Due from affiliate		$	73			$	126
Due to affiliate		$	819			$	525

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

		Three months ended November 30,
		2025				2024
		(amounts in thousands)
Related party transactions:
Expatriate salaries expense		$	35			$	29
Royalty payments			368				322
Travel and other administrative expenses			4				42.00
Purchases of equipment			1,853				1,264
Total related party transactions		$	2,260			$	1,657

Reimbursements by Kura Japan to the Company were $209 thousand and $187 thousand for the three months ended November 30, 2025 and November 30, 2024, respectively. The reimbursements were primarily for travel, professional fees and other administrative expenses.

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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, 2025			591,421			$	44.02
Granted			6,791			$	66.90
Exercised			(685	)		$	31.55
Cancelled/forfeited			(3,688	)		$	70.13
Outstanding — November 30, 2025			593,839			$	44.14

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, 2025			50,425			$	81.02
Granted			—				—
Vested			—				—
Cancelled/forfeited			(1,576	)		$	82.08
Outstanding — November 30, 2025			48,849			$	80.99

As of November 30, 2025, the Company has 8,724 performance restricted stock units (“PSUs”) outstanding with a three-year performance vesting period and a weighted average grant date fair value of $80.00.

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

	Three months ended November 30,
	2025				2024
	(amounts in thousands)
Restaurant-level stock-based compensation included in labor and related costs	$	181			$	179
Corporate-level stock-based compensation included in general and administrative expenses		918				947
Stock-based compensation, net of amounts capitalized		1,099				1,126
Amount capitalized to property and equipment - net		29				26
Total stock-based compensation	$	1,128			$	1,152

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 (made on or after April 10, 2021) fixed at 130% of the Annual Compounding Long-Term Applicable Federal Rate on the date such advance is made. There are no financial covenants under the Revolving Credit Agreement with which the Company must comply.

On April 4, 2025, the Company and Kura Japan entered into a Third Amendment to Revolving Credit Agreement (the “Third Amendment”) to extend the last day of the period of availability for the advances under the credit line from April 10, 2025 to April 10, 2028. In connection with the Third Amendment, the Revolving Credit Note under the Revolving Credit Agreement was also amended by incorporating the same amendments as provided under the Third Amendment.

As of November 30, 2025 and August 31, 2025, 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.”

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Note 7. Loss Per Share

The net 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 loss 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 loss per share:

		Three months ended November 30,
		2025								2024
		Class A				Class B				Class A				Class B
		(amounts in thousands, except per share data)
Net loss attributable to common stockholders		$	(2,807	)		$	(253	)		$	(877	)		$	(84	)
Weighted average common shares outstanding – basic			11,111				1,000				10,416				1,000
Dilutive effect of stock-based awards			—				—				—				—
Weighted average common shares outstanding – diluted			11,111				1,000				10,416				1,000
Net loss per share attributable to common stockholders – basic		$	(0.25	)		$	(0.25	)		$	(0.08	)		$	(0.08	)
Net loss per share attributable to common stockholders – diluted		$	(0.25	)		$	(0.25	)		$	(0.08	)		$	(0.08	)

The Company computes basic loss per common share using net loss and the weighted average number of common shares outstanding during the period, and computes diluted loss per common share using net 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, RSUs and PSUs.

For the three months ended November 30, 2025 and November 30, 2024, there were 651 thousand and 631 thousand, respectively, shares of common stock subject to outstanding employee stock options, RSUs and PSUs that were excluded from the calculation of diluted income per share because their inclusion would have been anti-dilutive.

Note 8. Commitments and Contingencies

Purchase Obligations

We enter into various purchase obligations in the ordinary course of business, generally of a short-term nature. As of November 30, 2025, we had an aggregate of approximately $25.7 million in contractual obligations which consisted of $13.5 million in purchase commitments for food related to restaurant operations and $12.2 million related to the construction of new restaurants.

Legal Matters

On December 9, 2024, a former employee filed a putative class action complaint in the Superior Court of California in Los Angeles, individually and on behalf of others similarly situated, against the Company alleging certain violations of California labor laws. The complaint alleges various wage and hour violations under the California Labor Code and related statutes. Plaintiff has also served a Private Attorneys General Act (“PAGA”) notice for the same alleged wage and hour violations. The Company will continue to vigorously defend its position in this matter. The Company is currently unable to estimate the range of possible losses associated with this proceeding.

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

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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 $36 thousand and $39 thousand for the three months ended November 30, 2025 and November 30, 2024, respectively. The Company’s effective tax rates for the three months ended November 30, 2025 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 differences related to the tax credit for a portion of the Social Security and Medicare taxes (FICA taxes) paid on employer tips.

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 November 30, 2025 was appropriate.

On July 4, 2025, the President signed into law, the reconciliation tax bill, commonly known as the "One Big Beautiful Bill Act" (OBBA). Notable corporate provisions include the restoration of 100% bonus depreciation; the creation of Section 174A, which reinstates expensing for domestic research and experimental (R&E) expenditures; modifications to Section 163(j) interest limitations; updates to the rules for global intangible low-taxed income (GILTI) and foreign-derived intangible income (FDII); amendments to the rules for energy credits; and the expansion of Section 162(m) aggregation requirements. OBBA did not have a material impact on the Company’s effective tax rate or income tax expense for the three months ended November 30, 2025.

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Note 10. Fair Value Measurements

The following table sets forth the Company’s assets measured at fair value on a recurring basis as of November 30, 2025.

	Level 1				Level 2				Level 3				Total
	(amounts in thousands)
Assets:
Certificate of Deposit	$	—			$	524			$	—			$	524
Treasury bills		20,652				—				—				20,652
U.S. Government Agency debt securities		—				21,919				—				21,919
Total assets at fair value	$	20,652			$	22,443			$	—			$	43,095

The Company’s financial statements include cash and cash equivalents, accounts and other receivables, accounts payable, accrued expenses and other current liabilities, and salaries and wages payable for which the carrying amounts approximate fair value due to their short-term maturity. The fair value of our Treasury notes are valued using Level 1 inputs of the fair value hierarchy. The fair value of our Certificate of Deposit and U.S. Government Agency debt securities are valued 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 fair value of payments due to or from Kura Japan is not determinable due to its related-party nature.

Note 11—Segment Information

The Company operates as one reportable segment: company-owned restaurants and in one geographic area: the United States of America. The Company does not have intra-entity sales or transfers. Sales represent sales of food and beverages in restaurants. The Chief Executive Officer, who serves as the Chief Operating Decision Maker (“CODM”), evaluates performance and allocates resources based on sales and operating income (loss). The CODM does not review segment assets at a level different than what is reported in the Company’s Consolidated Balance Sheet.

Reported segment sales and expenses are presented below:

		Three months ended November 30,
		2025				2024
		(amounts in thousands)
Sales		$	73,455			$	64,456
Restaurant operating costs:
Food and beverage costs			21,934				18,667
Labor and related costs			23,898				21,235
Occupancy and related expenses			5,838				4,754
Depreciation and amortization expenses			3,980				3,091
Other costs			11,805				9,341
Total restaurant operating costs			67,455				57,088
General and administrative expenses			9,551				8,733
Depreciation and amortization expenses			129				109
Total operating expenses			77,135				65,930
Operating loss			(3,680	)			(1,474	)
Reconciliation to net loss:
Other expense (income):
Interest expense			18				13
Interest income			(674	)			(565	)
Loss before income taxes			(3,024	)			(922	)
Income tax expense			36				39
Net loss		$	(3,060	)		$	(961	)

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Note 12—Investments

As of November 30, 2025 and August 31, 2025, the Company’s investments are summarized below. The Company has one certificate of deposit of $0.5 million, which is restricted to funding a collateral account relating to a standby letter of credit. Based on the evaluation of credit risk factors guaranteed by the U.S. government, the Company has concluded that an allowance for credit losses is unnecessary for its investments.

	November 30, 2025
	Amortized cost  basis				Unrealized holding gains				Unrealized holding losses				Aggregate fair value
	(amounts in thousands)
Current
Available-for-sale:
Treasury notes	$	14,795			$	17			$	—			$	14,812
Certificate of deposit		524				—				—				524
Total Current	$	15,319			$	17			$	—			$	15,336
Non-Current
Available-for-sale:
Treasury notes	$	5,840			$	—			$	—			$	5,840
Held to maturity:
U.S. Government Agency debt securities		22,006				—				(87	)		$	21,919
Total Non-Current	$	27,846			$	—			$	(87	)		$	27,759
	August 31, 2025
	Amortized cost  basis				Unrealized holding gains				Unrealized holding losses				Aggregate fair value
	(amounts in thousands)
Current
Available-for-sale:
Treasury notes	$	14,463			$	—			$	(23	)		$	14,440
Certificate of deposit		524				—				—				524
Total Current	$	14,987			$	—			$	(23	)		$	14,964
Non-Current
Available-for-sale:
Treasury notes	$	1,468			$	—			$	—			$	1,468
Held to maturity:
U.S. Government Agency debt securities		28,074				—				(69	)			28,005
Total Non-Current	$	29,542			$	—			$	(69	)		$	29,473

The following table sets forth the maturities of the Company’s investments as of November 30, 2025 and August 31, 2025.

	November 30, 2025								August 31, 2025
	Carrying amount				Fair value				Carrying amount				Fair value
	(amounts in thousands)								(amounts in thousands)
Available-for-sale:
Due within one year	$	15,336			$	15,336			$	14,964			$	14,964
Due within one year through five years		5,840				5,840				1,468				1,468
	$	21,176			$	21,176			$	16,432			$	16,432
Held to maturity:
Due within one year through five years	$	22,006			$	21,919			$	28,074			$	28,005

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Note 13—Subsequent Event

On December 29, 2025, the Company filed a universal shelf registration statement on Form S-3 (the “Registration Statement”) with the SEC in accordance with the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement registers Class A common stock, preferred stock, depositary shares, warrants, subscription rights, share purchase contracts, share purchase units, and any combination of the foregoing, for a maximum aggregate offering price of up to $100.0 million, which may be sold from time to time, subject to the Registration Statement being declared effective by the SEC. The terms of any securities offered under the Registration Statement and intended use of proceeds will be established at the times of the offerings and will be described in prospectus supplements filed with the SEC at the times of the offerings. The Registration Statement has a three-year term once declared effective by the SEC.

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

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

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, stock-based compensation for restaurant-level employees 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 by the performance of our restaurants.

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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, 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, 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 and investments.

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

		Three months ended November 30,
		2025				2024				$ Change				% Change
		(dollar amounts in thousands)
Sales		$	73,455			$	64,456			$	8,999				14.0		%
Restaurant operating costs
Food and beverage costs			21,934				18,667				3,267				17.5
Labor and related costs			23,898				21,235				2,663				12.5
Occupancy and related expenses			5,838				4,754				1,084				22.8
Depreciation and amortization expenses			3,980				3,091				889				28.8
Other costs			11,805				9,341				2,464				26.4
Total restaurant operating costs			67,455				57,088				10,367				18.2
General and administrative expenses			9,551				8,733				818				9.4
Depreciation and amortization expenses			129				109				20				18.3
Total operating expenses			77,135				65,930				11,205				17.0
Operating loss			(3,680	)			(1,474	)			(2,206	)			(149.6	)
Other expense (income):
Interest expense			18				13				5				38.5
Interest income			(674	)			(565	)			(109	)			19.3
Loss before income taxes			(3,024	)			(922	)			(2,102	)			228.0
Income tax expense			36				39				(3	)			(7.7	)
Net loss		$	(3,060	)		$	(961	)		$	(2,099	)			218.4		%

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		Three months ended November 30,
		2025					2024
		(as a percentage of sales)
Sales			100.0		%			100.0		%
Restaurant operating costs
Food and beverage costs			29.9					29.0
Labor and related costs			32.5					32.9
Occupancy and related expenses			7.9					7.4
Depreciation and amortization expenses			5.4					4.8
Other costs			16.1					14.5
Total restaurant operating costs			91.8					88.6
General and administrative expenses			13.0					13.5
Depreciation and amortization expenses			0.2					0.2
Total operating expenses			105.0					102.3
Operating loss			(5.0	)				(2.3	)
Other expense (income):
Interest expense			—					—
Interest income			(0.9	)				(0.9	)
Loss before income taxes			(4.1	)				(1.4	)
Income tax expense			—					0.1
Net loss			(4.1	)	%			(1.5	)	%

Three Months Ended November 30, 2025 Compared to Three Months Ended November 30, 2024

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

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

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

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

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

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

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

Interest expense. Interest expense was $18 thousand for the three months ended November 30, 2025 compared to $13 thousand for the three months ended November 30, 2024.

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

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

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 condensed 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 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.

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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 November 30,
		2025				2024
		(amounts in thousands)
Net loss		$	(3,060	)		$	(961	)
Interest income, net			(656	)			(552	)
Income tax expense			36				39
Depreciation and amortization expenses			4,109				3,200
EBITDA			429				1,726
Stock-based compensation expense(a)			1,099				1,126
Non-cash lease expense(b)			664				720
Litigation(c)			243				—
Adjusted EBITDA		$	2,435			$	3,572
Adjusted EBITDA margin			3.3	%			5.5	%

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

(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 includes expenses 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.

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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 not be affected 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 November 30,
		2025				2024
		(amounts in thousands)
Operating loss		$	(3,680	)		$	(1,474	)
Depreciation and amortization expenses			4,109				3,200
Stock-based compensation expense(a)			1,099				1,126
Pre-opening costs(b)			263				356
Non-cash lease expense(c)			664				720
General and administrative expenses			9,551				8,733
Corporate-level stock-based compensation in general and administrative expenses			(918	)			(947	)
Restaurant-level operating profit		$	11,088			$	11,714
Operating loss margin			(5.0	)%			(2.3	)%
Restaurant-level operating profit margin			15.1	%			18.2	%

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

(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.

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Comparable Restaurant Sales Performance

Comparable restaurant sales performance refers to the percent 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 full calendar months by the end of the accounting period presented due to new restaurants experiencing a period of higher sales upon opening. For restaurants that were temporarily closed the comparative period was also adjusted accordingly.

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 and spending behavior;

•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 November 30,
		2025		2024
Comparable restaurant sales performance (%)		(2.5)%		1.8%
Comparable restaurant base		62		45

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 have 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 November 30,
		2025				2024
Restaurant activity:
Beginning of period			79				64
Openings			4				6
End of period			83				70

Liquidity and Capital Resources

Our primary sources of liquidity and cash flows are cash and cash equivalents on hand and cash provided by operating activities. Our primary uses of cash are for operational expenditures and capital investments, including new restaurants, costs incurred for restaurant remodels and restaurant fixtures. The significant components of our working capital are liquid assets such as cash, cash equivalents and receivables 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 and short-term investments will be sufficient to fund our lease obligations, capital expenditures and working capital needs for at least the next 12 months. We also maintain a Revolving Credit Agreement with Kura Japan, of which the maturity date has been extended to April 10, 2028 pursuant to the Third Amendment with Kura Japan.

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

Summary of Cash Flows

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

		Three months ended November 30,
		2025				2024
Statement of Cash Flow data:		(amounts in thousands)
Net cash provided by operating activities		$	529			$	4,362
Net cash used in investing activities		$	(12,663	)		$	(12,500	)
Net cash provided by financing activities		$	1			$	64,829

Cash Flows Provided by Operating Activities

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

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

Cash Flows Used in Investing Activities

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

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

Cash Flows Provided by Financing Activities

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

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

Material Cash Requirements

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

Recent Accounting Pronouncements

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

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Critical Accounting Estimates

Our discussion and analysis of operating results and financial condition is 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, 2025. 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, 2025 for a discussion of our critical accounting policies and estimates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes to our market risk during the three months ended November 30, 2025. 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 Annual Report on Form 10-K for the fiscal year ended August 31, 2025.

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) and 15d-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) and 15d-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.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

For a description of our legal proceedings, see Note 8 – Commitments and Contingencies, in 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, 2025. 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 three months ended November 30, 2025, 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.

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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.

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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: January 7, 2026		By:	/s/ Jeffrey Uttz
			Jeffrey Uttz
			Chief Financial Officer (Principal Financial Officer)

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FAQ

How did Kura Sushi USA (KRUS) perform financially this quarter?

For the three months ended November 30, 2025, sales were $73.5 million, up from $64.5 million a year earlier. Net loss widened to $3.1 million, compared with a $1.0 million loss in the prior-year period, and basic and diluted net loss per share increased to $(0.25) from $(0.08).

What happened to Kura Sushi USA (KRUS) comparable restaurant sales and traffic?

Comparable restaurant sales declined 2.5% for the quarter ended November 30, 2025. This was driven by negative traffic of 2.5% and flat price/mix compared with the same period in 2024, which management attributes to lower consumer spending in the current macroeconomic environment.

How are tariffs and costs affecting Kura Sushi USA (KRUS) margins?

The company reported that tariffs had a considerable impact on its business, particularly food and beverage, construction, equipment and other restaurant operating costs. Food and beverage costs rose to 29.9% of sales, up from 29.0%, and total restaurant operating costs increased to 91.8% of sales, contributing to a wider operating loss.

How many restaurants does Kura Sushi USA (KRUS) operate and what are its growth plans?

During the quarter, Kura opened four new restaurants, ending the period with 83 restaurants in 22 states and Washington, DC. Management expects to open a total of 16 new restaurants in fiscal year 2026, which it expects will increase both revenue and restaurant operating costs.

What is Kura Sushi USA (KRUS) liquidity position and debt usage?

As of November 30, 2025, the company held $35.4 million in cash and cash equivalents plus short- and long-term investments, with no outstanding balance under its $45.0 million revolving credit agreement with Kura Japan. It believes existing cash, investments and cash from operations will cover lease obligations, capital expenditures and working capital for at least the next 12 months.

What is the new $100 million shelf registration mentioned by Kura Sushi USA (KRUS)?

On December 29, 2025, after quarter-end, the company filed a universal shelf registration statement on Form S-3 to register up to $100.0 million of Class A common stock, preferred stock, depositary shares, warrants, subscription rights, share purchase contracts and units. These securities may be sold from time to time over a three-year period once the registration is declared effective, with specific terms and uses of proceeds to be detailed in future prospectus supplements.