CBRL - Earnings call transcript Q3 2021 | Cracker Barrel Old Country Store, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Cracker Barrel Fiscal Year 2021 Third Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Jessica Hazel, Senior Director, Investor Relations. ahead. go Please,

Jessica Hazel

In morning, measures fiscal Good we to Barrel's April refer quarter Cracker a this XXXX. and Thank we XX, the call, conference and third call quarter will results. third our XXXX release non-GAAP morning, press and third release press on financial you. to announcing welcome this for webcast. issued ended This quarter

a information performance. gains asset earnings excluding on company is to company's quarter sale-leaseback This from exclude are substitute the press enhanced in recognized be the non-GAAP prepared from results the not of net information amortization information believes considered from understanding reconciliations third the the include financials. The and income an the financial adjusted with the the pages our per of The to transactions non-GAAP last investors or to GAAP. related or these financial non-cash release The share financial intended impacts. for accordance with provides of its as in measures tax isolation GAAP items that

call Senior the Interim of President me On Jen CMO, Doug Barrel's outlook. are will President business with Tate. the CFO, Doug Vice and and Vice Couvillion; Senior and the and and Sandy financials CEO, Sandy this President and review review Cracker begin with Cochran; morning a will

uncertainties actual known up many call, open for as are future involve Doug expectations management cases control questions with expected the information. release results company's call beyond the future then and We the be in caution in results and statements to may their readers and management's which statements, results description and in may described SEC. events. uncertainties and operating are detail in this will made end found Jen. factors or cause listeners our the We considering risks regarding for beliefs of On that forward-looking of furnish that of press Sandy, and in These of or the our at materially are and the that to summarized file statements affect cautionary risks reports the forward-looking from could Many and we differ are expectations. by

on and company as is information undertakes Barrel's update valid call no to this the required law. turn call CEO, as it, Sandy? may today's over date I'll Cracker shared the obligation of Cochran. Sandy the to Finally, under applicable President and now be except

Sandy Cochran

morning, for our good Thank and everyone. exceeded We joining third call. delivered expectations. you you today's strong which appreciate us quarter results, I

this XXX strong of basis our This the quarter the strengthen to with on combined progress to to continuing largely by improved performance, pandemic driving took the step-up Our sales It managing progress financial did elevated enabled sales dividend we quarterly an points us balance second retail that growth made operating our third and per declare off-premise in that recovery dine-in significant income XXXX. over we job we the quarter, margin in debt, a delivered paying traffic, due to $X was down on and excellent operators share. the to compared actions quarter. support double-digit sales during sheet our

quarter. I'm start down as committed been to our path them we dividend capital has reestablishing allowed a glad that part strategy allocation quarterly results of to overall Board delivered and this Our this that

as evaluate our and forward, consistently structure to continue our create shareholders. all value will prudently ways capital in done, to we for of have alternatives Going we allocate that

our performance in restaurant improvements monthly sequential sales XXXX compared the delivered we to when quarter. quarter, fiscal third the During

second, and January, sales, believe factors: the the approximately week number of to restrictions; was Our in initiatives progress of week our average and restaurant first, $XX,XXX approximately We per sales some on increased strong least its April. capacity the a with driven factors. sales from some the for per dine-in retention grew traffic; growth vaccinations expand further I'll at fiscal this favorable volumes and quarter, remained XX% the of by consumer. relaxation $XX,XXX these little lastly, of even during and off-premise stimulus above package impact of on a sales, restaurant impact of of which of the

on were Regarding quarter. average, capacity restrictions, effective operating our the XX% at approximately during third locations capacity

those than trends Our during week. the the less weekday to quarter, that sales up we're capacity fact in improvement we which the part bump showed larger weekend to during against likely attribute constraints

As runs in well our the which which home branding Dentsu, integrated April. making take style of care ingredient. national employees. family our of advertising, concept as the guests forward initiatives like normal our beer as media This It third evolving social with initiative, launched as initiatives offerings, weekday more as we than previous our investments wine family billboards. contributions of sales sales and taking was launch Key to advertising and retail calls I've a new all to more developed TV our highlights balance these the we food, progresses. pre-COVID return from recovery weeks. anticipate six favorable campaign summer schedules. being from continue program, agency further like performance. and which our to We with their emphasizes as we resume of travel digital supported year, and evolution care This an through our we refresh and to Digital The campaign, menu care our that and look of routines fully quarter our the vacation curating XXXX each monitor and spoken on to situation which secret for our new support streaming move recovery the sales people continued traffic of and and is contributed is welcoming

more sales As XXX% fiscal off-premise increased dine-in and strong grew, volume our third XXXX quarter. remained over normalized the

when off-premise an April stores closed off-premise-only volumes operations fact, operating room were the sales our year outperformed In and were prior dine-in in model.

past includes off-premise and channels include over which either by far To-Go up XX of for of remains We the all our largest pick XX% curbside roughly delivery third-party months. in-store our or which continue be Individual with pleased in off-premise channel, accounting To-Go, the to individual growth sales catering.

enhancements to During But our the in guests expect streamline the anticipate the some the felt who will of guest during volumes. more rooms. we've individual retention we we enhance return experience. up quarter, process to dining dining experienced do We To-Go and home better pandemic and us at sales comfortable increase in solid order curbside to long-term picking joining an made our our

XX% channels strong overall value will our proposition help believe new in at room packaged business. a we channel normalized been has vendors as guest challenging we during environment. launched pandemic us over and our teams believe and Heat grown has off-premise meals, same rapidly how with Third-party growth as box quarter volumes start per has increased. believe Catering But of landscape new off-premise more which We introduced our the this sales delivery at remainder during catering retention approximately offerings the as further Serve additional and have for customers a our decline the person the affordability. occasions of and with reopened. adapting special new occasion for as sales held rooms pleased we're done sales, start of accounts includes n’ to may such other have catering off-premise period times We and to dining have Catering sales since a COVID. demand which individually job third-party third the with great

test Retail XX from biscuits. off-premise, to early while by on We're achieved chicken been our location the week it remains learnings the additional will of with we've test extending quarters. strong gross once encouraged over you and Lastly price single again margin. retail we've value merchandise brand coming the this and always delivering and locations with virtual provide a further brand our points. expectations been updates for while exceeded differentiator unique shop our sales the has The improved

respond During strong we've the to one our deliver and to dining positively have the sales operations as the and Teams dining, The nimble have of back recent positive been in and performance response convenience them a purchasing of and encouraged applying the been returned have teams more shopping quite levels to collection indoor on in merchandise. into location. inventory continued and seeing we've we're merchandising and feel guests lower pandemic results. of curated by strategies to our seen look learnings

saw our this driven we picking seen the unique up orders. off-premise early quickly pandemic continued being category. and and strong have men's merchandise growth example, was believe in men's We from new this growth customers For source sales rates in by and in assortments attachment

fiscal above to quarter, sales continue As optimistic the XXXX will we look levels. that we're retail fourth

to volumes of be challenges. the remained throughout quarter third we $X Sales to some been during issues Maple performance performance margin their the for inventory an the the supply there levels sales third retail recent versus ongoing could recovery have pandemic believe above moderation the and basis, months industry sales over our potential However, And very quarter. due XXXX chain Street impressive. result related on would and fiscal in AUVs annualized well quarter million. during in

been in a expenses ability model. support we've of business addition, recent controllable their pleased economics In manage store and to with our solid

during are opened During Barrel the in with year, Tennessee Street and been stores meet with situated and in sales focus pleased openings. uniquely preparing demand. is and on craving Maple the a growth pleased quarter. store's that the the After with store the guests Street performance are its Cracker location believe quarter, our this achieved we past We're future we community for very and community to volumes Maple connection

locations Our a executing in staffing environment. some locations excellent a We that challenges, continue difficult operators had did in both brands today. encountered at of job an which number

implemented field quickly recruit, and to positive have hire we've staff seen train home and already. Our results several and leaders strategies office employees

family our We and supply guest leadership, in that company ingredient operators these cared feel our chain and work like diligent and our our product our strong through employees supply tighten walk challenges fully as are are we and availability operators the of areas Through front suppliers. mitigating these ensuring that from both and chain when distribution Additionally, faced the we remain they both doors. for guests with sourcing delays. impact ongoing across supported disruptions

our And the like and to further of I'll our program XX recognize both I hand Wade refreshment that, accomplished veteran on provide third insight a part and already Doug, meaningful thoughtful from Before the ask to his past management our you of industry as XX-year our the Board director months the to we've with Doug? over diverse and will Doug and valuable and over Chip planning He's benefit and details it to bring our Chip's guests succession of Board to perspective team. will shareholders, and addition financial added with Board. employees the restaurant talent. I'd quarter.

Doug Couvillion

Sandy, and morning, you good Thank everyone.

to normalized which We quarter, the expectations. performance our in quarter third are pandemic year improvement The at point exceeded levels fiscal pleased the sales during us with sales our in started. XXXX closest has the since our

In sales. X.X% we significantly margin progress more the and our operating addition, of made third income we adjusted total on quarter than anticipated was operating in

Our than business performance in margin our the retail was sales primary expected driver especially of outperformance. better our

relative detailed stores are prior third the As in year at the in operating benchmark I an point will April off-premise-only get the quarter of model March believe understand which on financials, this be late in from to we the of into time the is both prior commenting to XXXX, business year. our our I through performance fiscal given

For reported the $XXX we of million. revenue quarter, third total

rooms capacity that X.X%. increased versus third dining mission retained quarter the decreased with sales safe can we nearly to-go quarter. comparable approximately dine-in XXXX, to of our With our and quarter delivery in XX% sales rates, to retail XXX% more fiscal revenue rooms our the prior reopening accelerated volumes quarter. experience revenue people, a quarter. the third knowing on year restaurant second and restaurant pleasing XX% in store the Compared improved return third of increased reaching dining Our our Even individual guests, sales they and and delivers of third open our the significantly

volumes a we'll gives For a nearly return volumes. to that the see sales our off-premise we store, XXX% quarter performance us for weekly contribution of from were This pre-COVID dine-in total off-premise average positive weekly to increase third once quarter average sales fully confidence XXXX. $XX,XXX, the

XXXX. per our of pleased performance, had retail strength far over be from and rate to all store the fiscal of toys. apparel retail the with saw such anticipated than XXXX, quarter retail the metrics We Comparable strong convenience, was food to across conversion XX.X% the better sales And retail during third in continue we increases and versus quarter. We ticket. which as purchased operational units number purchase restaurant guests and retail increased

Moving on to expenses.

offset XXXX to goods Our of quarter mix cost reminder and sales, sold is of sold rate. Restaurant has total third ongoing cost total We prior the with inflation of elevated higher fourth of of a of fiscal waste step-up to and largely as lower at commodity favorable a goods maintain year quarter. quarter, ability inflation for which X% goods newer cost by performance food significant which sales to from X.X%. the Retail pricing full and of cost even throughout goods driven due approximately the retail was category. primarily moderate quarter revenue, commodity both the was anticipate levels in to merchandise the a benefited the price seasonal our pork XX.X% with

expenses XX.X% fiscal favorable also of prior to at both Third were the XXXX. to quarter labor revenue year and related and

million took third from in actions in approximately of XXXX. the benefited fiscal comparison savings we two-year $X.X quarter Our the cost with associated

ability levels sales increase higher offset of much hourly delivered our Additionally, increased inflation. levels to staffing later of helped which in wage of stores the the to quarter, productivity ahead our as impact

COVID fourth approximately higher severe by two business third-party expenses second, For explained anticipate inflation XX.X% storms are: XXXX utilities revenue, XXXX. drivers of a a on our of to result as Adjusted compared factors X.X%. transactions. continue but unfavorability was unfavorable of prior but deleverage Portion future. temporary incremental premise for during the X% strength the model to first, versus sales can anticipate to the be basis including channels; rent expense of fees we margins which expense higher to of in a impact and foreseeable will our and constant to quarter, the the supply year, was February, this as other increase due of of to wage sale-leaseback the primary expense mix these the We winter changes our operating favorable result

compared Moving fourth quarter expense beyond the approximately of our general administrative with which margins, quarter third XXXX. third in largely results. quarter anticipate to were the quarter $XX.X flat the store-level and million, line will third be We is in G&A expenses

on performance third Our was culminated and recognized the GAAP than the the effective sale-leaseback the range earnings rate tax the our due $X.XX for transactions. XX%. anticipated $X.XX quarter from the higher-than-expected diluted of to be These income. which pretax share in expect and third per XX% adjusting fourth tax effective to lower was earnings results noncash for when of asset per adjusted XX.X%, quarter rate to share now our of we We diluted of of gains the amortization quarter in strength

an and EBITDA In our the sales managing end detailed the third cash from balance out maintain results. diligent As recover our quarter to close EBITDA our generated we operations EBITDA our to quarter, speak our quarter, results second we $XX and I strength million want $XX approach third million. the expenses, In over improvement third million, continues cash at to quarter was in XX% To financial sheet. the was to $XXX of from grow. quarter,

during debt $XXX As debt of $XXX of million with million. balance quarter our we strong of generation, cash a third us down remaining paid result leaving

reduce up debt $XXX $XXX to reduction bring fiscal fourth would by further year. to the quarter debt million to our our in which total during million expect We the

to I'd coming look like to recovery been a our sales we recovery quarters. comments. expectations, make and with few As additional the We've anticipate year-to-date pleased over continued near-term

to total We XXXX expect approximately flat revenues. to fourth revenues total fourth quarter the quarter be

improve the of the will quarter below quarter also XXXX, operating third XXXX. but remain of fourth margin sequentially quarter income We expect compared to fourth

expectations. are walk will as store begin with underlying sales lessened. capacity the you believe further recover the assumptions me We our tailwinds. Let restrictions through our I'll comparable

of our the compared fiscal structure results improved and comparing several when the cost believe savings Additionally, We to headwinds to fourth we also our which there are pandemic, versus benefit XXXX. targeted took confident we're will at quarter XXXX. onset our cost actions in the expectations

quarter, the the step-up the X%. expect pricing strong pandemic modest fourth the even and fourth quarter high increases will value offset maintain that pricing First, in that inflation during the to not with we took we a commodity wage to proposition in environment

retention to we current anticipate efforts. we hourly environment, field additional as navigate the staffing employee-related leadership support and Second, and staffing store expenses

XXXX the rent call positioned our over turn that, expense pandemic liquidity to quarter with to well us these the incremental have reminder with the bolstered associated company's transactions, We expectations. we fourth I on has pandemic. deliver as which Lastly, during believe the the for throughout sale-leaseback a the operator And will work questions.

Operator

Thank go you. comes question of [Operator Gordon Instructions] first Jeff Today's from Farmer Please ahead. Haskett.

Jeff Farmer

you they May the labor as we In did to remarks, levels? on current Hey, questions where you. good sit versus of staffing A couple late touch pre-COVID prepared a are morning. were But with. of here Thank levels in handful what these. your in start

Sandy Cochran

Okay, are I still morning. We're got anticipating. staffing of biggest our continue recruiting we've the both of on this a that is categorize help terms in be on focused we Sandy. dealing challenging. to is in in the that for for to demand. improved, you way our that with We've The of it's it's one our our to designated that initiatives way, store staffing Jeff. how the challenges either experiencing the or About it continues – of although This say to operators believe waiting chain XX% retention. critical category situation current we as and of was Good environment. XX I'll in about concern. the we're relative But number the

Jeff Farmer

more And ones. then quick just two

the early be helpful into in to end as So in expect the we end of how into that of July, terms benefits terms early process? get and June unemployment extended and of about hiring or thinking the supplemental you do

Sandy Cochran

moves the states with now to at unemployment have enhanced industry environment. industry an What going us XX of I that benefits discontinue next up. opens flow. the is that's facing about at the you of sets still America is be our the Amazon was will they've we're that of new help certainly applicant the got. a once the factors additional and have everybody's month one environment or But clear, hiring I want what be made in we've staffing as of benefits is a But companies restaurant on expecting also impacting the that mostly increases if sort those lot impact the the got similar the So kind skill we staffing we're lot of will been and really competition like competitors to for will to employment in so, that in guess decision

All to believe of wage that is going competition impact I continue to inflation.

help So some will the doesn't all sense it in but problem. it alleviate

Jeff Farmer

And one, pretty then final straightforward. is this

I So quarter. some commodity might the have in this missed but inflation of X% fourth fiscal the

into carrying we as thinking move look fiscal your how – fiscal be So year? XXXX, commodity should into next inflation about you

Doug Couvillion

Yes. Thanks. That's a great question.

the that with some from in caused that in relatively will call low that terms inflation, fourth quarter on just being commodity was kind we're on as of And that of think I bacon. expect for commodity over inflation. and really the pricing pork XXXX I'd out of We're focused commodity some we lapping us. moderate the and coming bellies that inflation of amount into level. move it's an changes as unusual exports I

Jeff Farmer

you. Thank Okay.

Operator

question with comes And MKM. today Levy next our Brett from

Brett Levy

additional just the level, efforts think try cost what starting them, you the guess, incremental door you training, to drive do enter benefits? And retain how much labor you back productivity to to to to do accelerate the it's added just to Thanks the applicants Great. think into also do whether you to just, we do it's taking but manage technology call. to the strategically labor then you again unit try not for go to if going I need with your get some at just can side? to incrementally what the

Sandy Cochran

of add take at if a at which to a of got I'll the that Brett, things a and something some let long-term of that think on. and lot it I Doug me know, short-term end. some pressures, There's touched just sort – short-term I we've in since a lot stab number want question

stores, program lost we're been recruiting, a – events had We're which all of our employees of them the will our think short got we have be try function that We've set some we're staffing – of a focus actually to work skill certainly reach offering. doing former will codes in We've from the referral has encouragingly to porch clearly we've with wage rates We've – in for faster. up most gear that more. back to competitive we just employees markets that the we're for supplement about as got the to programs. might even doing here successful. the contact actually of everything in of – course that we're we're out those up number trying front at term done centralized that because being So starting sure certainly big to a store terms employee we're challenged to that can the pandemic, the get be to we're offering over able try things, that

guaranteed there to try short We to is you for the want are we employer get do are term, And be kitchen and do be or things we us employees to of retention can come bonuses then stay. work you to your in also when perks meals focused extra have. we're shift the and of we on need that like and and to that bonuses sure choice we an both – the that to point

teams training productivity I emphasis a do of up, are think kind for the to to And the flexibility. lot get, is cross-training to in we ensure field general our have. kind of need offsetting that trying the

that do applying, training in and to would Cracker want stay we that that I we ensure is And are bunch that be And to them can, career if So treat effective. positions our a to whole an the a us. and have at we with of that, employee new employees that term, to employees Barrel. need to benefit some way inefficiency, competitive, are packages can one-time. as is have technology our a able mitigate that. you with Longer we're apply to wage as well you of to think going multiple there fill

the do some of ordering focus lot or the them our example, allow move And that us we cash. will volume stores. takes continue system a online. in it to the to And to labor of use the the off our can pressure will guests that of For our run online. things new digital pressure we look system the store work the that how work It that pay off our the can allow food labor do at and takes back streamlines we in to with And the we of like more allow simplifies house just to and -- new to our functionality more that our managers restaurants.

and So of those apply we couple a to examples impact have of, labor. just both, facing how can an house, are guest technology on the of back

Brett Levy

right your do are questions, XXXX. about, to an level, informed of shortfall about I'll now? many about, what's into on you others employees, And talked you approach and we end you go XQ, technical pricing. also, do up two think just two we a but for not -- let XXXX inching the and have And And hourly cohorts And as then then, then, chance? at challenged. think pricing should that How pre-COVID? you How think just talked what you had

Sandy Cochran

x-number a for I number. forward in look that first we number. we you -- I particular So needs give It's what need as it know, question, way critical look think on to stores and looking employees. is in looking the not of out really going the at skill you're it, because, more, not I'm certain Basically, of which we're codes. as have We ramping. of sort some

at critical. we helping stores. So the wanted level on it XX% as concern about very of are are focused and I way characterize But to those a XX%, sort

pricing about our speak these guests, offering we've pressures announced brand in to we very inflation value. pricing what understand offset we we are values our careful are we that, have strategy. of value want And be how which to very want these that And do versus we you both, be wage. I'm our disrupting much to to -- Doug commitment our and our in -- very to forward I announced. to that short-term going let commodities Doug, move We But, thinking need And our on and long. not mindful careful being to menu. don't about, want strategy? to reputation pressures and

Doug Couvillion

of And well, said, think, about as of we to pricing But quarter. beyond of but next X%, to think, be close haven't going next that's about, structure. wages attention balance maintain again, of we'll say with paying in pricing going in our no, we've the fiscal talked are to year I consider as fourth Sandy not I terms year, pricing -- talked pricing, carry short-term we yet. a very trying for with what's and pricing going really we and cost goods on much what just think that, into

Brett Levy

particular informed. And or are broad-based, then, just those one Are the any and last in regions? question, of the challenged XX% those, the

Sandy Cochran

are And see more, it's you Well, D&As. broad. that but certain probably broad. There's those might

Brett Saul

you. Thank

Operator

Stump today Our comes Longbow Alton from go question ahead. Please with next Research.

Alton Stump

Great. congratulations Thank impressive and on you results. the

costs, fiscal to that versus XXXX something the or ask the pricing cost better bleeds Just of the labor to that short-term is kind into year of XXXX? part front is commodity I back wanted mean, as pressure, on that a -- front,

Doug Couvillion

we're the bacon. seeing think to to X% And that related I pressures short-term. I the think Alton, are that was relatively again related

And there. some specific issues

probably give about, it I over as the a fiscal next into stronger two think opinion prepared to three the months, guidance have as markets specific areas We're we'll are think, specific for XXXX. not on we moderate, which move forward XXXX. But that. risk or will really move I and

Alton Stump

refresh. Makes just sense, And a then as helpful. doing you you mentioned that are billboard Sandy,

this doing pretty of will be people out piece big recall advertising that's business as I our a presumably As summer. road especially, ultimate trips

on how So previously? that could it's color entails you as what what different give than just you had refresh some and

Jen Tate

flipping to which a we our longer-term billboards. ingredient our The that curating including the our this about in our right? process And billboards. care your about and X,XXX will in spoke digital larger food that across service and story idea we secret to and of is Hi, take the are we And over life, is our and of of they bring right is retail this campaign lots care model our hospitality over too is care. is to they billboard now which and care our campaign, Jen. part from making that of in take question scratch refresh Sandy a and course, that that bring channels TV our life So, boards tell these care item the

we season very right summer just long for travel cooped And up again what as time. friends hope are time roads busy the for in so be being really a after a to families now take will flipping those and and believe

we're excited to and the life. they for bring the our people billboards to So, how campaign on see road care

Alton Stump

Great. much. hop queue. in Thanks the back I’ll so

Operator

our question ahead. with Please comes Securities. go today Bartlett from Truist next And Jake

Jake Bartlett

Great. with past same-store monthly Thanks the you been thinking question. the cadence I'm give you've taking know May. from sales. hesitant the or But I can hoping really to kind help I'm to April quarter-to-date for in us of about and

Just we we to about stronger And also, us we kind important weaker? in give the that could about color whether about it great. how gauge would as try fourth think than guidance the Could impact offer how any you or whatever may of on of was think you think that as conservative perhaps be May be. stimulus. trying Just to as stimulus quarter April

Sandy Cochran

that Well, right. let Jake. stab a me take at All

and -- stimulus, of quarter and recovery we were probably the helped to think certainly we was pandemic the during sequential strong think to seeing reflects able spend, by by also that monthly willingness the we which savings the accumulate we're that. surprising people while definitely amplified that demand pent-up the sales through it and pace certainly at are not encouraged and So, third

of Day impact what may to of quarter But off-premise. pleased about We're our But Colonial seeing from that and had beer and been that Memorial would and out Day both the and have side Jen's travel to on and point Although we as I are related forward just pipeline choppy. mentioned been fourth have have breakfast yesterday on in on. families the Jen summer somewhat. is strong. will getting back check softened wine performance Mother's to general. week. our positive she add business. value assuming May next on with conscious, traveling made looking our terms our work have this couple that we're in so premium started mentioned impact the normalized to we shift during The people very in routines We're very think to to optimistic guests this a are impact week the somewhat And as dine-in and in very and their weeks that which we're has It to general, last

Jake Bartlett

just breakfast you That's then thoughts than recovery helpful. on And lower any trajectory, the but in? can why dining you impressive maybe family you Great. Just offer whether Can why markets is? just it's your even casual thoughts think the trailing? that terms you're we're it give And us in -- really of whether of dining what it's it's type Barrel with your is seeing is competitors. Cracker

Sandy Cochran

us It for the the a calls there's that breakfast. daypart most number It's you're all is been we've and to continues is sort biggest the to to the them. the do probably most it's the challenged. alluding be about that work connected home. two couple one to to that routine on a It's to continues one disrupted. the issues at be That a Well, talked of people easiest of Probably of relate to I think

are expecting part see we So, hoping I had and the next recovery in the biggest breakfast is have think to we the one. few And then over travel, certainly not months. day the probably the travel, but

Jake Bartlett

question then percentage of share that you contracting now? of the level Could your And contracted -- Great. a you've In is what commodity shared what commodities. past on last for. quick

Doug Couvillion

Sure. Yes.

quarter, up. at past. we've fourth our As of a got a half looking in over bit lower commodity locked basket we market little had would That's the the have we're little than

we with but our prices think of good just elevated some that. I said positions that we haven't feel about of I XX%. far, advance Like levels as north

Jake Bartlett

Great. Appreciate it.

Operator

Please Bank. question from next Deutsche Mullan with ahead. go today our And comes Brian

Brian Mullan

more where restaurant still was what was then could the or beer in from you you. sales that I mix give update where you're And hoping on Can you you talk just restaurant have place quarter? an X% do Thank of perspective and update and lift getting feel And in schedule? about us sales from wine the on about it rollout the good you us seeing initiative. a perspective, a the sales?

Jen Tate

Sure. Yes. Jen. This is

of expecting beer at We've about our 'XX. we'll and rolled some end XXX are of end time wine updates the of we We great have menu. the be made QX that to stores stores by as out QX and about to XXX we FY get the

Sangria Moon the like we've actually, up. we've seven the Blue have actually last and added states have well. added that done that mix six things So of And brought

happen bringing a been we've higher alcohol. beverage So to of states mix have on that

us. helping that's so And

So states some mix we're early doubled we've some and Texas, pleased like places of our with in states is the in those that the average. of where running results seen Northeast

So we can X% dine-in get optimistic sales. wine to we mix are that and now beer of

Brian Mullan

just Street. follow-up Maple then question a And on Great.

fiscal touch annually. construction that For for there time opening have next talk talking out environment? expectation couple next impact? units development think there? years Maple could you years? inflation your an Just couple Maybe still and we you're about on year over quality Is about next XXXX? a Could the on enough finding -- Street reasonable the you're that about thinking when of sites XX whether And of cost maybe

Sandy Cochran

potential. pleased I'll feel performance. as issues. remain the those brand confident the -- really I I let Brian, least prepared on the with just at me with in and about of said start growth the some remarks, really I'll touch I

doing and I'm I able FY we'll more we'll and it's going about call. still growth We update in in new but both are construction be it's going the -- double-digit to maybe be markets as We're the best quite going had to you fast to hoped. that's be 'XX as infill. securing XX hoping to get next focused on not our costs to whether as see. more And going in sites well, detail

Brian Mullan

you. Thank

Operator

from next comes ahead. Todd Associates. Brooks question C.L. & go our King Please with And today

Todd Brooks

everyone. morning, Good Hey.

than little what mix sense is point best rooms may. in those being your Sandy, What's pre-pandemic. for with of of Just the guess saw the about reopened. get you dining maintenance you questions guess trying One XXs business Just what as about expect XX settle revenue be? are of to streams off-premise low kind a talking were fiscal and streams less what out I as if I a XXXX? a you to of bit few percent just have versus back percent we that of that beyond for the think how building off-premise to in encouraged mix you what AUVs were

Sandy Cochran

of going getting speak -- of I I'm kind your Jen -- let off-prem is to what to assumed at out kind stickiness?

Todd Brooks

Exactly.

Sandy Cochran

All don't you right. address why Jen, that?

Jen Tate

Yes.

system dining our rooms demand than QX last Sandy think I in a dining off-premise said, majority April April sales off-premise even with and in where as we're for we more the in closed. in our still did for offerings with really particular, this pleased where open were strong year the rooms, year of

least that ability of pandemic growth now. a of our reinforce XX%-ish had high that before said know to that single-digits at I saw stickiness. in XX% could we So at belief our retain that we of the sort talked off-premise we're to the percentage were the Sandy optimism has the She least to XX% about sales approximately about that continued last that maintain at XX%. from on in at call we that

comfortable saying if believe I pre-pandemic will the saw current, from today bullish at growth even least that more not we that. we're about We we're of we higher. retain think XX% to

positive to feel So we that. very about continue

back individual delivery we Although, of dine-in. consumers will see we know categories like out into some trade

are growth the We strong catering we and channel. stronger-than-expected stickiness from anticipate seeing

Todd Brooks

I about that for are off-premise you're fully when Okay. assumption XX%, the if of with incremental you roll what's kind building virtual thoughts thought there any that stream And talking on does is be brand, out? the about we're early would that any an within but assumption, know on that or

Sandy Cochran

sides treat working would expanding of but chicken believe one food. stores on combination And appealing as tenders on just because gaining the rolls week, out. that the speed. very and because fully location hand-breaded this if optimizing has Hand and very our made which is couple expectations guest operational deliver from the to that us and that enables been some chicken the last a the simple, the battered, XX in menu menu we it's top-selling test We for combined incremental to scratch offering biscuits and streamlined, do that for biscuits winning brand fact We've months. we're biscuits and with fried chicken learnings and broadly

least of the at successful. this of that being our So we half system, brand because test of think that launch may pending results a in

Todd Brooks

fiscal and in more getting And quick two great. XXXX guidance to thinking you. about at we If One QX. levels Doug then That's look for the ones. back revenue just

As pressure, tougher fiscal and walk can sale the through we from the revenue year puts much inflation full packaging look levels, other the and longer-term to pressure that environment returning takes, the XXXX just and to incremental you on and wage how occupancy is leaseback.

fiscal out Just where operating you get on revenues to fall equivalent there XXXX? like when feel do margins, you

Doug Couvillion

Yes.

take that. a me crack Let at

and going At ultimately that be But us. It's can't time, will long to can or fiscal strong we doing can will to our -- to improve And say we've of how in going is, of facing entire taking going margins confident we're that we're really our you're to how for what continue done the meaningful so, prove look we these really make and and the offset pandemic. return see call over this commodity work we is everything of to the business -- labor we knows -- terms to headwinds that we optimistic exactly improve about restructuring that business would fiscal feel around that I'm steps sorry. commodity what by it's I it's actively business margins, these continue also And labor, business are we believe the about through see XXXX. success that the XXXX guess no I'm end We're on when going to what thinking a we model. post-COVID to when We we're the lot long-term. a like headwinds we're take improvements over affectionately we'll one talking lot in -- and and XXXX. of expect that working inflation, mitigating to good facing, to while industry and we continue to model the the model and we other come

Todd Brooks

operationally that maybe stores the the it's two And and you the units? front that final having when challenges fairly potential where buckets: get then, this those great. really you one to the to Thanks. was those critical hard the about service porch back curtail in to that required? the and of talked for bucket. diminishes in gets those Okay, know concerned there's the out and ports sales labor anything In changes I Sandy, past one customers operational to dining just some third the to Any well. near-term are the labor-intense

Sandy Cochran

about with giving We're constraints they a field manage our leaders lot how the of latitude Yes. with. the they're that business dealing

thing And might say way the so the the to. I front want is, they first we can't support yes, some porch in cases, would really

time variety of they of in respond work that might the got for day reasons. dining shift they categories and they way when have a grill You can't don't enough that their employees staffing come close or the certainly is on either some staffing room, don't the -- might see still for we've if unexpectedly they servers, who the are a have or period to a

think I've with demand what and this has are pleased I doing of the been delivering how though ramped is good up. it, So, brand very job chaotic environment, our leading in this really as a leaders field through

Todd Brooks

Thank great. Very you all. Okay, helpful.

Operator

go next from [Operator Jon Please Instructions] Wells question comes Fargo. Tower, today Our ahead.

Jon Tower

for thanks Great, taking the question.

few have Just I if a may.

it XXXX First you've a spend curious starting now. to program got issues? the the labor spend, a out back because either full not off even I at at capacity level like of constraints a relative at am spending sounds strength you you're the with know to are if of right full maybe basis obviously say, restaurants dollar new or marketing on there yet, or levels,

Sandy Cochran

we were. We're not the that at level

capacity back the saw billboards. that know don't much to I example, the until that didn't didn't for we as it's going invest, in be as refreshing -- So I -- to want on people were we highways,

and for the the the shifting be to because more we a to benefit targeted. by digital marketing allow the flexible flexible and So or the impact from The year we which more till team of think investment end, programs, done have us I some postponed job, digital think of didn't marketing has we part would more great it previously.

and this as I been year, through so, as has think opportunistic the gotten it's environment somewhat evolving changed. we've And

our speak I next the detail investment see a and of spend. we more think distribution when much marketing year in normalized you'll more

Jon Tower

you you found, do lower a pre-crisis spend? do or like of that, given up And dollar -- digital expect levels to spend, following there, on with Great. effective do you to a you way return feel the the more channel

Sandy Cochran

fully I I spend money say her where she is answer this, that hasn't where and buck. help our she teams that of want getting to of results think, spend goes. do digital lot suspect possible I that channel don't support they how all just but concluded our Jen they and can our they'll on teams and that it actually most more? -- -- kind us bang of we Jen, dollars the people, it a and I'll what's understand add the new shifting get work but more let -- more to would the to you any app digital, a agency and of allocated. marketing do lot done for and will Jen they have have It's

Jen Tate

into that in They our put cool to their we're put on I spend digital site cart. restaurant improvements that and a now even can their our more so together more that, can to have our exact right? their on They comment rolled retail visits. cater we're brings the catering next can of browsing cart. and the especially dollar app. right, in same we They their you're won't investment that significant both our put going say, items now are and from that digital I can shop Yes. will shop, people eat, the transitioning out making things space, But So we store order in the have our from amount that that and fully we year. cart,

order have into that We dollars seen those move conversion a digital in will there. and average conversion uptick drive channels we And nice value. to continue

in continue to we'll that. So, invest

Jon Tower

Okay. sales. very Obviously, to pivoting this margins the strong. retail Thank just you. were quarter And gross the then

some of And business. on the it sales much this. think but have retail if like not driver I full-price was a how to this mistaken you just sounds I'm for of price curious, attribute the sales, strongest you mix I'm would of record, full

for tailwinds of say to short-term selection there or how So, much the to stimulus out, tied better this consumer. inventory way longer-term is initiatives versus management any around product like parse was

it how Just bit over be you chain mentioned gauge, future? be in longer And trying term obviously at when any earlier the headwind, Doug the numbers, but these stick way supply much of a a would understand had think about to I of near-term kind stuff the great? might to can looking

Sandy Cochran

our it. and been able great the with helped value, I helped sales. that -- had fun wants do like navigating think have resonated. retail to Certainly, and has I But first they've I convenience think, at team also eating say of of we have done has just And them there's to and America all all, of -- to a unique, just assortment the job it's the really its the of our of and some shopping through but of fun So, product got helped location I this in kind phenomenal play. issues lot that there our nostalgia same a

helped In our addition, that then those sales price margins. full

that think has through team the I learnings had this.

in men's been to able and add I to One that. assortment, then remarks we've in on prepared mentioned my of them improvements there see like

the with to has I seen how guest this allowed the merchandising also the feed visual how less think, potentially -- better. they've product product

So believe to we sales. inventory how -- will need benefits long-term about forward, be we we much some going generate the get

they So, forward. and done savings. we'll opportunity some excellent certainly, I -- there's of of it and from job has capturing learnings But and been translating in the of the be going the stimulus team retail an impact learning some think that those

Jon Tower

your you Thank that off-premise was an earlier that And around XX% from off-premise kind third-party of I you. think just about Got coming or think delivery I to And it. Doug conversation then platform. up, mix. mentioned the following had earlier of

of any the XX% these top this is these pricing many all pricing if is versus then any just tell customers might a many in-store of to how of I And an offered way shift differential So in-store way option menu more put, that back think a out, transaction? before, know in-store guess, delivery? is And excluding sticking to Simplistically on them if you've how in-store versus to or there's about are but third-party customers? delivery figure when that occasion determine to available X% transaction trying that. there on I'm the is really, customers between or existing there I'm to I us wondering a the what transaction to say don't and delivery fees? one

Sandy Cochran

except not to say say, we I'm the premium Jen we the why I that think, Doug, offset don't -- to largely beginning speak going going to fees, part don't to that stickiness. beginning maybe ask Jen to channels of different the speak the to you then And pricing actually and question? but you're to provide specific we're the going

Jen Tate

Yes.

visit? more the times to likely guest guest Cracker delivery Barrel third-party pickup Your What delivery is will our dine-in we guests. about that have base. think question to with the be at much an how They to Whereas the is in the core back to us. in-store curbside dined those or pickup are we have trade likely be least seen consumers to third-party of tends incremental and

to as discovered have incremental been to Barrel An or tend the have during third-party opened. have have guests to brands. Cracker impressive stickiness. really Third-party they impressed of new Cracker be those Barrel we have so the And We have sales portion They seen rooms additive may remained. been with dining our us. pandemic, and

the predict can as pandemic truly us is tends happen to incremental be So more curbside in guests no for mirror, third-party one guests. than will what a from rearview the our now but year the

Doug Couvillion

had pricing delivery taken years implications margins. a we of And a We just spent as it. on we have ago, we it on business lot delivery. entered haven't time third-party thinking And few third-party our the quantified additional through the

try a in-store and would were you I DoorDash bit. your If give menu. our a looks help have go to out a you'll local see to like area and in you structure relative think probably delivery, to our what That us

Jon Tower

for time I'll Unfortunately, and Yes. But time. have road but taking I'm can thank the I don't next the I see what one on do. try me, I it. you around appreciate

Doug Couvillion

Certainly.

Operator

question-and-answer turn remarks. to gentlemen, back concludes I'd and for our to Ladies final this session. team management like conference over the the the

Sandy Cochran

with right. thank you your All joining interest, us Well, look today. for support forward and you appreciate speaking soon. We all again to

Operator

and gentlemen, concludes today's call. Ladies conference this

You may your disconnect day. lines have now and wonderful a

Cracker Barrel Old Country Store (CBRL) 25 May 212021 Q3 Earnings call transcript