CBRL - Earnings call transcript Q3 2022 | Cracker Barrel Old Country Store, Inc.

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Operator

Good morning, and welcome to the Cracker Barrel Fiscal 2022 Third Quarter Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Jessica Hazel, Investor Relations. Please go ahead.

Jessica Hazel

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

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

On review me this financials and Cracker will and and Cochran; and CEO, and are the CMO, Tate. call and outlook. Senior will quarter Sandy initiative Senior President Pommells; Craig business Jennifer CFO, Craig Jen with President Barrel's the Sandy and Vice third provide President Vice and updates morning

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

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

Sandy Cochran

to morning, growth Thank This to we the you, XX.X% fiscal the third XXXX. good compared revenue of of Jessica, and morning, prior compared everyone. total quarter and X.X% announced year

bottom pricing teams macroeconomic slowed our and particular with quarter. for over quarter; environment quarter lower we challenging to our I'm our economic store how and expectations dining partially expectations, We recovery with run some as the during by year margins, April sales March now our inflation line. in the check growth to the own while well regard quarter demographics sales in experience strong inflation the that performance patterns, guest base; travel than wage side, line historically our address travel Craig our challenge some been we're Although came our XX-year-old our about to top to current offset us we've protect our initiatives sales us as above visits. to other we're over high guests even our robust spring outpaced environment commodity meet positive return work help traditional and below levels, commodity expectations, dine-in go Craig will third to XX.X% of in finally, slower side. during retail is were trends headwinds off-premise quarter will manage retail about frequency in our disrupted taken that to have the break pleased XXXX. the sales detail continued the into comparable higher the deleveraging and and the that prices but below impacted first, inflation the Once our in-person cost, cost continued the to gas finished, environment second, pressures did progressed, as pre-COVID resulting and And believe and continue guests X.X% the quarter: going cost to we thinking to continued With business caused forward. our Craig as well line as The to and high I'll seeing drive grew we of by compared Three February encouraging prior expectations. we Craig? top pursuing our position greater things although in our through.

Craig Pommells

Sandy, and you, everyone. morning, Thank good

and third both we including the revenue retail the million. and quarter. $XXX total store $XXX.X million retail XX.X% was prior the to For year. restaurant by revenue to and driven by quarter, sales expectations. XX% reported below traffic to of store the year, year restaurant revenue restaurant dine-in million grew compared sales versus $XXX.X X.X% sales grew total XX.X% Comparable Comparable primarily growth Despite pricing. Restaurant performance by prior increased growth, to X.X% prior over increased this

retention our retail to work convenience. increased growth evolve to offer strong continued the teams our guests with pleased done and and flexibility and our off-premise sales levels, are have businesses these We solid

for guests as store sales business third-party retail to-go growth delivery dine-in. catering comparable Comparable compared X.X% declines quarter with sales Off-premise XX% year-over-year our offsets to remained sales restaurant quarter strong with were significantly increased our elevated this harder to the coming sales year-over-year to in growth of we and as store to versus be and convenience is and more performance. décor, category returned food third the prior from the traffic the individual merchandise off-premise the Toys, sales one trends. of returns. of which hit third from now dine-in and Third in categories quarter its continued has sales there pre-COVID offerings the drivers during primary pandemic, retail of returned was year. believe further level, pre-COVID Apparel,

combined Retail with driven Moving quarter. of of prior goods increase quarter. running ahead year sold XX XX.X% up inflation, sales Restaurant in costs was elevated to well freight all increase the in retail experienced XXX revenue quarter restaurant Total This This was basis-point of in XX.X% our of of We fruits sales commodity was goods across the XX.X% as year vegetables. basis-point by of costs. freight versus sold pricing. cost was goods categories versus protein higher total the inflation and primarily higher-than-anticipated XX.X% as cost versus the by driven was XX% primarily cost expenses. quarter. prior of in XX.X% year prior XX.X% sold

and staffing labor of the versus at basis-point XX.X% increase managerial quarter were and driven related wage XX.X% increased XX quarter. and levels. expenses This Third by primarily in revenue prior inflation hourly both year was

adjusted quarter. prior operating expenses XX.X% Finally, of other the year were in revenue, as the same

compared store $X.X third as income the GAAP and asset results amortization in result a rate of quarter. revenue. is transactions, as $XX.X X% the interest of completed the we the quarter Net million expenses year general million operating interest income versus This for debt XXXX. weighted well the prior $X.X million. $X.X due million debt in in expense the were lower levels leaseback revenue operating prior of beyond quarter margins, on sale million our the gains Adjusted slightly the culminated year administrative fiscal down Moving was lower adjusted $XX.X the recognized from of quarter for or to noncash in quarter. quarter to of and for These offering average was to the X.X% decrease fourth the level convertible of X.X% in the

Our effective the lower-than-expected tax quarter third for increased rate was by credits on was X.X%. This rate tax driven tax earnings.

results. share earnings $X.XX. EBITDA and In XX.X% share was the third our were prior million, decrease quarter year diluted compared Third per were earnings per GAAP $XX.X quarter diluted third to a $X.XX, adjusted quarter, EBITDA

remain to balanced capital to sheet. a allocation balance and Turning We capital allocation. to our approach committed

per remains due the well a The the a was first has multiple approximately capital and spending, from which third quarter while invested step-up the we the And Maple to that, half in unit return which and of $XX on capital appropriate spending million was maintenance we Our normal as Barrel beyond the in flexibility our capital conservative $XX priority Street. balance year. to increased quarter, maintaining plan quarters as million expenditures, higher of below in shareholders significant sheet. In investing to growth growth. increase been from first new Cracker

bringing Additionally, to year-to-date our through prudently and of dividend we more our Board's our new commitment shareholders repurchases, than to to reflects authorization repurchase the in capital $X.XX investing million returned total third in $XX.X and business. quarterly million to $XXX returning share Today's dividends share million. a declaration $XXX while quarter shareholders combination

debt total year in with end. the Lastly, quarter we $XXX million the ended million quarter to at prior $XXX compared

some our over third we Jen are we us in near-term our managing increasing approach Clearly, pressures financial offset the bottom of are and our While the of maintain are expectations, our going pressures and speak and fourth believe we to we our we anticipate authorization, quarter as year. near-term many cost to initiatives repurchase that on faced success. to to positioning the of calendar top longer-term conservative will our look we for we Sandy the remainder plan both, persist. But balance quarter the lines share to sheet. to

price a guests is staged some increases take thoughtful seen we've While plan managing and manner. our check, to in

late in June, followed of these another August. through will year-over-year approximately end year. in the increase an Together, pricing X% by take will support calendar combined total We early an the

consumer will be flexibility and will believe to we the We additional take monitor the do maintain and if prudent pricing, environment it continue to inflationary to so.

at spike prices a trends quarter, in sales mentioned, a recovery. consumer in in we the traffic our outset and increased Sandy resulted uncertainty improving and the gas As decline inflation saw of before

current X% of trends year. plans, coupled this, pricing continue through of fourth quarter expect the our of our result traffic fourth We revenue total will above the with quarter fiscal to the XXXX. approximately end anticipate We in

quarter fourth commodity inflation inflation of We and XX% XX%. to wage to expect of X% XX%,

more operating staffing and margin level in we technology versus notably, year fourth and expect Taking fourth other quarter, the is total of in supplies, we manager the for to X.X% higher and the this be additional areas Furthermore, revenue. inflation we hourly it P&L, investments to range represents training account, prior margin quarter into anticipated a inflation Street expect and Maple than of off-premise this of in of is to all utilities moderate quarter, X% compared headwind. the and and most in expenses infrastructure. third While of previously higher

have continued tests administration, our we across enhancements improved Lastly, equipment already that, digital and offset believe saving continue identifying results with hand profitability. infrastructure as business promising. Savings cost management a margin we to long-term we as it of pursuing implementing cost-effective fiscal continue our high wage more early been on part I'll our and are are model, long-term food Sandy. supplies options modest sustainable to on beverage, from from improve environment, providing focused this beginning and labor and and in system in sustainable back labor commodities we And to management system are both, our our very inflation coupled navigate later the categories. new drive We to work will opportunities productivity system food and short-term and cost XXXX. With to the inflation

Sandy Cochran

ask the and while to we have I'll numerous initiatives Jen and some more of to challenges business retail and the another that longer of our are attract pursuing year, driving audience the initiatives our guests position fiscal I about thoughtful doing of the visitations our strategies And Maple continue for to saving that a Tate, to many increased position details and brand quarter, near check, in likely our from Obviously, term. of are actively well additional Despite Officer, performance check brand revenue through addition expansion believe drive of Craig. perspective, the broader referenced. what or provide and a run then and positioning actions there of generally. us and to to how degree Marketing pricing, for drive Craig the we're Street. we're one model Chief balance we're both which Thanks, third continuing cost

and Mother's we're place managers where recent way level us, family. to that preserve execution. our seeing focused who The pricing an taking days is operations support be ample to guest highest excellence which we're guest Day, experience excellent on notably to resources an our experience our momentum, the first enhanced make service. ensure environment of that that Building is care of for We pay give the will our biggest additional and need Consequently, believe focus has volume and is employees we reputation value. focus store through for we're every for initiative scores that our strong we're to and sure us our of they including visits continue best year. in us can have and proud operational high This on to value and development should our hourly dividends one like is marks for and the this investing guests, traditionally on hospitality

recently excellence, to on program all operational we out and the and managers around development focused example, rolled For district service in-person an of hospitality our and country. training

Of great adequately we're that begin operations course, with ensuring staffed.

we essentially of back on to talent we we sufficiently retain historic make remain with progress recovery Our guest solid remain stores country, believe staffed employees should challenges A making handle our this around sure continued in and focused the continue our and and acquisition to and staffing norms, attract particularly to we traffic. meaningful regard. now in number are teams is servers,

in noted retail well, done that I a supply to keeping remain some chain our stores opening remains extremely strength protect significant on strong with our any and managed and To our and our floors. my filled resonates will They've nostalgic performance, teams time focused we're for important chain retail and our ordering incredible continue management. guests. holiday and an retail up retail to lines As our job comments, pushed avoid season of everyday merchandise we our with us, unique disruptions supply have proactively able our

and just that and that one. infrastructure brand, this brand We've key few focused has We programs casual we're In pleased great pressures. the and seeing ensuring added deliver this attractive on to the Maguire place growing excited regard, I'm its ago. perform Maple to been we've we remain progress to opened location Street XXth as model, training Maple inflationary Finally, President including operational the right in on honing real about weeks and Street, thesis our are and space estate dealing which with continued above focused is hiring its Maple the made got grow have despite expectations, fast a own on developing very that breakfast announce of our an lunch it leadership. Street investment John and

as As of he was leader of Operating the Executive brands know, many Bread has years Panera President in John and Chief over industry, of growing fast Vice of you likely Officer in most experience key XX in restaurant one Panera successful where casual the including to a the restaurant space.

we're drive check As to all our of about Jen long of with us, that audience for brand are guests and I more mentioned, you positioning priorities make I've driving headed for and the in and ourselves frequency details the initiatives I'm regard. you pleased and appealing broader strategic increased asked more provide to we're this even through some a where pursuing. walk Jen? term to Tate

Jennifer Tate

Thanks, Sandy.

we about core about know our has groups appeal. brand us guests increase that from recently key we whom check, us with given our how who concluded want excited represents. what they a can level a groups study are study, we We greater visitation. to can each the are, Through or attract and insight We very we from have the these drive this and more big segmentation to prize group six-month newly about a potential of grow broaden

pursuing marks over been will we are Strategically to things and atmosphere. actively XX them or that did those addressing. millennials between our loyalty patterns, said, guest attract relate for brand. very value we're our one do new XX strong we who to XX% users us a opportunities the visits better, ages of When wish of have of also multigenerational addressing we're guests gives many less and of which food slower eventually core delicious our to use group normal we many dine-in return we grow the us to digital, Approximately whom to of of perception speaking, a who fortunate check another including ask XX, constitute strengths program. where high number these lean technology, generally a initiatives and they That and base they have we into technology Although frequently This who about food, are of so. of in have and while in way also value guest we the base. believe our are

as both Some of the are others well initiatives with guests we as nature, term. groups the these shorter attract. are while other doing should term core in resonate And we’re that longer trying to we're things believe our

Let's we're our food. to and what enhance value with begin strengths of doing

price a guests on of they our value, is are in feel the experience. are that their light Regarding we like entire sure focused deal making great paying

As but thoughtfully over continue six to we the noted, approach will Craig next pricing months. aggressively

can guest Given the is the perception a of maintain thus prong acceptance grow taken pricing Craig multipronged we to the check believe guest only one pricing value. we mentioned Pricing that through end calendar of still guest still are we've far, we of implementing strategy and take perception of while the value. year, high of enhancing

prongs will related be premium other size where shareable menu beverages and more we nonalcoholic starters, introducing alcoholic and are specialty The and add-ons.

At guests. an meet indulgence, guests price more needs premium looking many treat experience continue to select for offer opportunity the three more dishes the our who they to at all special and compelling if we across points to have into offer conscious for we a We will the them are want same to so price of affordable time, choose. dayparts

craveable menu newer enhanced our first new takes offer to it of mentioned for launch be our make feature of better consolidation phase our offers servers, evolution. enhance make daypart check, it marketing to menu some those our menu a particularly our and around and increase for of should of guest breakfast build-your-own while to limited easier breakfast Centered we help It the also reducing navigate option, allow and that us time attractiveness profitability to menu room individualize addition will to items deliver employees, the a the our into by and us breakfast experience. the in to In and I to new menu items will breakfast items meals. menu their to leaning build guests check this for launching premium learn time and

which is our on leaning towards new dine-in progress support. Finally, we'll which is appeal we program, growth target marketing we program guest in telling other to appealing deliver into to are through quarter drink and to and wine the drive fourth X% making category in and segments. key to in-store and our are developing we to the beyond be great items We're enhanced a our with and focus and continuing beer mix marketing areas further Those awareness our guests selling, strengths. Longer further they working this seasonal the broadly our additional and us they're enhance term, are our testing are concepts where offerings, want.

that to or want guests talk about us they or attract do who things we want guests offer we are the whether let's to increase better, want to Now, to from visitation. whom

ordering April, Mobile to our to Pay a app also enhance of and the As and And digital, process, creative travel remaining strong unusually convenience and Pay. around adding out brand appealing We're and our more over provide technology rewards and engagement, an offerings, be to particularly our the us revolve to believe Pay. our this and friction digital offer even to and and with In we impactful be rolled store of Apple Google offer regard allow With restaurant which for could are retail I this us guest on above they both devices. looking revamping will reduce loyalty discounting. for we loyalty, mobile said, new guest personalized remove experience we streamline later many quarter, and will friction continuing program. these where

new optimistic you have we more investment And this and here, to we're it attract brands to the including and we grow other most initiative check our notably initiatives and potential about Then, prudently share drive virtual about off-premise to businesses, approaching growth. and continue frequency future, with Given our our guests of thoughtfully. in we'll to but the course, have its our catering. are

BXB are to last our catering they growing which brands virtual to the growing business than same and are trend in continue sales, line. Year-to-date, over continue to our more generate XX% sales and believe and impressively the both, we period incremental catering BXC projected on are year, is this Our spaces. up

well to ability even we'll core very key messages we're guests Summing occasions both, the we back together more When that to our allow positioned be offer communicate their to it frequency attract As Sandy. do and it of all up, have gathering. and groups employees that that, marketing doing a core and more the workers return digital To well, Barrel. bullish brand combined and gather that through generations it part stretches think individuals personalized making guests enhancements what better social ensure guest that more new us personal program, and as we and office and all increase to to across the celebrations we we turn that I'll to especially taking our and are With resonate, to we use other special our over remote approaches that be from more want. and have to targeted our Cracker to do and continue evolve with we and by loyalty channels. companies

Sandy Cochran

that including strengthen our the plans Thanks, near- headwinds all you, I investing shareholders. strategic confident aid that sales navigate that enhancing our Jen. and a in guest coupled growth for model the we long-term Barrel and destination uniquely and of differentiated make most we're reasons us to for business us culture make our things In appeal the improve base, for hospitality Jen returns technology come. unique and environment, one employees initiatives with By you. our years will the choice a to the with our industry all of shared cost will brand discussed and guests for pursuing recovery, our and of pressures position the I'm Cracker with this, Craig and to believe beloved brands our our deliver challenging near to reviewed term, our the long-term that Despite we and expect in across

our of every serving the who dedicate extraordinary Cracker employees none a pleasing to their thank these and course, themselves field leadership, and operator from more Street now would for be operational home efforts. day are store the guests. this And to and great while efforts I both Challenging Of right job to bringing our perspective call of employees XX,XXX without all Barrel consumer now, navigating challenges office possible turn our Maple for doing the of the life our people. and than over I'll questions. mission environment them

Operator

Instructions] ahead. go first will Please Jeff Gordon question with Our from come Farmer [Operator Haskett.

Jeff Farmer

in look versus like I you local travel, how essentially what get high-level stand I the into does just mean looking And follow-up that summer? local sort mix much curious your that. for driving of does the And First travel? terms so breakdown right the on head customer model. is And versus mix larger travel then, of one I'm a as by update then, question, that season, base in business have after now what the mix additional where that summer you

Sandy Cochran

haven't easy the answer Okay. pandemic. done going Good to morning, Jeff. because to It's the beginning that question of since we an research be not

they don't at point. a coming were the guest their we during was a and quarter talked due was I have or to as that spring believe but we spring period, prepared disrupted travel guests that the than the then important is it travel to we historically, remarks. break was believe certainly back, we travel about back occasion in and in the surveyed visits issues visit. and we normal in bigger local And fact, gone So, percentage the mean break With pandemic, we particularly this self-identify obviously, us travel pattern fourth a to -- think almost but we the second

Jeff Farmer

then quick Okay. one And just follow-up.

operating with the right but below low of Cracker pre-COVID, income forward? the sort asking longer as commodity price margin business how Barrel high details relates for rate we X%, X% the sort you fallen margin 'XX, think picture, think it's of business, into can I as close to pretty 'XX And sort How inflation. to bigger the about operating backdrop. income to you're commodity and of some But, do margin, as future performance margin. inflation levels prior rather? moving the it moved believe or term Obviously, do X% you here, XXXX, then COVID So wage both that of the at and you get that or of returning not the of you think about level, in operating

Craig Pommells

pricing. Thanks, Jeff. Good now. here's of elevated morning. guess, This is I talked say can we what think an level we about Craig. I -- We're

opportunities beyond talked of then, You and the mix the kind that. going about additional menu X% -- add-on about through of remainder menu calendar year. And Jen, you talked

a done the than we've traditionally. that meaningfully level we've And -- in large part model is done than business closer. get that's higher so And higher to

We are will help. meaningfully we right? that started, where So below

of will in bit supply of a the waste. of to on reduce around business are food of also the and productivity lot that, side meaningful. improve PCM addition then, a things work designed and fair be labor In there the to business changes, terms menu longer that is over side changes initiatives chain PCM of the work, And period specification and we've so candidly, like and around a talked about product our -- that

we inflation a assuming is it's there what that's that progress think do, believe bit will be fair making to do going does We we there. been happening but So, tricky.

progress. we'll levels. back if So, think do we to we do I pre-COVID don't be play have a But, our as firm to then get out, when assumptions making answer meaningful

Operator

Our Capital. go ahead. Please comes next Loop with from question Alton Stump

Alton Stump

inflation, not you do I your inflation to now, balance, too. as take pretty consumers. it’s how But much need as as is you that seeing obviously, Cracker own far across try Obviously, ask restaurant a can just as to -- facing sort to of they're everybody just industry question the versus wanted the which also offset Barrel. much to pricing

you higher to so, between pitching how having known pricing, have And always value, obviously point, sort for you X%? which versus been like to your take balance of guys of Craig,

Sandy Cochran

time it driving. great I'll how and lot a of she something a and maybe check It's about are about about. our touch spending we talking thinking question, that -- are is strategy pricing on we let how Jen

Jennifer Tate

right what really think than is I see out now. type one of we there are more consumer there

right? For group spend. is very and they committed everyday a visits managing We've continuing to much that in committed to in terms that our sure, are And dinner, points to of much for of back, is strong and consumer affordable lunch at protecting market that that both for got are great terms price we and pulling folks. breakfast, consumers, protecting there those how of value, and value we

the help is so hand, want more. grow we when And can some are to add-on the and entrees And or group more want bit. do they a I think and who that bit business splurge items higher-priced, will treat some may help indulge back cutting and or other to why luxury And vacations. a there to they adding we consumers premium come more that On they indulgence. are actually model. to be our of that Barrel, check little little that Cracker see on they items trips They a

that various sure the making business. the just in for pricing are we have right So, we our strategy segments

Alton Stump

back question, a I'll And queue. guess, in hop I for just one Jen, the follow-up. quick

will far as of weighting X%, should the in similar pretty I be pricing that -- business be kind as on restaurant versus any retail towards our the or X% of model, both there bigger segments? Just should front,

Sandy Cochran

does or sure I same? the the the saying, not price the in understand retail retail, Are is include increase question. I'm you X%

Alton Stump

my question. That Yes, was yes.

Sorry.

Sandy Cochran

two differently, those I -- would retail a prices I basis, has mix and whatever about is. at say, the increasing decisions to a don't no, the are do But We with look not level. on that mix constant at lot retail

Operator

question Todd Company. Benchmark comes with ahead. from go next The Our Brooks Please

Todd Brooks

you did to price you can what some maybe tough I'm that that revenue talked the wondering, in around assumptions forecasting, general? year-over-year, difficult growth just Obviously, environment, up you X% assumptions environment lay talking your about pressures? behind And a point come headwinds with to gas operating guidance on the just estimate maybe of in really for a customer, how the what's XX-plus maybe the -- call. on out and thinking

Craig Pommells

good you, Todd. Very question. Craig. is Thank This

just a And of gas have some talked frame gas Well, contributors it. bit started in given usage case prices So, talked tell other to as when gas Sandy it initially performance consumer deceleration well those as impacts impacts us time impact that and also have in about more we're directly because that impacted overall -- prices, and of how we've and thinking then, company, directly. indirectly as cohort. a then -- us about you spike trends. our overall prices a really that inflation, it February about confidence environment the when of March kind X%, little it late things deceleration. XX-plus kind we that saw And lot we'll we also

little and bit So, this in a again, And X% our I starting time. assumes travel around some is builds also this TBD. a would also What effectively It is it in that assumes reasonable of season. what summer as a that trends. of characterize recent -- more

is behind is travel anything incorporates perspective there the from particular, of what lot near seeing picture, a item summer season. and could that to what gas in prices, with term, the a the but XX you'd Sandy, in lot over X%, happens in the I macro add cohort that? it a we're big So, like say would be particular, open that to -- meaningful a

Sandy Cochran

No.

as but got is about the although -- today. just we we'll back. I come of improvement earlier to I ready not question business, And is the are are our pre-COVID, guests important they travel from component think a an the quarter. for expecting back, optimistic to it some as we're And teams think building we're that was our fourth think as it will. some think what I of But strong I percentage and we

Todd Brooks

more had moving we cohort? the there, both. or of intimately that closing better you, all you was we're qualitative if is, on Omicron with and gap Thanks. it's that as away performance work at you've between, the Thank to millennial cohort gap segmenting done months. my if the customer further year? start And helpful. past follow-up us can Jen, a and That's say then, a And give segments at any and impact from then there the commentary the six identify knowing maybe you speak XX-plus talked Can the let's you to your over

Jennifer Tate

Yes.

that interesting those than might what segments more of the traditionalist, the the millennials are us more the are of the say, most give they are millennial to find think they that the high heavily in learnings that one that imagine. was versus XX-plus, things I you was marks about the terms in common segmentation have you -- at, if drivers, look

and two example, and our love For they shared of for atmosphere cohorts. food across quality food welcoming of those a the have the just the experience and genuine is the

I that thing the hear things to have millennials talking that think and app is is expectations different why very program. about high you technology digital. as me the really And is big new regards like the that loyalty and

have been still particularly dining seen the same that the data that's In our then out. room of a pessimistic public they concerns by reluctant that and the concerns, driven of our couple generations. suggests places more they're rate guests to has all as also to are dining surge, With things. return COVID. terms still we at in reluctant they And this of younger and performance, economic recent the socialize have about than data recent XX-plus suggests our guest One, to younger

about worried they're so, less. and future therefore, And spending financial their

mirror hits XX-plus. would and pressures from pullback definitely we bigger have as say inflationary wane. hope seeing from we're I the So, rearview a they perspective traffic hopefully, as these a every return COVID will those that

Operator

comes question go next Please from with Jake Our ahead. Bartlett Truist.

Unidentified Analyst

taking Thanks the wanted ask one, is This for Jack G&A. questions. I on My about actually just first Jake. to for

in Street going some G&A infrastructure. then, 'XX? do in and into Maple what And guess, mentioned You forward in step-up expect investments quarter? the imply for I you year in incremental technology G&A fourth fiscal the Does that a

Craig Pommells

we on too detail to much into say, don't get think in -- look, I want would I G&A.

I think, longer-term bit there's think we we here. that clearly the some would short-term G&A things don't as we today. about view, kind a think of get I as But into normalize

Unidentified Analyst

the will And what that implementing food on be system Would benefit be have fourth April. as guess, in think able cost fair. my that That's guess, system? quarter? year the will you I you management is I And second I in maybe then, question finished with to Okay. you've the more benefit next that quantify of the then, learnings increase into

Craig Pommells

Craig Jack. Yes, This is again.

a the the what our tested into feel system -- product our does improvement. It modest confident will And say, is we're built And do. as tested So is actual improvement we've -- tool. we would COGS -- to in different number of into things pretty sharing. cost a food we it that but we've that's that us, and management it's built modest, guidance

Operator

Our will Partners. with next from Brett Levy come go MKM question Please ahead.

Brett Levy

two I ones. separate guess, just

last where little in seeing see where a risk First about quantification of your Jack's as about the any What you improvement? where necessary just is great there. of initiatives, or you commodity give landscape color thinking bit building your off terms upside the feel second there's you now? you're And you of level the do push question. When you're terms Thanks. in just what locked, your you little are And of think you a for could more how can best is and of absolutely think delay you basket? see things that question then, what Can either you do bit? back right

Sandy Cochran

I'll add. see to color then what maybe Jen start, Craig or and I'll wants Well,

traction line. or initiatives, menu out. we either rolling attractive things think where are to ones component our initiatives job the our driving attractive our think more I guest be results did they say both will would or our Jen Whether pretty guest in pay think appeal productivity technology guests, terms experience, drive our that core it to I to But that to cashiers. relate that's very assets a or frequency, good believe top space, of mobile more a trying more most we our the will for of we're of like about in urgent guest that we and

that So, a of driving all highest priority. top cohorts But our recovery those initiatives guest line it's win. are double is probably the of

the -- technology, the the are second get enhanced in that result all the loyalty of improve things, back stores. are say experience, program, of I'd and the all of with -- inflation menu level this and pre-COVID those the now, are to we're trying programs, and to operational in and staffing, those of well, initiatives our but which cost in this sort pressures always, we profitability So, hospitality, of environment In light in profitability particularly our as guest where group certainly light productivity our on embedded P&L. training,

us the Then, system, retail and an third-party, growth to guest, the comes, still guests, manage all But, will the do better that how the the labor off-premise help on teams which add is in it a So, an to which that how different our system, understand off-premise the give against will a we one, how power produce channels put to system the are production this to guest be just and and needs field help we says we're of off-premise have. our with of delivery, now. Craig very order at guest. because labor guest, complicated to the which to on a efficiently their tool able teams matching inventories in more just the our drives Since food and it, production hold the functionality, early it more optimistic understanding district, on, labor touched catering to better go COVID match a better we'll our I a us waste. times labor he to system of as get a modest effectively. business that to more efficiently, will It improvement rolled but understanding really as our think menu job much food we helps provide about a managers significant challenged which dine-in the we're

in more will better us system, just efficient doing to because be we'll So, optimistic the think, better will will I match labor better this which that. sales a us drive allow allow have match I save and am because new to labor, we

I the of it everywhere that would the sort Beyond say falls on and cost savings, else P&L.

-- to of the some near a I'm -- in was hearing supplies of don't two area, else years in we'll difficult for to we lot you able be have, this, what to inflation Craig, might we the want Jen? believe I now that manage but there have more there because optimistic the add know off-premise term. are am Our last that implement the shortage ideas I we or we're been to

Craig Pommells

this Brett, is Hi Craig.

of other The the there. question part

well, focused in about lot on of up delay right? And technology it sums for top those of we the are So, more just and should Sandy, initiatives, terms line. a really less, deliver basically good them the think really that think I driving as it's what we investments.

to of commodities, In locked, was visibility pricing. effectively part or point, we At second think right? we're I your either We're the have this terms the of question. locked

rate this inflation have calendar essentially of year, So, the come think from we hit fiscal, year, this increase last a numbers point more inflation I the there of down. is will there commodity is -- for higher But, for remain peak some whole and at significantly next lot will then, as we that on the comp about remain start to don't in fiscal. will this elevated. And thinking the inflation

We're of moderate years, that's So, commodities of retrench begins all that. down that's to been right projecting increase anticipating back or half one we work where a down, the but couple to working its anything years we're that. year, and remains experienced calendar and that of pin not the now. like think in last some go two the But rate beyond a of second assumption I the way as the high we've tough sharp over

Operator

Sara Bank go America. of with Please will question from Our come ahead. next Senatore

Sara Senatore

few follow-ups, please. a have I

you're have fully trade down, said but Do The flow-through is you presumably, I the what some net a of increase not is sense to of on which first think -- prices, you seeing pricing. kind the it's on just offsetting on of then, different I any price? understand check about saying what the more one. to try that, just in bases. And bit kind on wanted about little a customer forecasting, that's traffic? I So, about think and also So, insight to as say, you're

thought comps quarter. similar customer most that base of for would retail been XXXX than retail there Specifically, kind check restaurants, pressure of stronger kind accelerated sort on of in more because the of recent has feelings restaurant for budgets, that inflation a and you'd I maybe example, versus thing. of of have have sort pinching and

versus So, do and I better kind just retail how reconcile restaurants? of growth demand a

Sandy Cochran

there's in So, lot there. a

me try And let -- Craig take try I'll at. Let on flow retail. I'll the pricing through, a the stab then

have think an been merchants done a for our I unique, fun, in strength interesting that us. to a that think merchandise, degree, And our I great add-on little have price you business, sort was really great retail of Our some nostalgic, call the really maybe of a an job and having buy. it bit retail has -- impulse we of,

do think be I sell dessert that. our affordable some where whereas we're or would with is seeing, guests It's a kids they to our categories. and fun this in a are affordable of an there there's And they they're there. something just were things when indulgence. one store in way. And was toys And example, for way, a some retail maybe think for some families, of to So, I concepts, using and their really able able their strongest

merchants our our the So, shop strength have of seeing the think teams. terms why just we affordable guests is I and an it's are and think where retail of bit resonating little And job luxury. the way you're in a position with I then, retail the done

trade put down So, down? Do that. -- you from to the want trade

Craig Pommells

Absolutely. it's Hi Craig. Sara,

We've and the And flow-through we're and continuing test texture a as and learn use to relates this. control flow-through, seeing in really kind give some it environment. I'll on to price So, good pricing. been that test of on approach

to pricing, there in things up go and tips, so impacts And of credit from indirect new high So you as -- taxes up pretty typically are are tips expecting to basis -- like go card few we for to flow-through. result. so a Normally example, speak, fees. FICA, points, some kind a lose

what approach. that's been expect would a I test So, consistent our learn seeing pretty and with high flow-through, pretty using and we've

Operator

ahead. will Mullan Bank. Deutsche question next Brian Please go with Our come from

Brian Mullan

return. a capital Just on question

think the analyzing? capital capital when going As you parameters are underwriting? about repurchases about and share in Maybe and a framework with returns and of about authorization. use take new determine doing what thinking might you us from you margins forward way, just you perspective, your of do thinking use or are asked internal you How it's the contemplate right operating EBITDA another stabilized the were through you that could or stabilized

Craig Pommells

one. this take that Brian, Hi Craig. is I'll

kind about and going our to relates we're as we're So, leverage cautious as to ratio. continue that of balanced remain it to thinking

but -- increased continuing the continuing Board authorization, still the monitor we're So, environment. and still to its we're

need that has all that. of been terms the business long-term that fund in to then to our make the We against it first, approach sustaining in profile returning growing have our in internal investments But we forecast capital doing the and the and environment. of that of go external context environment shareholders. And risk to what's and we're of

of a would our think, what I conservative I balanced as view a all I -- view So, we -- kind approach think continue. will what as

Operator

Citi. question ahead. Jon Tower next comes go Please Our of from

Jon Tower

if Just me, few a may. I for

at clarification breakdown restaurants of after a the quarter actual mix questions then and the terms in in price First, that. of traffic the

Craig Pommells

about So, more we Jon focused sales. -- talking so, have on really been

deeper not much time. to at this think to -- that deeper, So, I get much going not we're going than

Jon Tower

Okay.

And least supply respect they like your on looked of it quarter levels? there earlier at holidays inventories, been to building were with than well there, Sandy, curious normally quarter, anything in if higher the is or commentary going end that inventory I'm the ahead this securing back and to have about you Going past. goes to else at some seasonally

Sandy Cochran

hit No, it. I you think

about being our important so chain us seasons all, are careful disruption first -- in that those really teams holiday Halloween early. the particularly we that's Christmas Our and our supply of harvest, merchandise are and brought ensuring, balancing to

we actually the be had would increase time last ditch We about the environment overall inventory. of sort just more inventory. which being our balance about secondly, is retail them, go managing being had so we inventory year. are most -- sure to significant with that with think wished the try chain why there really But increased be. So, should inventory of thoughtful the level anticipate not and the said, we seeing as that some disruptions supply reason we you're where support our what sort this to to to is, are, seeing teams the sales And ditch you're is where consumers

Jon Tower

to And side of the fairly to the the it. large that business. a managing that some and after reminder are kind the with Got time weeks retailers go again some leads inventories and hard decided retail having their of markdowns. of to respect next We've the question have in morning, several this seen then a past

curious in So, large other performed I'm have in retailers know of business discounting. direction your the increasing how to has moved past the when

Sandy Cochran

no you environment one retail Well, outside -- -- Yes. is operates of issue. broader the context the an

-- strategies buy. back environment. well the business -- through those us to it's and an to largely in insulates going the have manage understand against our unique, can back resulted degree But that. merchandise ensure be that. impulse our some heard, are in highly recent be And priced, know, so, -- promotional, relatively through that retail our We've [Technical our when Difficulty] buys we the teams competing generally environment is we as been low I we'll we as announcements gets And believe positioned we new this to retail from we there, our guests that which

Jon Tower

leaned guys -- core that one given in that the core the hasn't curious might know I'm of really the about know to reconsidering historically, marketplace. to call pressures or last environment. at the are offers kind time you macro the me, I on then, customers this to action your in lot just backdrop a of perhaps are And it. messaging Got your your thinking consumers customers moment? now pulse if for are it But the limited brand facing

Sandy Cochran

I'll let Jen that take one.

Jennifer Tate

Yes.

we is. brand everyday a menu. of certainly our we to to advertise I couponing great not think and part who been that have of discounting you think see do and market prices our that's going to continuing are I turn never are lot our on us

We a or it's of going do up continue planned to fall see do to that and promotional and some not the LTO on construct. sometimes television, and summer you're food discounted news, and will do we late that. So, be in some advertising deep have but us coming beverage

value our well. ongoing flavor we consistent So, everyday I mentioned in feature as pressure behind and price points as earlier, newsworthy advertising our that news

Operator

Sandy our closing to back concludes would Cochran now to conference This question-and-answer like the for remarks. I turn session. over any

Sandy Cochran

call further will plans well the you Thank and but deal great continue joining appreciate we position look speaking those to future as pressures, that uncertainty we Well, consumer that sales navigate of our plans will for the and strategic drive to to both over strengthen forward still a recovery right long you with term. and We the environment, are again the today's in these look we business those model outlined you. inflationary to today, there's and near-term soon. are and the us you confident

Operator

for Thank attending today's now concluded. you conference presentation. The has

lines. your You now may disconnect

Cracker Barrel Old Country Store (CBRL) 7 Jun 222022 Q3 Earnings call transcript