- Earnings call transcript Q1 2023

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Operator

Good day, and welcome to the Cracker Barrel’s Fiscal 2023 First Quarter Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask question. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to [indiscernible] Vice President of Investor Relations. ahead. go Please

Unidentified Company Representative

In a our these adjusted morning, fiscal transactions, proxy Meeting Good we to Barrel's refer quarter Cracker This a this earnings the quarter financial recognized accordance results intended items non-cash and The Thank include company's or and contest enhanced the considered amortization we net call, conference the and call the press the quarter will connection results. asset first our the XXXX release in non-GAAP financial XX, morning, provide impact XXXX investors related to press the the with The and as first release press of with isolation reconciliations of performance. in company Annual prepared financials. for exclude The on you. financial to information measures announcing welcome an the first company's this release from webcast. the or and issued for excluding leaseback non-GAAP from to to Shareholders. non-GAAP in with to XXXX. pages understanding the sale gains share of information information its related substitute tax on for October income settlement that and GAAP last ended be not GAAP. financial and is per believes measures are expenses of This

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

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

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

Sandy Cochran

with store you, I of pleased growth sales store comparable morning, growth retail total of good sales Thank sales growth was we results, and included X.X% X%. of restaurant which everyone. announced morning, This these comparable X.X%. and

the income Our adjusted X.X% the was reflected of were we operating during anticipating within expectations high persistently and inflation our quarter. also that margin

on especially our our strategic working with taking on our is improve I costs now and beyond. navigate deliver position the inflation And experience, fiscal environment us From summer initiatives that I'd rest to P&L drive to and and had reacting launched value, resonating a our expected guest speak performance these deliver well first continues to commodity retail those the to some tracking teams products menu year than store and quarter. originally from we're over to will are like to operations Despite the over great highlights and improved the the and our of guests, initiatives. value are the believe to seeking margins. of focus and across response to macroeconomic this the longer guest believe initiative we to a year, proposition we positively strong balance guests our the the culinary abate perspective, we believe headwinds, While saw we we positive breakfast are pressure hospitality.

breakfast as the in chicken we our the for and well Pancakes quarter. did build-your-own Strawberry that platform performed Cheesecake signature category Our featured our

mix we Additionally, and with and bites, by driven increased beverages, that desserts saw we're we're sales wine. favorable with non-alcoholic check the growth sides, premium barrel of and happy beer seeing

our well. strong saw were we the Our prior growth as retail business We in such and results, performance apparel teams again accessories our seasonal themes and categories year. harvest in Halloween performed and the in delivered particularly considering decor lapping and everyday our especially and

on key visitation metrics. progress From initiatives, quarter, by on for which focused we and that September in the perspective, we our that a to guests most sustained the older. some our XX guest improvement I was to guest remain and visitation and data guest pleased is recent our we continued the hospitality dine-in through showed July During make improvements and are experience

in and we year. encouraged prior result we this the this While with were the cautiously the over see by improvements of buoyed delta wrapping balance optimistic are this year, by further was cohort likely that will our

younger We culinary and and income $XX guests lower initiatives are are who economic million FY model, also strong 'XX. in cost to the with our we achieve responding to who with believe to proposition traction as marketing business of gains remain guests pressures million We're financial track we and goal our savings saw visitation we value the current believe strengthening they environment. on our responding $XX our navigate to gaining

is the expanded and which results. Additionally, our been the now system, have over of new in encouraged by stores XXX labor test we

opened share in three and once will now during Georgia. unit Craig year. details upcoming in our in greater Lastly, initiatives. locations detail includes one Texas Maple quarter cover provide Street he's results our about some first is target. and the I'll towards for two new making fiscal QX, which finished, additional new progress expectations They And their

Craig Pommells

good Sandy, you, and Thank morning, everyone.

by increased an quarter, million $XXX.X our revenue over and increase top million, revenue year total versus delivered to $XXX.X first X.X% $XXX.X million the prior included grew we by X% X% including of total increased the consisted approximately prior which X% Comparable to store of line retail of restaurant retail results X% XXXX year the by approximately with prior line pricing, primarily and which X.X%. the For store grew carryforward X.X% restaurant driven X.X% year, in approximately pricing. new over fiscal pricing and quarter. quarter. sales Restaurant Comparable sales, expectations, from revenue both

any the pleased first guests compared apparel prior from category. were restaurant monitoring closely we're pricing of delivered sales traffic store largest are in pushback the not XX.X% quarter on to our this meaningful and and regard. We impact year. increases accessories by we has the retail happened or that sales the seen have increased Off-premise core X.X% and of sales. and Comparable The check,

the costs across year-over-year were by were XX.X% our quarter the XX.X% inflation to in restaurant quarter produce. cost XX.X% sales basket revenue The sold on quarter of dairy experienced point the elevated versus commodity by XX.X% was our freight of increase of quarter. the of versus inflation offset partially increase sold This commodity pricing. entire was and was cost poultry, the goods in prior basis Total expenses. driven drivers the QX prior Moving in and of was seen XX% market year primary primarily the goods year we in in quarter. total first quarter of over Restaurant XXX

prior primarily point sold XX.X% costs. in by increased goods retail and XX.X% activity quarter quarter. higher freight sales of was increase year was versus of the XXX retail First This basis promotional driven cost

Our compared historical inventories reminder, a million, end levels. year, below quarter the at $XXX prior million in were were $XXX to as which

by areas cost, quarter base, everyday several most and delivery. regard supply our a retail over to for lower addition to investments revenue Christmas was chain XX Wage challenges and planned certain merchandise of expenses acceleration comping related X%. in including to actions quarter, basis In our intentional the prior of decrease XX.X% ensure was support labor and higher versus year our themes to XX% purchasing were inflation the and on our labor first of our points. in mitigate year-over-year was to in increase With in categories and part, especially a on-time driven our of this sales, in inventories quarter

quarter. quarter of in Finally, administrative quarter. year adjusted of were operating prior XX% X.X% revenue in and expenses revenue our versus prior X.X% first general expenses in year And the the other the were XX.X% versus adjusted

was income level All Net income expense Adjusted culminated result $XX.X is the operating in interest quarter. gains the million transactions from the interest quarter of borrowing. and million, net higher of for $X.X a million was expense and for compared or the recognized in rates quarter This asset contest increase the of of of operating and proxy year GAAP the to $X.X million. prior on interest to revenue. higher leaseback of settlements $XX X.X% of the the this for the adjusted related non-cash sale amortization expenses and

first quarter tax was the effective GAAP Our XX.X%. rate for

were quarter first First diluted share of $X.XX share were EBITDA earnings $X.XX. diluted X.X% per GAAP In million total per adjusted or $XX.X the quarter, was revenue. and adjusted earnings

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

invested Cracker the of Maple priority in remains growth and Our first Barrel Street.

capital plan to stores invested of and million first million first quarter and to repurchases. dividends of balance a quarter, we sheet. the on expenditures, shareholders the capital our Beyond flexibility we In $XX through while in appropriate maintaining return that, we $XX.X and to existing conservative in shareholders a primarily returned maintenance combination share

$XXX with million we in total Lastly, debt. quarter ended the

should associated release ratio leverage be as filed within like outlook our morning's this be uncertainties the color to For target outlook, respect the provided risks reports fiscal X.X on with would with we I full provide our of today's Everyone of XXXX guidance our times will this SEC. With X.X described the our release. to and and some expect additional in in year, in range mindful the times. earnings to

travelers. try saw this as in our out lower-income guests month-to-month business the August. impact higher on these We side but that continue inflation in of when expect shift, exceeded margins. that Predicting or on risks, of positively however, uncertainty traffic. whether, began the and for year we of then supply since dine-in but such drivers to we recessionary a strong, predicting to much expectations challenging the when balance to holiday strong softening becomes were play the chain how particularly economic year the return consequently, special weigh We've they and sales occasion difficult. balance can fiscal particular operate some October. even slightly September the XX a of Consumer and negatively depended our our over increased sales, environment November and seen groups challenging sales makes we to year due the constraints on of and and performance impact are things when we and to confidence, more lower in are August catering a

of balance makes year. normal to as the the this cost of as All more to the in the applies project than challenging attempt we side inflation. leaves we predict tea This also changes read commodity out to

complicated inflation expect the wins. basket to moderate, We commodity magnitude but by and is market timing

lower example, by pork may dairy be than offset higher and anticipated chicken increases produce. prices in and For eggs,

numbers. X%. Turning prior currently revenue We growth over the total year to to FY the X% expect of 'XX

multiple surveys anticipated total expected Comparable to XX reactions be including favorable are of prudent lower the monitor the guest for inflation pricing pricing. to QX X% in in pricing approximately four the holdback this and of guest groups, for year. total remain X% driven locations of increases, is new We opening opening pricing in inflation now addition Street mid-single believe store digit price to locations. Cracker to growth third-party the by In to our We inflation approaches in double-digit XX inflation X% thoughtful with approach slight utilizing and wage primarily and rates of the QX wage anticipate fiscal approximately first inflation to monitoring We through. fiscal comparable annual to three and X% low and X% growth, store sales remainder deflation to and sales anticipate peaked and assumes Barrel for commodity Maple new year to the approximately in inflation and now We QX. QX year. flow of expect

between over million the ending deliver done said year several approximately in earlier, fiscal I year, to $XX from cost million rate savings to of we to we've annualized savings this quarters. continue run million $XX during last the $XX at the expect As work

deliver the savings anticipate remaining and being XX% XX% to under much a reminder, expenses. the with each As other operating related in labor we realized restaurant of costs of annualized and just

incentive compensation on QX the to maintenance. near G&A wage in for QX. margin margin high the inflation historic operating compared savings, the In most addition will to the assumptions expectation which impact notably and Moderation a of normalization, following supplies, in above utilities meaningful P&L, commodity our contemplates cost growth, prior retail other continued assumptions, and areas and revenue in inflation and and income pressures year have

we the will move to continue We back we said the believe fiscal improve last costs that to year. as our what gradually quarter half of

timing QX. bit the that a the out the to heavily shifted benefits back While weighted are likely half so has of more

we income operating result, below anticipate a margin that As second will the prior quarter. meaningfully adjusted be our quarter year

expect in year commodity the moderates we will the inflation further as improve operating margin rate savings However, of half cost and our income traction. our initiatives gained back

X% As a the this year we be QX to high Taking margin our range. reported. all adjusted we first will operating result, just of income anticipate into above quarter income be margin we expect operating the account, well in full

be to downside to deterioration there the is believe further of the our increases. further there or in moderate environment commodity be or to if in if potential and inflation consumer moderation also operating We were income fails were if expectation environment there upside

Lastly, be to details the around we for million. investments roughly so year $XXX share business that for million, I'll Sandy may call new expenditures approximately and fiscal that the XXXX. she the anticipate capital store $XX will back plans now over outlook additional of turn including

Sandy Cochran

outlined, with and remain we uncertainty. we the is the recessionary environment current this, in plans challenging believe navigate to see fiscal in our and especially and inflation predict, to Craig improved As to will later year. performance Despite confident regard

Now I'd to to speak QX the some of like highlights.

is higher for for our off-premise particularly our and especially a quarter seasonally business. quarter to As true an due this reminder, volumes second is important us

looking Craig which a home friends, Christmas. we're our meal provide heat-and-serve strong cooked performance demand for again offerings, pleased to and a for with We at saw our delicious resonate As generally with November. we're that guests to their mentioned, family Thanksgiving convenient strong looking and in continue to value forward are

and one fiscal have our recall, of support growth to catering our track to we within to on was meaningful driven and target. may achieve catering our year optimized the Enhancements business our for to you offerings million. As XX% goals grow $XXX channel this marketing are growth

technology margins we're I'm prevailing maintain a app attractive the Craig striking reduces preserve improves environment, and beginning user we of of mindful believe and messaging the into is points. much preserving further make at as From be pricing and menu our closely preserving value believe with experience, critical protecting enhance an balance reaction. pricing thoughtful months. and and the Given and the we'll we value Continue We value emphasized, about how appropriate we're our leadership the upcoming launched ordering which experience particularly guest the leaning we in strength, of sections our price to November, importance and new our a we're value monitoring taking remain being to perspective, to are to greatly to invest excited completely and friction easier. guest in reordering that entry

the foundation app guest plan during launch enhancing lays the also to addition fourth for program, new which we In our quarter. the the to experience, loyalty

generally our and overall Christmas performance with our been have pleased expectations. quarter-to-date results been retail, we've within theme Regarding

start potential headwinds levels. activity historical our aggressive continue delivered we're retail In initiatives. and results we our and our in prior to progress in discounting. the retail However, promotional year, encouraged offerings strategy well were great confident the of QX monitor QX. our within that while at unique expectations, strong We and even conclusion, expect the points environment though still to remain our below believe than on macroeconomic our it's higher will price we by making we and resonate And we business, benefits guest be with face

to our see the year significant becomes latter environment improvements of from continue especially to fiscal further the traction inflation, face performance the gain more in favorable. portion as but initiatives expect We our to headwinds, and external

the most variety known Bill executive Before Company, several for Board up, we've Bilney, Board, announce familiar likely Vice a wrapping senior recently Jody leader great Many of you joined well-known who's CEO, that Bread including in for who restaurant positions our we're Bill Panera happy Chairman. him. Bill, several served of and in are CFO have where of our and years space, a has over Like with to already with respect notably joined Moreton he Executive tenures, Directors.

and opportunities team working with Our to Board the forward him we ahead Jody of looking are management and entire tackle with as us.

operator I'll Lastly, for I'd your like their the thank turn over to to employees our resilience dedication guests. brand their with And and call to that, our continued our you. questions. Thank for and the

Operator

comes We now the Benchmark. ahead. first with will Please Todd today begin Brooks [Operator The session. question-and-answer Instructions] question go from

Todd Brooks

it. taking my Thanks I Hey. questions. for everybody. appreciate Good morning,

Sandy Cochran

morning. Good

Todd Brooks

I on I up we is side. ask far talked questions. this about Can One being I would the I Craig, earlier product inventory to to supply dollars year some close the side. we enough for a If think know the flowing pointed in unit or retail about that holiday thought And could chain couple as be like friction timing XX%, you have something the of you most I think about now talk maybe we'd look -- on versus what of and inventories the comparison. were still maybe year for year-over-year holiday. last of normalized as that

can would increases inventory running for for that what So unit about be maybe retail, if we you're helpful. talk

Sandy Cochran

I take don't that Why Good one, Todd. morning.

Todd Brooks

Sure.

Sandy Cochran

I'll try to give bit you Sandy. This of little color. is a

more order we're product And over really the of So because still XX% earlier XX% if then about in of you in by increase see end second some in everyday far won't that to were will we bringing it just the certainly than the the no, than our still support the it would quarter, in increase is to the business. end increase have. system. an And of a of inventory, through break little bringing but down inventory the and little year is We some. ahead the so of difference a work by

food, the that the the So actually care but unit I increase had that's it to in supports and But X% have increase about business we you liked I'd board. have has have of don't day. say every more cost last across personal counts. would year, been

we inventories you'll more second up. the And the I point. positioned normalizing the at yes, this comfortable where through I'm half of as think in year. the year, with see So are we're go

Todd Brooks

back jump then Great. second Sandy. the a question, Thanks, Okay. then And queue. I'll and in

unique a calendar upcoming have You where January. ends quarter in this

you. the you review take I'm last it's you just actions us like brunt can levels for year. it as constrained type not room fully just ago, you the far to unit QX the going top just had So holiday hours, while full where opportunity either of what in of position wondering, a as staffing is now 'XX? operating the into closures, Omicron side? where on that were be What had of Thank and staffing dining seeing fiscal -- the quarter seems should line -- and but what right

Sandy Cochran

so -- dealing a the yesterday in long are it ago and all a with COVID. of does way we way yeah, time seem a Well, in only

our our in this staffed. do terms I end for of we December are to where mean, of I it. we can for us we involve which feel are or -- quarter the second of expectations really of we very is were on being part staffing the see so, about tell where you good levels year, able So measure that started lapping XX December or Omicron the as about us impact

of pre-COVID. have we'd we like to more, way have was pockets that that that course, stores but still Of

in recall. of was In more servers, I impacting as with year, were terms with I call-outs. staffing, front the of and struggling house think, we It also the particularly last

were come were impacting the stores work. staffed, staff impact of So that COVID to even couldn't when the

dining where were times we to limit have did we having So rooms.

know had go probably into our some were And there to all second think stores even probably performance. I hurt do that even more our that think I speak some last for off-premise visitation. was the old will COVID Jen that, the only. year that year at of guest to that expectations point, factored is concerns. sensitive us disproportionately to guest since think We we to quarter XX

forward the second one quarter. those to so of back during coming we're And guests the looking reasons

Todd Brooks

quick end off on change to the one And Okay. point. kind up low I X% was coming in last that follow-up expectations. revenue the in guidance, quarter a of down at prior year taking up line just the that If X% from look with annual

that year? where returning customer potentially You are strength the wise we from we fiscal the low Thanks. dropping of end the spoke XX plus to of end why in at were guidance revenue the

Craig Pommells

The a a it's -- is reason question. good great It's volatility. very underlying

that So doing expectations. better particularly strong. to the so what a in is October start and has seen year strong November far year. our August fiscal we've started really August, than been this September, softened

line function So increased. in the think results. range what And prices on. in aggregate, they're been folks same experiencing what's that estimates. of I a performance about the so grocery the pocket greater in top feeling our has getting moving confident in generally of the at are around has their in we're volatility stores that's just and news But and of news gas happening time, the books This and is down, but level causing a

range we result, as to in So we our even expectation. believe little continue though think is overall bit broader, a a the

Todd Brooks

Thanks, Okay. That’s helpful. Craig.

Operator

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

Jake Bartlett

and of how one the be I'm was just volatility, I'm that just for was -- And My maybe first detail whether was of wondering helpful. Thanksgiving mean because Any rest there more outside was looked? in Great. wobbly. the Craig, November. little a solid whether a of wondering would of the I clarification November taking question. that Thanks context Thanksgiving, November

Craig Pommells

Good Jake. Absolutely, question.

within November, what catering entire very business. it So go -- And to good business, November as our to November, really holiday did back saw I'll I'll we first have performance with October that speak August the relates we quarter strong. softened. in -- were and our

a softer it the little from but had bit than Our month. improved dining prior expectation, business was

confident to overall movement we're in kind So the again, but of underneath aggregate, goes is line, of feeling overall the that. this theme there In top volatility.

but still from it's bit for period. it improved aggregate, a prior in expectations, the little dine-in, that below So

Jake Bartlett

kind age Great. I little of a that terms a question the of just had in improving the boomers and higher then and cohort, matures that And bit.

in Just being the in security 'XX. to you noting much I'm answer think can Cracker could that Barrel? X.X% be adjustment maybe you How what those that benefit sales the hoping of that, up for that could older confirm of cohort the And of do give accounts if that, great. us would older or be historically, you percentage my XX% was -- on deny for a update just just impression that social about but

Jennifer Tate

Jake. in right? And security their inflation that all-time I terms with sentiment. all still the Hey, I being XX%. we're and are pressure think would with of and Jen. gas more, say, food, up like all-time social or spite that grocery It's in is general, store rent in up increase in significantly seeing guests of lows things lows our XX plus that near of Food

So up, prices, they're down. it's today, low -- and gas although down, been incredibly volatile, up,

and security their Their financial very future. for high. Their is very so is outlook And the negative. sentiment

percentages, quite that. to way It's and right? quite our it It's get group. high, it's plus though I'm has seen with -- down. quite even you're come that not that think going I the into XX recovery left with a some So have our exact high, bit there is and that for we us I of don't not not quite off, guests, in improvement trend not still but

group the think seeing the generation. is we're the most I with increase younger

that the a the technology well. that due we've whether old, on that to done seen undertaking, frequency been think strategic initiatives year increased guests, younger digital increase we've we've quarters, the in with culinary the we're enhancements to with and sustained we that for focus and an XX the particular, is with beverage or last really them for targeted XX is several in in part as the seeing news, improvement group marketing So

Jake Bartlett

frequency. of was I were talked there believe -- The from think about I Great. third a in of -- then of a you higher about traffic math presentation number Yeah. was kind years ago, very coming the and I -- a

it's number, that that So great that's down. where but come I it's got

understand or kind And much on think food what how time the have sure you do there. so, visibility I December. contracted I you at also is, talked contracting I you -- your -- just wanted this to situation through point? and in were I is One just costs, make picture Last largely Craig, the really commodity inflation of

And kind happening so whether to I'm been pricing And whether math also of and regarding and visibility? have contract thing inflation you've then where continued an been than suggest. going more odd there's are the wondering more COGS the COGS, you that's that would -- up

and basis inflation little a So and pure were XX.X% closer of you over would X%, just to get of math kind of the basis points, XXX pricing you XXX points.

So there's now. of of a happened mix for couple of some number negative impact kind that's -- a quarters

like really to it's so trying a driver And It seems [indiscernible]. big that. really understand of what you're

So that would be helpful and maybe that gets lapped.

commodity would just the then be visibility inflation? So understanding helpful. the of It would be better. And that

Craig Pommells

Absolutely.

a there. there components few So are

the the relates a it freight that in there there's and in more to at to bit potentially detail that a explicit COGS inflation we can As little cover the outpacing math, relates follow-up.

Moving to coverage.

XX% covered. XX%, are We about

really is And story moderating. is are commodity -- particular, We we story going the margin And be inflation our process in enough visibility inflation we're that is inflation to expectations. now. what gives -- in is improvement inflation calendar to negotiating that commodity pivotal seeing the us that XXXX have of confidence our

bacon. chicken downward and I think all in the with movements we're familiar

longer what going we for things expectations, have are our is And expected. produce bit than the originally together, down. is move dairy experiencing aggregate, things and a but we eggs expectation little But example, and meeting some going Now our is are do that in some items. produce we to other taken way, it's

be of a profitability is as to which COGS So we result, going our a improvement. big and margin expect story, our improvement driver really

to above a expect to that come well point, be that to And prior we'll -- at be we in QX. of expect year. We fruition come to lot

some we full and the commodity So the taking pricing getting actions been more deflation, have throughout that we also point, are year. at of benefit multiple actions. We've pricing

our started It's expectation it's that out The a of then. bit. fiscal same little all culminates the together is overall similar. we where not pushed So just to

Jake Bartlett

much. so appreciate you Thank it. Great. I

Craig Pommells

You’re welcome.

Operator

next go Tower Jon question comes Citi. with from Please ahead. The

Jon Tower

you appreciate taking I the a time. got I I run if Thanks. Great. can through Curious, it. questions few

to or First, how you're of questions. through more Are explicitly. then to anticipating the instead get thinking kind heading right of those And season just going the say, bit Are on hold in more holiday I've side year's into next in markdown holiday order size to have going little you -- the you holiday got of, markdowns question for the greater season? back to on here going a a couple about forward? terms the inventory inventory retail a aggressive

Sandy Cochran

Yeah.

in -- as -- is maybe said and activity lower than or think prior promotional I Craig remarks, I we're the Jon, prepared historical. what year expecting, said than in but the higher

I and where has trying So inventory manage stores good pretty tightly job have managing the is, to of the so that we then the to done think the allocated it more a think markdowns team demand momentum and gets initially tightly. the

we our far, about So feeling I'm are plan. against good where

really going I discounting be on all the really broadly because environment that by And of. aware we that may we mentioned, impacted to Now be we monitoring said, retail are far, with I being feel the good. overall as so have are

every a for being gives unique. have. I in that we But we our that great is fine. do our very resonating assortments, the tightly particularly managing markdown last guests. think are week, It be great with seems to and gifts, spend the example, It's themes the our value. we're It's controlling sure minute inventory seasonal sell-through,

Jon Tower

or on in us least falls? printed sits either quarter the the looking I this bit quarter-to-date refresh Are last was time, Just below November? then to more an quarter this the or regarding trying with being line meaningfully a drilling provided on just out was revenue something level? a we commentary could more you at basis where then know absolute quarter. guidance And second the that quarter, range margins fiscal on about But all thinking it a the of Maybe guide figure in gave what where in a for year. And post year-over-year moment first into it targeted Okay. the the looking in commentary the -- at idea into within you last kind year. second if little basis.

Craig Pommells

would meaningfully second meaningfully Yeah, the prior quarter and QX, year number exact below. I without giving say the was below first on quarter

in both there. order similar of explanation terms magnitude, of So

Okay. And of the other was what Jon? part question, the

Jon Tower

not got or the... The we just whether revenue piece into, in

Craig Pommells

with November was performance line our in expectations. Over

of So And X% that. a obviously, a it's X% were pleased it's part to we -- with guidance. the overall

little So ahead we a of it met November. expectations, were bit pleased our expectations and our for with

Jon Tower

-- or kind Okay. it me, rolling then the quarter the side time, the on And of of the like fourth in inflation cost you're of the in the with and food the deflation excuse at anticipating half back along year sounds stickier same equation.

looks thinking sounds So the labor be bit as on and as well because shifted well. all little you're for the like OpEx it pricing aggregate a obviously, of costs as year the to line on as full other around inflation at food items some higher

some think to of price a running now. X% I help maybe Is that? taking offset thinking more So there little more bit pricing you're any regarding

Craig Pommells

an conversation. It's ongoing

working to to but a more of time price little a bit prices, We're try could Absolutely, that that that We we will everything be come QX. the been there value inflationary terms way time, the inflation and longer we're in and I The think pricing recover has value do that what together starts that's is can think to it's the well have that a analysis odd price quarter, the we an on in for to -- ensure could this, monitoring there and taking played really of more for continue now plays consumer some lose that balance to and think in the all in to of same approach price resonates, think. bit environment way? break. we're years be margins. us, thoughtful approach that in margin fourth like lot behind the margin. we've between we're a ground and We assuming something leadership That we a the to strike in leader. we done where components along making that be to pricing by or that of over environment the going starting And taken out and recessionary up be out the don't at we well Again, be. somewhat traffic. particular, are little the our to really

too So price far ahead we on to in. get want don't

So come we start answer. of and about we're to margins it's long very this say, it, a to all by being of terms Needless will thoughtful think together in QX.

Jon Tower

Got it. last for one I me. appreciate that. And the then just

You've new recent members in the had join board few a past.

policies allocation have know these it was company at around joining, board probably is -- have discussions think X around today, new capital allocation I'm curious any updated the capital members. they just one the since the And I So thoughts but evolved I been policies? what

Sandy Cochran

at the Jodi's or joined members, Bill He been And discuss Board member allocation week our meeting. at right? was board so. Well, ago hasn't to a a to first capital Board -- first, And never every -- today, every Board new meeting. meeting continues

then opportunity an and buybacks, beyond the they to through time. in judgment they Board I committed and return a have the best the much what and evaluating take So to the yet those to -- that that, new. we growth Street. Barrel they're capital prioritizes of each they the constantly are Cracker Maple haven't dividends the would want had view to first, approach And and continues at say making opportunities shareholders of as to balanced

Jon Tower

that basis one When about the where sorry, I'm should think dollar settle it. out? how Got for year, I one me. a from apologize. last G&A about for thinking we should

Craig Pommells

we guidance. of provided that level of level that No, haven't

things For in of mind. G&A, I will keep what couple a

been P&L. G&A has through everything have works as We well, the inflation wages as right, and

some that There margins will are and normalize part in versus to we considerably. improve additional digital G&A. we -- to compensation QX, be a an and that in at large making in bit And incentive like year, our will investments on. are so prior a -- the is initiatives to of of be are we're same that loyalty expecting time, consideration support expecting our additional Another also

QX, in happen moving lot will also particularly to and that and QX. expect investing are there G&A, in a pieces we of there's So QX get in we're some some but normalization and what leverage

Jon Tower

the for Thanks taking questions.

Craig Pommells

Welcome.

Operator

ahead. comes go Mullan question with next Please Brian Deutsche Bank. The from

Brian Mullan

In the seen labor and pleased stores you system being more remarks, to test you. far. the expanding Thank what with mentioned this the Hey. prepared you've of

a So experiencing examples of you few year. year I'm in the roll rest just that just meaningful then benefits you the -- out this still stores if fiscal you the wondering if of test? could could speak are those And savings if expect could to system, provide this you to quickly how

Craig Pommells

million cost part saves, $XX Brian. for end rate $XX it's and of the Yes. a Absolutely, $XX embedded our to at It's the the that million, of million run in -- year.

in seen system with performance. terms of but other also We've are KPIs. We pleased performance both a productivity the solid across number of labor

It way than team with So We're won't it's it. more like at to the run of close to the be but level we're rolled being everything had the I a by fully it. don't thoughtful better -- a detailed We business. visibility just the out end we'll about before. gives be think, they fiscal,

$XX million million why that year. So as at end in a of the component $XX to $XX to million result, that is a the

Brian Mullan

you. a Thank Okay. then And follow-up. just

related this from Can open more construction just many the company under visibility just acquisition. think new a Street what 'XX down into development anywhere at to XX go want building sense to and watching now? is But it an this us fiscal to are pipeline, I for On these are you the guidance this implies right yourself to the as you you're path? the was year. give since kind you're units then point, that, of the Maple And accelerate how 'XX. XX key you I going in think metrics

on So just all update an that.

Sandy Cochran

within now, construction the that that so and terms lot the in but environment be try able equipment a is say, will -- of and we and to how of there's still still to uncertainty. good Let's range, think all -- feel on right of I to open

So construction as on. I delays and have guess, some so could slippage we we have

had, In concentrating opened in we terms and the for, one, I Florida, in openings pleased with I of what have mentioned look I'm that Georgia. been think we Texas. we've We

for locations. variety real of with we're What the And so we making. are and estate comfortable is progress a far, opening in I'm pleased looking -- we're

as But I'm So we we're better model out. also to trying of MacGuire what looking John our team his understand and building what build to doesn't. forward works

that of there team the One the kind place. of growth to support in infrastructure that in over whether think of terms kind of the we in pleased growth infrastructure with and to we the that very and the I'm is progress be resources will putting thing, constraints and have managers making the

Brian Mullan

Thank you.

Operator

Please go The question Katherine comes of Bank with America. next from Griffin ahead.

Katherine Griffin

you. Thank Hi.

it context data Is to the objectives are? leverage frequently? to earlier cohorts I'm getting customer the kind expanding access program. and that sort of having that, you whether what mentioned about First, into bit more some I younger just you of curious about can way. stores more can in sort was if hear a to some the Is what loyalty digital into put of leaning curious it more you

be helpful. just digital color behind think I would sort of leaning into more reason the on

Jennifer Tate

Katherine. Hey, Sure. Jen. It's

First, marketing have our digital targeted skewing done younger segment. I would the say this that from -- in year, we've we increase seen really amongst solid the results

been from and we've we're digital groups, and we've of and that insights grown had study we've those we've the So been pay great amount out marketing quality doing the enhancing that, amongst those our think, with I leveraging segmentation seeing the frequency as groups. targeted

objectives times. really our Now X loyalty, are

think, we've all loyalty and heard I our very, to rewards a desiring it's we our frequency drive foremost, younger traffic and of with interested have cohorts, guests but done, in research first that all definitely program. really are the in very

we have is very a can because loyalty both to a power differentiated whether and our unique special the do, we this obviously, everything to retail a objective, fueling we innovation brand, even marketing And to -- our includes The build over restaurant time so importantly, data pipeline, guests most do experience, course, experiential very of of just have unlock to do. that build delight everything our I we and program, loyalty. that's maybe finally, which our for and and second think that

think I -- of those the loyalty that our are objectives So is program.

Katherine Griffin

is Barrel if to on Cracker brand, that's or pressured like younger to maybe them. customer to how is their in is push base made the wondering there's that, of into I'm just kind could plus cohort bit curious, plus that they as And perhaps of Thank a be case guess little terms if on then what the of very a sort of opposed maybe Okay. be. the than behavior leaning might younger customer your a you value more you. helpful. that about XX important I'm to XX -- ways top different different, That's from newer, purchasing I in layer like price

And of sort customers. mix of how you to newer is think about how value important a

Jennifer Tate

Well, they similar. people brand are nature think experiential loves mix of are what to the experiential able comes say, driving initiatives XX part younger the everybody love XX, attract They their we those the love brand. the getting to deal. I the see When value, brand. a They you're first, They whether done. just great the are our of is guests But very to the very really it we've open to live food, that or things I'd welcome. love

signature Mimosa into very Bites, a opt Shareables or are Barrel or beverages interest category, they likely they coffee one them we So if of size try to alcoholic are desserts. a premium a which crafted in our our can or late over they're like

to So we them those voluntary into been check have able entice builders.

priced to entrees they so And add-ons. of in are and new higher things, opt very trying likely course, to

Katherine Griffin

Thank you so Great. much. Okay.

Jennifer Tate

Thanks.

Operator

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

Sandy Cochran

our joining season. wish drive balance safe happy plans and and start remain for today. the all and appreciate us performance all to your I'm holiday you by year. We confident the our of and encouraged improved Thank the year support over of a you interest in

Operator

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

may disconnect. You now

Cracker Barrel Old Country Store (CBRL) 2 Dec 222023 Q1 Earnings call transcript