Earnings call transcript Q3 2023

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Operator

Good morning and welcome to the Cracker Barrel Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Kaleb Johannes, Vice President of Investor Relations. Please go ahead.

Kaleb Johannes

Thank you. to webcast. third welcome conference fiscal and and call morning Cracker quarter Barrel's XXXX Good we a morning, This issued quarter our results. third press release announcing refer for press non-GAAP April the release on call, In and XX, XXXX. financial third the we'll measures quarter ended the to other measures gains and from related and transaction amortization, non-GAAP our closure financial impairment tax store recognized and adjusted sale are The the implications. exclude asset to charges, costs noncash the from leaseback

reconciliations provides intended results with these performance. or items a financials. earnings considered GAAP. from per information from understanding The substitute to accordance the or an in company of believes of financial enhanced with net The that including in This for income its share last information information to includes the isolation investors company's the the the financial non-GAAP GAAP prepared is as page not release be press

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

will We up for call for Craig open and the Sandy, Jen. questions then

regarding results by cause results are On many may are be call, materially may and that, and future risks forward-looking and uncertainties statements, of as differ beyond control actual or in known cases, company's made from statements beliefs their expectations expected this future These management's the operating management to events. expectations. which involve

in description risks the at of are SEC. that to and detail release Many and the our described found of with furnish listeners statements cautionary the our the caution that factors of summarized affect are press or readers reports could we information. uncertainties in end and in file forward-looking considering in and results We the

Finally, required company is except applicable no law. may today's shared the be as this on under and update undertakes valid to the call of date, as obligation it, information

Barrel's Cracker Cochran. over call the turn President to Sandy? Sandy and now I'll CEO,

Sandy Cochran

impacted you an of total anticipated, morning, everyone. good started traffic sentiment in experienced came profits, February our of we restaurant We sales April, and our particularly has decline, view, This X.X% of from continuing and reflects which continued in operating for March. negatively fourth and meaningful had date of adjusted to margin softer our as a bit quarter and momentum morning, most our rate which reported quarter through both and Thank QX weaker trend we largely The economic expectations. and This then income out sales below growth both consumer X.X%. sales. retail this In a pressures.

optimistic Although some travel the season we in see improvement are will trends unfolds, June cautiously to we summer and that as July.

May and headwinds, despite industry. sales outpaced for fourth largely traffic April consecutive the quarter. unanticipated in Black growth the casual seen and the the mirrors across full-service And dining what casual experience Our we've Box our index dining

Our excellence and teams the remain and focused operational guest experience. staffing retention on

menu progress everyday initiatives, making and our guests, key innovation is our we're including efforts. loyalty with and resonating value on great cost-savings and Our catering, program other

in medium choppiness we about over feel term. positioning our and and the pressures continued short the expect we Although term, longer good

I'd now some highlights speak third quarter. from like to the to

our value and promotion showcased everyday advertising Our variety. and menu campaign

Home under items, French Chicken such messaging have newer $XX, that Stock our Home and Chicken TV meals Signature highlighted as we we XX Stock entrees, Our guests for Toast. Bacon several reminded and and including Hearty Cheesy

everyday value. which introduced we're leaning been our $X and of We an popular also take-home example into have additional are how meals,

track year compared year. $XXX remains to high the and demand Easter we fiscal heat-and-serve over on off-premise, to growth strong and bundled saw business, for which increased our offerings in million catering prior exceed For our this XX%

retention and perspective, improvements in seeing we're with results. pleased operations turnover an our the we're From

over XXX the at enhanced Our substantially our in new provides with to system labor functionality in model the ability pleased coming and stores, system rollout our fine-tune labor continue labor We're the on will learnings. completed based optimize that weeks. be and and will place we to our the now is allocation,

locations Street. continues Turning the of pleased of model the quarter location and each Maple unit successfully with We the the diligently during recent to opened to and been work to years. in seeing week prepare scale business X opening each performance The have some strongest the optimize brand. with early team sales to

over of call year. some focus a perspective look the detailed the the turn I'll of more now for comment after a and remainder which at financial quarter for QX our discuss outlook, to areas from the I'll to on Craig our of

Craig Pommells

you, and everyone. morning, good Thank Sandy,

quarter, For over million, the reported prior of an total the X.X% of quarter. $XXX.X increase third year we revenue

quarter As March, end was the traffic, April and noted, But out line the in results. Sandy persisted expectations. towards there with negatively impacted started drop our our has intensified through noticeable which a of and in

prior and the versus quarter. store revenue grew to sales, X.X% retail, million, X%. both retail and Restaurant $XXX.X increased to total revenue decreased $XXX.X year restaurant including by Comparable X.X% million

as restaurant in were retail traffic by Our impacted consumer well discretionary shifts sales spending. as deceleration the

Additionally, purchases as be we way their when believe manage reducing some of a with retail to our spend more price-conscious guests us. dining their may overall

which year is of approximately of approximately XXXX fiscal Comparable pricing, driven a restaurant XXXX. sales by X/X which from over store fiscal X.X% grew by from X.X% is carryforward X/X prior new and the total

pricing by primarily closely and value. believe our purchases and that as strong the opposed increases. and effectively balancing to traffic and protection our softer factors impact our believe We margin the check, our pricing in pricing restaurant restaurant trend to is We driven macroeconomic maintaining retail continue strategy are on we is traffic monitor reductions having

%X mix direct X.X%. we've our recently, favorable strategy such with as also and check which with take-homes average Bites favorability and pleased mix as add-on provide included is options, our shareable We've of well been Barrel as program. Our strong the to quarters. Site menu result approximately culinary in our seen recent a of upgrade our guests most Premium a beverage

our line with sales. with expectations. we strong pleased restaurant bundled as and in drove XX.X% in were sales approximately Easter off-premise were our catering We growth our of offerings were business, performance sales Off-premise of

X.X% compared Comparable discretionary to our the We are most store our with saw decreases decor, categories most sales year. declines retail among third quarter in across which prior of largest toys of the our categories. decreased and

sales were softer than to Although inventory we continue good about anticipated, our we levels. feel

X.X%, Restaurant our X.X%. versus of The quarter. XX.X% on to in goods commodity third year by XX.X% sold and driven of eggs. of of inflation the third QX in the cost quarter offset were of primary primarily decrease sales point cost prior XX.X% produce, This basis versus quarter by inflation Moving total commodity quarter of was the goods XX.X% Total drivers prior was was expenses. quarter. XX year sold revenue restaurant pricing in the of menu dairy partially in

atypically activity somewhat we to retail to and a been quarter teams goods a industry. quarter, an reminder, sold expect was problem more broader Increased the the This year higher mitigate are issue, working has retail remain point the promotional cost it COGS was prior by growing XXX XX.X% in near which, elevated normalized Third XX.X% driven term. for for basis diligent increase this And as shrink. shrink inventory although our of rate. retail of sales low versus was

million $XXX million year. end inventories prior at the $XXX compared quarter to Our were in

basis in and were third With leverage, primarily increase inflation decrease by X.X%. offset This was year prior hourly XX other wage the related advertising revenue maintenance driven expenses XX.X% expenses This XX.X% point quarter. XX was of operating year. of restaurant regard revenue XX.X% by labor basis versus partially XX.X% to prior point labor higher expenses. and costs, versus of driven our quarter sales approximately Adjusted were in the primarily by

Our basis administrative point investments year the of X.X% to increase were This our initiatives incentive XX compensation. a and versus expenses quarter X.X% more primarily third resulted general in quarter. support growth in the normalized at prior revenue from

$XX.X of results associated in our include $X.X store well as million Additionally, with costs GAAP million as impairment closures. charges

of this asset for in and charges, amortization the the closure the and All of the $XX.X leaseback X.X% Adjusted the operating quarter gains GAAP transactions, noncash impairment million of from sale $XX.X expenses recognized income income operating store for revenue. was million. of culminated or on

to The prior in expense interest interest level $X.X result of higher higher net the expense was $X.X Net quarter. a a million the of borrowing. compared is million and interest for increase year rates quarter of

rate earnings before tax GAAP quarter our was which closure the effective costs. taxes, basis, rate for GAAP X.X%. the XX%, Our negative of year-to-date was on based the reflecting adjusted On impact our true-up and tax includes store a effective an charges impairment

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

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

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

a that, return to maintaining flexibility Beyond appropriate strong we sheet. to shareholders plan our balance capital while and

third shareholders in quarter, in invested to capital $XX dividends. expenditures, we million and million returned the In $XX we

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

With trends. recent with been fiscal generally the provide Quarter-to-date, top outlook, respect in color April. morning's to on in like to on our I trend some update guidance our additional and line would release has an XXXX this line

travel ahead, are highest-volume by Looking months remains influenced our summer heavily the environment and are patterns. July uncertain. and X June of

Our and year. May, the improvement base-case to trend scenario easier due travel compared from travel that modest comparisons to and a these increased is experience April largely months prior

X%, the expectation growth Street that which location in XXXX reflects during the may expect slip the our our Maple pricing includes X are and couple or Streets the permitting of X traffic We Barrel in to approximately Assuming to and to the fourth total to of to quarter anticipate this Maple improvement X open Several fiscal currently quarter. early X% into Cracker year, new open fiscal towards trend, possibility delays. up new equipment X.X%. due of updated slated revenue a locations end we

inflation X%. wage QX, approximately be anticipate In flat commodity approximately inflation and will be we will hourly

first, assumptions growth, during our summer income inflation addition above contemplates expectation investment and cost the to ensure wage high-traffic for are hospitality exceptional months. the In hours operating following: commodity additional service savings, to we and margin the labor and delivering in revenue

initiatives, Second, year. to well our support an as initiatives loyalty increase within G&A, digital as and our compensation program we to prior have relative strategic in as investments other incentive such

of industry patterns X.X% cost Third, the year $XX in million margin expect range with X.X% we assuming to gains deliver of fiscal we all traffic adjusted expect, into travel and the now have as XXXX. Taking account increased our cost-savings fiscal and and play in now savings operating expect estimate we summer in during out to QX. in this income additional approximately

QX We GAAP rate of X% approximately X%. a expect effective tax and effective of approximately an adjusted rate tax

$XX Finally, we anticipate million capital during expenditures million to the $XX of quarter.

Sandy call outlook. and turn plans back now business our around may so the details over to additional she I'll share

Sandy Cochran

these short-term operating have uncertainty, and share. the business Although will sales we're strategy primary that our is place simultaneously win more continue navigate market currently challenges environment, we current enhancing under focus we remain confident to the our right but in In driving model. growth, we

to our like now strategic priorities. I'd discuss

First, on we're the experience. focused guest

highly are delivering experience. months. on a priority strong We've the for teams execution focused are Our summer guest an and properly staffed placed on high-volume ensuring stores exceptional

believe to key hospitality we us, will make that a support continue investments to to We is for continue this. differentiator and

development drive our will areas also to training We're and well these as and on store of focused employees guest retention further satisfaction. the improvements as believe enhancing

menu strategy, preserve to $XX the landscape. will Second, through and continuing proposition. value Everyday of this advertising been we're will leverage will more equity promotional to competitive our sections appeal to guests our value a in always to our campaign. our pillar to our and continue attractive our to investments we're value have and a and our and strength price been key $XX our be of emphasize value maintain even strong We protect continue continuing core and points believe has and

in for strength dine-in. demonstrates sustained The beyond off-premise and channels, of and holiday our particular value our both everyday proposition growth extends occasions, catering

catering business and enhance We and menu the model. the to are especially continue excited service about

looking and profiles, we're to focused introducing our accelerate to especially flavor group. on appeal segments. bolder more which offerings Third, this, feature remain growth achieve menu frequency To among complex and that we this innovation

Brown our by encouraged Hash we the version For we've our been Biscuit of Steak introduced Egg eggs and example, and Casserole benedict, Bene, response. and recently

guests Our as another way program a and extending digital of loyalty that our initiative. key care our we're is larger and to our initiative part transformation it's hospitality

will think While with especially appeal believe to loyalty guests, all will resonate we segments. growth it the we our program

provide brand incorporates loyalty drive planning excited of the all robust I'm large-scale support features to including in of We've made value implementation initiative, about actionable and program program, in we're increase the of We development our loyalty elements. fun progress beta successful and channels, the believe lifetime retail guest gaming and launch this and significant a the frequency, customer program which higher the complex will for data. July.

continuing we're our model. business to Finally, improve

And with and to significant in also this these labor investments to and program systems, XXXX. leverage has savings technology, optimize our fiscal continue channels, our deliver to managing we our top the line an year, will experience efficiencies. delivered meaningful in further and across cost although business drive Our are food to we this exceptional savings control cost-savings to top systems tightly our processes is operators our pleased and We're environment. expect focus all guest more and delivering protecting challenged the including

market we're share the In frequency positioned business long-term closing, and with has us segments facing focus I up short-term model driving navigate accelerating guest creation. experience, and well currently our on enhancing us value value, believe and our sets the capturing to challenges growth for our

over operator call the the turn to questions. I'll that, your with for And

Operator

our will Katherine come first from America. of [Operator Instructions] Griffin question of And Bank

Katherine Griffin

get we wanted sort you just just consistent understand, digits decelerating is of wanted April? April, comments trends. that on with it of mix -- yes, the the does I noted? clarification those mean trend traffic in kind I Craig, they're you're kind if that a but point running negative of pick just said regarding Or sort that your of I positive contemplate I seeing in traffic May of parse low is want that you up that to of believe to sort comments. to Just single

Craig Pommells

think through as April. what quarter, saying with that consistent in through quarter. industry we've we -- a I what the me is went and And had so our For us, the progressed for I reduction across traffic we entire comfortable candidly, as meaningful May we're think is -- the we

significant -- no So one way no or change change another.

deceleration, not consistent a So a an not acceleration, trend. just

things think I is the worse more not more and dynamic. backdrop we're get challenging. news And better. I mean, seeing seeing the things clearly, is good It's think materially we're I not get

go said a this. ahead on kind Now more just little of I'll that, texture having and bit give

our improvement As see that the would included and expect our we Again, as summer summer, into as a expectation base-case travel the trends. to and May were season. a assumptions. That's in expectation our consistent, continue see is of into that we is summer in we the as modest our then modest improvement a April part we will what's get

Katherine Griffin

quarter. a a a on in had step-up CapEx. just I then And Great. Okay. question There’s bit of third the

year then So why I drivers just the what restaurant that wanted the of outlook to given guidance? for were. sort lowered And know development, CapEx of maintain the full

A –Craig Pommells

– now, getting that Actually, I replacement. We been think caught for this in there some quarters, And we’re story is many, we’re backlog on on repairs. many basically backside equipment equipment issue, finally, for months now many a the of getting good deferred has here. up a and

Operator

Farmer of The from Jeff next question Gordon comes Haskett.

Jeff Farmer

A questions. couple of

just that and comes I'm growth expectation So implied revenue what X% F XQ sales guidance. with curious is that same-store X% the traffic growth to

of would be guidepost bit us little just a there, a can helpful. give of you If sort that

Craig Pommells

X% sales would kind X% Craig. restaurant restaurant is to Yes, the in low sales comp the comp. expect for a will we negative be and higher side, range that on retail, that single-digit comp mid-single-digit in to it's to expectation our Jeff, sales be of

Jeff Farmer

headwinds with strengthening more in being a the Okay. challenging seeing you pressures And some as there terms or demo is -- that's to into sort at then May? Cracker So relates hit bit the and is more That's getting alluded got as seeing being daypart of daypart that or of greater you level, a challenges? specifically helpful. again, hit or concept little that demographic it greater you're customer what Barrel of to

Sandy Cochran

don't why you Jen, one? that take Yes.

Jen Tate

really that this happening what situation the to different from in on were back Jen. seeing concerns we're with pretty like was year it's it think is a prices, pulling one gas them Yes, quarter that leading third quarter, Jeff, about war were which and Ukraine cut guests the spending. Last older a big ago. issues was our I back the really spike

We've frequency from visit those sharp younger those reduced in guests. This a experiencing now with story. seen cohorts. sentiment the we're year, And some from downturn a what nice rebound which coincides consumer in in actually cohorts, different visitation a is among it's fact, older younger

different a with a story third it's quarter. bit So this of

It a quarter at looking you're -- obviously, X at bumpy it's when time.

of like a at of to longer our strategic bit horizon of initiatives So we, course, little look a on with younger since things those most are longer-term initiatives groups.

positive a pull X-year stack, the momentum some younger So back was if we like have still quarter those trickier on groups, with this younger with but seen at certainly a look third cohort. more one we and

Jeff Farmer

bookkeeping. just Okay. And one is last

traffic the shared it, the I QX, quarter. missed did traffic in QX share the pricing I but guys in but mix if you and the the guys quarter? and apologize quarter, You in mix

Craig Pommells

those We did Traffic we prepared addition mix X.X%. I'll positive not but for the of and also had in share quarter price, in negative remarks, go ahead the X.X%. was now. menu the And to

Operator

Our question Dennis of comes UBS. next Geiger from

Dennis Geiger

you brand's little or value expectations Could that against resiliency that of know this mentioned? the the over you backdrop I called out any be backdrop against can helpful. kind the of difficult on compelling resiliency, brand maybe a more thoughts that levers other quarters year, sort pull -- more about your would for here, coming mentioned you more latest you over you the But coming talk the offers.

Sandy Cochran

differentiators. that It broad Yes. Dennis, particularly last their it's if our frequency, key that that continue to our going in believe focus, is age, the appeals can foremost, ensuring the And on a the the brands is income. guest our that you want and differentiated. first brand And guest it's I is delivering trust you're both spectrum prepared the sure is you you're remarks and to to in of of environment, deliver managing really we're on be across a experience the we will part, which highly kind demographics, important Sandy. of focus experience. value. believe We that's hospitality one this to

to a come highlighting just or and focused that not but now. everyday so day. second our XX any why value. not our It's daypart with leads for And on priority, XX -- protecting known and initiative that. under We've We're that can and good menu can right my which promotion promotion. as on It's and leaning find really in ensuring guest on we're the we a promotions deals every in a emphasizing is value, been focused

to another I'll to Jen to we speak been way which our the $X think reaction let encouraged I take-home, deliver the by we've think value the to that. is guests, great and

Third, on innovating drive I And focused to channels. the growth though, growth the to will we're also few speak as appeal let months. Jen in that to way really to a next

Jen Tate

Yes.

starting I a for of the us. value, think, critical that's Sandy, with absolutely part puzzle

our In think addition we our been all to the do $XX, that to menu consumers will growth appeal featuring fact in category, we that that that to XX across are have on all dayparts, we're we've news segments. under entrees and also that's which messaging new

flavors segments. growth more those flavorful, more So that with we've tested complex

that. we good feel So about

has been have addition scores nice that our a on it. value but $X improving see take-homes grow also that that as on helps we us check, checks

are our -- the will all Sustaining a is that have our retail, -- about segments, which for of research excited appealing Everybody done us is thing in I new differentiated we're that growth encompasses across it rewards all real about rewards because loyalty really that in which a very program of proposition very for of beta program, us. month very, new think including segments. the channels, in differentiator very this our be a interested segments all testing we July, be sometime is we away to other going we're is

the the or Our points, makes to retail in think shopping course, guests to across restaurant both are sides to which business, able it be whether earn in restaurant our redeem space. able very points our I and, of unique of going in they're be

of map road whole about launch excited digital and progress we're will loyalty So how the very forward. that our

a will So future that in we the that coming momentum. things lot maintain of think

Sandy Cochran

next to have the remarks, in although you, prepared I thank this differentiator. that And in is our Jen, to that list key be challenged I do allow a to over just guests I -- point. didn't I'll it add, now, my few the list, the great unique does not it And nostalgic -- quarter, the retail, right think next both Jen's to are And a year to fun, that just years. think value. although next the items it's continue will but find -- case the

Dennis Geiger

That’s great color.

I priorities. more, capital may. spoke allocation you Just one if Craig, to

So maybe to respect some that pressure thinking of different I about just about it thinking and thinking dividend and add to spoken ahead? to about to in just thoughts sheet the there attractive you’ve dividend usage the ask, want about, with the near-term is scenarios in looking any macro if comes balance

Craig Pommells

have and a primary are think From and our cash we that. then our cash allocation thoughtful. current dividend flows is and doing in incredibly that currently been is shareholders to I perspective, Street a And our investing Board our our support doing priorities Maple in And and dividend. Barrel way capital that Cracker return we’re our

Our supports dividend. ratio our leverage

don’t I don’t point. in that would So change see at the this that future anything certainly

Operator

comes question King. from next Andrew of Wolf CL The

Andrew Wolf

might it being in is, of think are in why impact? folks but the so out I the asking. you you and Or people April way have I'm know -- Wanted weather to country, don't been had some highways the May. spring a over on and other any the those and in but particularly blame hot any and in well, any already think like the Do sometimes that's south impact? and weather the is related that May, on? follow-up you part that had weather, it's and what wet, do think any April kind of in all to southern relatively Do cool to ask where traffic in of

Sandy Cochran

Well, I start. I'll guess

some some impacted to we there like spring. do don't do. -- We excuse business in that discussion about have from was right. weather were to use number results trip an how that a could of expecting. we've You're not delivered to as the to certainly going the reluctant made fact, that are whether, a to you -- But people heard it a and maybe were whether they cool companies more and it And have that

felt that the would our merchants say our of impacted Certainly, it of summer they purchases our timing clothing.

weren't sundresses cold interested as was and we if in So you sandals, out, later probably still as saw. it

So timing was had consumers. there quarter, we weather don't some believe the it with -- material the the we but it for have impact our impact was think could on on a margin

Andrew Wolf

in it from pretty changing lot the Also have -- risk Okay. a retail imputing retail been a that think had inventory markdown of clean, you lot. It pretty indicates seems got of I clean there's sort lot on kind generally, to don't lot tell you're restaurant I going the either with stores, weather, year-over-year. little just mix lower-price pretty has if bit inventories, stable. And markdown I'm the been I risk. be right? you mean, store to inventory to you Could look a even and they're a swing has the me, inventories of what's your or would just us inventories the like of of down, about the look it So doesn't a down -- -- items. it there? already Am

Sandy Cochran

categories, pull And broadly We ones. back. broadly past magnificent really it the But was saw a sales. it we it few and we base. the over teams, reflected retail across guests saw of our the particularly quarters kind in retail very did they've in delivering conversion impressive store Well, UPT. job And in see the discretionary more in across done QX,

this to with job with this the done have, The moving margins. to They've the vulnerable environment been they good I terms I categories. through we vendors working in our And most point risk. the been managing good And managing of our inventories. a done is make, news in be think of a working have good They've that keep on clean. sure job to you field inventories that our were they were think for possibility merchants the of preparing working

Craig Pommells

we Yes. say -- to And on a go the that part Andrew, -- -- bit, return to I'll the to of shared little promotional as the cadence. to just build business expect we normal before, retail more a business that,

So and activity. better promotional lack we term, return closer about if it shared level pre-COVID level we a had that we expect 'XX, lower promotional fiscal fiscal activity, to, 'XX, for a in you of think of of before to

to that So be the expectation. continues

Andrew Wolf

I ask example, price one question Okay. And could -- into would at comp into for into you give the what's price, price? a And last fiscal For about when if price next -- can take guidance it more for just neutral? the cadence restaurants, when year? pricing us price just baked the QX become flavor you would if didn't any

Craig Pommells

Yes.

We've for using have thoughtful this. QX. been current about guidance approach we've price. We in a that X.X% The the on been -- so couple incredibly things of

for we sentiment value a scores And with holdup continue to long reviews prices and competitor so monitor and We an groups. and approach time continue on.

good we traffic. our impact the about So price that on is feel having

price to think prepared I it's is half of taken the that 'XX. how 'XX, into we've certainly not been fair more certainly will We're a share we'll half. this that time, approach over, smaller exactly first used fiscal fiscal first we but bit some carry The the into at is as means increases. we've into have of And assumption but much what get price of a frequent that the fair carryforward

And a expect, we to next be that the would early. would of as certainly I fiscal call. we expect the more we'll adjust is our about environment still pricing go more as strategy expected to much in talk result that, normal, inflation And into and 'XX, accordingly,

Operator

of Securities. The Jake Truist question next comes from Bartlett

Jake Bartlett

performance your just versus was first on industry. My the

again drivers I'm that. April within But which the the Box, and some you Black make cadence You and of if Black wondering that to outperformance I mentioned May, to. of understand Box whether comparing wondering for you're might I'm the versus yourself what part continued. I be that fourth sure you whether of didn't, want think outperformed maybe And quarter it

the menu on of your price, markets, us particular there's in the think pushback I are with grocery. but some maybe it's curious competition whether

of fact think if Any reversed, what on -- have your market is you're share you that? other it color be in driving might gains that kind any

Craig Pommells

behind a I detail of think that. there's lot

So texture and April. comfortable with line Box we've we're ahead that I been row, think saying full of we the quarters provided with for additional that in is May X in service, Black have a

Sandy Cochran

Black Box casual.

Craig Pommells

about Black and measured gone and we've sorry. Box twice kind how and speak. of so on, that kind our through casual, to it talked caught we've And of price

to but early a more, have lot that there's in look more quarter, there. to appreciate next call. So And I I the the think think -- we get Certainly, sharing about desire it's the on to forward still

Jake Bartlett

it. ask of And even current that not you just your those might underperformance. knowing about trends maybe it really without gone outperformance exact in have or numbers, Got I'm seems, to April, -- even kind

figure what from to first has competitors was in quarter earnings trade-down shifts so the material wasn't there consumer really out, it I'm And trade-up holding really been and in season trying like that in. feels the marking message or

your different that. from than hearing I'm seems What very results

are it of scale large we to that competitors gauge specific of something to making might far. be out whether you customers so exposed marketplaces, there's macro about haven't pressures seen kind your these on where a that I'm So at there some trying your more

Craig Pommells

Yes. it's question. a Yes, good

we where travel season, the different be, the an think example. summer example, areas for I from would the might in as be competitors

get be months on we don't a different And the obviously, -- with just that. be I to pleased super gains. reiterate But that each bad. know good share we cadence report slightly an differently And from market outside others. of either out area to I or where we're it the into individual think that could to would guess I perform the that beyond would I we would that, helpful

Jake Bartlett

Okay. math the this where another And on Craig, another your bad And there. COGS. COGS, -- quarter guy then there's is a a question there's for kind restaurant continued of in

impacted portion If in you that things and menu inflation, I year-over-year freight price that, of you which there's a was think, of from line. getting maybe and look mix. I commodity at X.X% by X.X% are think thinking like that's, I benefit another

a lapping quarter, is this fifth third last drag bad question the has it's kind But quarter that the is in of year. been of now guy the -- so

know math the us should bad be? So fourth is more of there be maybe more we What there. fourth quarter? out, you the or the much inflation, commodity guy coming? simple help flat could COGS specific if COGS another can pricing. you in X.X% in Or If flat restaurant-level Is kind quarter,

Craig Pommells

Yes.

Barrel mix on. component to which a think, really the holistic think I -- and COGS experience been the more flavored and drinks give mix like our -- shareables are guests doing as that's not well the prior and relates that we've more I quarters including work options make to impacting Bites, component experience, so to their things QX

So is might the example there be -- real a this example.

a someone You And have out percent, a percent you tea. have -- mid-teens unflavored still of tea, iced iced which very and you has trades low to COGS iced it's COGS higher. tea level flavored but

drives that So seeing. that mix tea that you're

the add-ons. the the mix I elaborate going depend the on component those answer give attachment is of because reason And is to

drive in see that to impact we restaurant there we'll see continue higher check, that that that a there, to impact. was COGS. And degree mix some degree this positive outperform the we softness the to level which won't X.X% those there, of add-ons mix seen that the then quarter, to we've degree to the in So is

to So the depend mix. restaurant on it's really going

line, is not. appealing. it's and of our of to with to cash for We've some a growth us it increase opt And been kind some drive also relates profits, they happy things deliver helps top and the completely guest to way us it cash, find that. the up in That or as segments that to

it's get and that to, you're that it's I way in the utilizing we're impact referring -- it. strategic the think P So mix I

Jake Bartlett

there’s last a number stores, then of On been closures. And question. Great.

May. Cracker So there I think X I was in X Barrels, think

maybe So think there’s expecting kind Street we’re the in the for openings of X Cracker no of closures quarter in Barrel. third Maple quarter. I also, But then net fourth

opened you X net and flat. there was So

either color whether you we we helpful. if brand, us on So closures in that on should can would whether be continued give some expect should model more,

Craig Pommells

that to business restaurants, in closing approach Our restaurants. a closures not restaurant of largely is we’re operating

of XXX-plus performers of and low make anything, to portfolio the going with have them performers, be to And that performers, better. you in high low So you’re work the medium performers.

their of on performers out COVID, as would that this to a to have those recovery. exit we be we handful in had came and then of on we working at And been stores low throughout working point case, And in some not able of to those those the that the some and the we stores conclusion operate year, profitably decision we made came of some markets.

to what’s led position. this that’s So

QX, had had in and in So you X we QX. then early – we X we Barrel QX, in we X had noted, as – in Cracker

and coming coming COVID a of improve It’s to function timing not shift. more it’s of working profitably. to conclusion going that are be and to stores these operate then the not So to strategic a we able them out

handful we Maple part the it would near-term stores It Street, refine a differently. model, continued that were business our be model, to relates it a part on as to agreement business franchise of that As the had long-term but of of was type we do we’ve not a that may of model. business

all them and then of exit So challenged case. were we decided to purchase them, particularly we those that decided and of in stores, some to

a of business getting up scale. it’s set So ultimately to that part

that those of one-off was we that part bit location a that, didn’t X of and – of with. X of a X a was them path So didn’t test that were a then see forward location a

restores shift, on bee’ to better on a time. a of strategic for working forward not So for of of we've that coming a, a just to period of decision we’re kind lack move some term, more a

Operator

The The Benchmark of from Todd comes next Company. question Brooks

Todd Brooks

concept and cost Street, growth 'XX growth growth units brand build of go especially costs to play see far but maybe growth One to forward? to the construction to a when like as we unit as how going type for environment, Maple talk really in what of going into you'd accelerate the also to we rate, think were accelerate retrenchment that brand of And looking the unit of construction that how we follow-up is just into about difficult may forward. the Can on should kind about you as build? cost

Craig Pommells

escalated I the And think there think you In and on costs hit -- shifted. on interest unit all aware, rates of slowing have we're construction are the escalated. midterm, major as and points is the when there, all Todd. really construction The -- I economy have view costs down so has not growth our higher. long-term

to bit in a macro environment. disconnect in ways the of cost build and a there's So the what's some happening between

the So still the is same. long-term strategy

working a the each that might we're on to near ensure We ago. our have we term, shareholders delivering more And this in that we means of that opportunities passing are units. an in new that year adequate even return the are -- with to

Now comes environment environment we world as anticipate normalizes that that the able do adjusts for be and the real resume. into -- current estate we'll the to

going cost the also also every to a you're addition to estate a over always of In as in as optimize have -- we're model that, there more take some host that's to been going the in your real business, we're ways. of years working and few that, of form whole work. lot last shifts through And

we're our through and going have actually we how shifted. sites can think where So site an in that model update opportunity we has

environment and to really view and in is that. also approach And some we're long-term well. the same, for updating the as cooling our we're So monitor our

Todd Brooks

Craig. great, That's

was Second just about talking pullback cited. the follow-up, that April

the data curious look start how the management may be I mix consumer the full the part settling at out, mix you us any and just share gave quarter. if check if on was consumer? attach for maybe April or either seeing rates, changed to the can where of you You you're

do in of around pricing there future detailed been actions. the responding thought from how current the And Has to price consumer then, Jen, change increases I testing the future know is a you levels?

Jen Tate

Yes.

consistent. if mix, April. of terms We much it's change, been in pretty didn't any, In see

attachment when So look on things at like -- key we

Sandy Cochran

the restaurant On side.

Jen Tate

Premium all take-homes, tend we've or things the holdout versus we ways course, yes, beverages take that certainly, value. and, about we frequently Craig guests we ways or very the On to can pricing, and $X our all to at at that look look talked And material these of the internal that different into, regards restaurant no of or all really monitor When specific. seen we and side, because measure external small opt just carefully more to that at look increases change. group be Size Barrel with Bites

of not significant have still of pushback the all pricing, any each impact that on type for increase, course, time any an carefully of monitor there. So kind guests kind we any we from take our of seen of we which,

by to economic on right, think pricing throughout number on one industry cutting the area so frequency, especially guests are impacted insecurity. believe where the check but back our rather be opt on would We with with visits may the that of So I -- they they're that have spend category. impacted not particularly

be they're where seems back. that to So pulling

Todd Brooks

You saves? guidance if should did we then prior. for ‘XX. savings from there. you’ve $X in statement? flowing $XX final that upped opportunities you know be Where one anything million where you latched excited cost-save find the into could million know through cost cost we that million preview further to And to on the I the one Okay. income about me. didn’t seem $XX I incremental I guess,

Craig Pommells

line and and single item. in research quite shows the an every their at we’ve guest as down constantly few looking area, where we’re literally changes goes a in guest the looking are satisfaction we our perceptions. Todd, food And made other with every cost company, improvement or

are continues where long little single are a There a in are enterprise supplies, more is and So Internet really we’re we’re that fees, looking things, area. list on. lot banking there an of that a components It’s initiative nature. of different of bit indirect this those, – function, But every really at indirects. costs, other single every labor

every the utilities at area the looking company. single We’re less in of

improvement perspective. make ways guests. And change, is a from a where we guest to improve in from takeaway our We’re an our not it’s efficiency a for cases do where looking

us So from $XX FY this up million. that are see benefit is thing. confidence things to big the one little in continue gives big that add lot the it’s initiative. point to thing. There not we’ll are it one There just – of And ‘XX little a that

Operator

follow-up next question Jeff from Haskett. a of is Gordon Farmer The

Jeff Farmer

we it, be You and G&A on thinking heading how did about but in fiscal into should the QX touch 'XX? dollars

Craig Pommells

is best forecast G&A I the to forward. to think G&A QX dollar amount at that and think way the and look about QX dollars

incentive the is that things And comp in true-ups. or with up you G&A there. move down, with challenges end the of up big as is One number,

at the year. prior a to So recent is it's much more look to than look at it better to quarters comparison the

Jeff Farmer

of look out be then get at work can I next investments just think need about that something months? in you the you made there's as to that of as into -- topic, on thinking significant terms or to that might you enterprise again Okay. that. with level in there would corporate XX terms the 'XX, And incremental

Craig Pommells

quarter. talk about the in We'll 'XX next more

environment labor they they about. talked so double a been so that's all better segments, year, in what that well. our we've to times is about Sandy experience, really important this which been investment. investments capabilities down appeal for we've consumers wonderful as is on our frequency And in where and is that growth the back big loyalty go in do particular And that's program, then the to I'll think -- an get I the cutting -- digital and what a are bit a on our out business said

some So investments we're there. making additional

Jeff Farmer

Okay. And final question for me.

last my You model, openings in not share – looking think weeks, over several does which the made that had shown perfect It Maple of just some But disclosed of strength. Maple average terms Maple I some are guys is volumes did you the guys recent down for Street that commentary sales operating some the that at Street range roughly Street. weekly appear don’t quarters. in mid-single-digit

that Street? in is declines for aggressively the pursue as are Maple sales, driving weekly decline in what’s seeing average you ballpark more and math that Assuming you openings

A –Craig Pommells

There couple those lower things exited were spoke we we – of those had earlier, are stores arrangements about Once type a AUVs. that there. franchise

the That’s we down. into AUV the brought when So brought that system, those one.

certainly that’s of couple traffic months Maple Street impacted lower been expectations. by in Barrel has Cracker the – also has Additionally, like last than

the that, say new strongly. opened have stores very I again, will very, Now

and to are to some degree. continuing the refinements be make better We to the to continuing weekday has there a greater business we’re for pleased grow example, held there, with, weekend up business

Operator

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

Sandy Cochran

today. joining us Well, All right. you thank for

successfully on that on then are accelerating Although facing We value challenges support. with navigate and that these drive strategic confident appreciate your our everyday improving value the our business to we we're us priorities creation. and headwinds, positioned frequency help experience, long-term well and that uncertainty our I'm these model and segments heightened near-term interest guest will growth

Operator

for may you you has today’s Thank now conference and now presentation, attending concluded. The disconnect.

Cracker Barrel Old Country Store (CBRL) 6 Jun 232023 Q3 Earnings call transcript