CBRL - Earnings call transcript Q3 2024 | Cracker Barrel Old Country Store, Inc.

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Operator

Good day and welcome to the Cracker Barrel Fiscal 2024 Third Quarter Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Adam Hanan, Senior Manager of Investor Relations. Please go ahead, sir.

Adam Hannon

you. Thank welcome Webcast. Third and Conference Fiscal Cracker and Call to morning, Quarter Barrel's XXXX Good we a morning, This issued quarter our results. third press release announcing will measures press to ended for April this release on quarter call, In XXXX. and the third non-GAAP as such we financial XX, adjusted EBITDA this refer our the further release details about refer to press Please these footnotes in for metrics.

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

morning Pommells. Julie the Craig review On Barrel's and business outlook. me Cracker financials Masino Julie a call President and Craig Vice CEO, with President CFO, and of Senior this are will provide and and the

We questions. will then open for up the call

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

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

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

Julie Masino

morning. Good

for be will you prepared the everyone additional on I X haven't plan, shorter update comments details encourage weeks we call remarks Given ago, to provided the transformation review XX than our substantive from today's our usual. already. May if

and This revenue or morning, we EBITDA $XXX.X X.X% total of million revenue. of adjusted of $XX.X reported million

results expectations XX to As we press weaker-than-anticipated our traffic. noted due our below our in May release, fell previously

traffic the XX. for as Our third quarter need May strategic we transformation underscore challenges our on discussed

Of course, impact aggressively business, financial strategic to and we our manage was by as undertake we traffic. encouraged our longer-term lower our day-to-day continue despite I performance initiatives, the of

metrics saw quarter are are we financial roles. performance across improvements key pleased challenged, progress skill hourly key our the most and guest average with highly leading was believe We correlated same-store satisfaction, with solid business teams Although that turnover in speed, level job well. for and our the the are growth, We managed making. indicators, we're the these sales

quarter, prior For example, turnover hourly our XX has year the compared improved points. by to percentage

at speed seat-to-eat key metric by has Our improved X%. the times approximately

missing our by XX%. key improved rating cook has X.X. X.X from Google off-premise the average for increased increased star level skill Our server and scores of The X%, item to positions and by

these visits on deliver which to focus translate operational will in sustained further our that increased metrics confident are We will time. improvements,

of operators trend operational our positive metrics, in also compression I while a effectively the managing margin the focus expenses helped ability our our of along dual manage this, on is on the the lower operators' Additionally, with executing the is job and our indicative and to waste. a discipline transformation, running traffic. of did also believe day-to-day food result business, above organization-wide from good our emphasis mitigate

broader sequential Next, our performance encouraged and headwinds, theme in retail traffic that seasonal the while result retail of our were saw were sales we sales retail also as of a improvements assortments. and monthly challenged same-store we results

confident off-premise; challenges experience; on store position and that the love relevancy, by growing one, four, the significant an the pressured time. remains our evolving strategic performance and winning food digital we're three, signing guest we the will X financial experienced enhancing brand; are deliver our our elevating menu; imperatives the delivering previously focus two, but closing, In we and our pillars: and and in and company profitability creation five, the guests experience for value of over driving employee described,

more year. our Craig turn over now the to financial to rest discuss perspective outlook call quarter the from at I'll for the and Craig? a for detailed financial a the look of

Craig Pommells

good Thank everyone. morning, and you, Julie,

to into getting of remind our to and a financials. it results everyone changes I our guidance, Before as want relates few made we've

EBITDA providing related guidance adjusted before it to focused track expect which performance as strategic higher increased and investors First, adjusted we EBITDA to our our metric on to plan. to the is financial the we meaningful performance are our more depreciation, on we of investments as a impact to key be due now to now evaluate are transformation believe

for adjusted over is life the modified amortization is each remain at gains sale definition we these of the leaseback to adjusted expense Second, the and similar expected from recognized approximately the are leases. and transactions, of EBITDA which a our and asset quarter an no on million noncash remaining longer $X.X of level

pieces we so expense. you to for release tables Additionally, reconciliation back in now are compensation for few press including add We we understand are an moving the there here, information. a additional share-based the refer

X.X% store X.X% total reported decreased X.X% quarter. quarter, Comparable Pricing restaurant revenue $XXX.X third million was and decreased prior year approximately the $XXX.X the the revenue prior by Restaurant versus decreased we $XXX.X million to revenue year. of X%. to over million. sales For retail

pricing and pricing pricing from quarterly XXXX X.X% X.X% carry Our consisted of XXXX. forward new from fiscal approximately fiscal

to of third prior compared store approximately retail year. X.X% Comparable restaurant sales XX.X% quarter sales. the decreased the of sales Off-premise were

how team prior sales soft, we remain effectively levels, managed which were with pleased inventory the retail year. Although has below remain

was menu pricing. year by quarter of XXX point egg Total XX.X% Commodities revenue restaurant sales XX.X% the quarter. was decrease Moving third the for driven driven principally quarter deflated the total XX.X% the X.X%, was oils, goods goods poultry of of cost in by approximately of prices. prior sold versus on in basis to Restaurant expenses. quarter in primarily in lower prior sold and our quarter. by This quarter XX% third versus the year cost

Third retail goods sales quarter This XXX ] the point was was XX.X% driven by quarter. in of of basis [ initial primarily versus retail decrease cost year XX% prior sold higher margin.

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

inflation revenue to labor point by the XXX pricing. the With quarter. of our third increase by XX.X% related guest additional and offset investments basis hours wage in approximately support X.X%, partially and experience was year expenses primarily XX.X% regard labor This in costs, quarter labor to our were prior versus of driven hourly

$X.X advertising XX.X% XX Other higher general in were basis revenue XX.X% increase driven our prior year the transformation expenses X.X% excludes of and was prior operating versus quarter. the administrative to professional quarter our and fees approximately million the for investments related Adjusted expenses of revenue, to to current flat The in third in CEO initiative. transition strategic quarter. by related point the year was quarter results depreciation. million and This expenses which were approximately $X.X primarily in

closure include of million. charges Our and impairment $XX.X store GAAP financial results expenses

slow work Maple on improving on our as is top model business we in investing in the business to May short business. unit down initiatives and investing that focus and allocation Street's in have Our Cracker decided the Barrel growth priority part capital XX. on core discussed while Cracker they of the we Therefore, in Barrel the term

of As a a Maple recorded impairment million. down growth, decision result our of slow Street's we to $X.X goodwill

average in $X.X was to million primarily interest net Net the prior rates interest expense debt interest million expense $X.X of of higher for higher increase levels. was result This and the compared year quarter. quarter the

Our income include year-to-date lower tax a $XX.X million expectations expected GAAP of income lower earnings taxes. credit. taxes were Adjusted $X.X income due primarily were a Both credit. annual impact before million results the taxes to

share the quarter, X.X% Third year per were and loss compared share diluted positive In X.X% or quarter in to million total earnings $XX.X GAAP total revenue adjusted earnings or the were million adjusted negative of $X.XX a was quarter. revenue third EBITDA $X.XX. $XX.X of per prior diluted

a Directors to followed committed returning and The a Now to the the capital capital growth priority, balance Board in be approach, regular million sheet. in third shareholders quarter expenditures. $XX.X to $XXX.X with we by capital balanced allocation of business We cash drive profitable million in $XX is ended turning returned the repurchases. allocation million In invested and to through debt. quarter, continues investing total dividend top to shareholders company's our to share the in quarterly dividends. We

billion we $X.XX to our respect $X.XX With billion. fiscal now XXXX revenue fiscal expect to of XXXX total outlook,

of We approximately anticipate full pricing continue X% year. the to for

and we our now inflation we've inflation anticipate we and baboons, to Street XX of overly already the commodity expect year, planned to We X%. completed We during have approximately new Cracker X be to flat, Barrel approximately expect Maple including the X X openings opened. wage continue now

to expectations above the million, which year driven QX account, QX, well primarily This into which adjusted traffic. our downwardly reflects anticipate $XXX EBITDA Taking in week. our the are for we expectations of as million results full $XXX of XXrd benefit a lower-than-expected for all revised as of our includes approximately by lower

Although adjusted our reduction an relative approximately expectations. million guidance, previous provide we to $XX current EBITDA did not previously our reflects guidance

excluded certain guidance EBITDA adjusted expenses. Our contemplates

of of charges; the benefits second policy $X XX% full to $XX corporate adjusted additional third, approximately strategy First, rate our approximately negative the effective strategic expenses; onetime and related negative quarter. X%. pricing and CEO of XX% of $X million menu change to that an tax $X from consulting rate and in tax approximately year now second, and during approximately favorability negative GAAP We includes million transformation, million a transition to fourth, expect occurred effective X% in negative which fees to our restructuring work; million

to For of negative GAAP approximately we tax X%. negative tax rate the X% approximately rate to of a an effective and quarter, positive negative expect fourth X% adjusted effective X%

Lastly, we to expenditures million anticipate $XXX million. capital $XXX of

operator call the the I'll turn over to now questions. for

Operator

And Gordon come from Jeff Instructions] the question [Operator Haskett. will with Farmer first

Jeffrey Farmer

that weights some lot increased hoping a strategies little value background on you to near-term from peers, your especially bit which advertising of line heard more is pointing just can more color both in the of provide I'm sort your promotion. we've a top

to advertising? appreciate you and that's least but that quarters, been the I guys increasingly environment more over long-term an of promotional looking outlined strategy So couple are of in compete lot next how at ago, a a your you weeks couple

Julie Masino

only equation the not It's food, price in receive quality in positioned the a the of guests. actually is of remember, Jeff, well this restaurants. We that understands really the environment is very they important our feel it's to thanks And the it's multifaceted amount and a but that that for the value brand somebody experience is Barrel Cracker pays, for values, value the because guest. the the value food, it's our question.

new early of call in to ways point. Friday. the an remember we We was our on at It's you'll we on got is and in last for I the strongly dine shared one how very about X great that the out market. very, done X we really of that us guests gate our launching at at program. through on welcoming that very based from to were in. to we've It sharp that that thinking piece $X.XX got it. that Cracker Monday value has of dinner We of Value value all get to were love rushed the earnings price guests believe to very, items p.m. out something going research gate key got Barrel early agenda. QX, We we the underpinned just transformation convey

have What to QX. What that we any So so of right guests their right that didn't started much QX. in times. put these at or is now has behind advertising even now making around that Barrel seeing so May, actually we that beginning seeing aware you're advertising it Cracker some planned that back you're the actually in

this price there So point we dinner. them are sharp for great with at value

our is I a That overall the ago. call about weeks talked big strategy on that of piece a few pricing

Sunrise very also dine are key well. pancakes really chap at breakfast. we price can incredible have new We've all. We price for that or sharp on that's not and that's meat. early you eat to great as program, a a eggs of only key such so a It's this value. of strategy I points point great introduced price I executing $X.XX can't with points, And Specials point signature pricing we barbell eat breakfast breakfast. choice a but with be all, personally our your It an it it features price

it the of take end evaluating So that's really price of of ability kind as our one kind while strategically, last of talked I've calls. about we're couple to on

has through they proposition this guests, actually So dinner Cracker for we're know protected about We're we're we it. and great to channels. well believe and value Barrel that But communicate always ensure will positioned. that our starting just a and our very media to be

Jeffrey Farmer

more then And Okay. quick just follow-ups side. the modeling X on

your think basis EBITDA points something XXX compression. implies for I quarter, So like the adjusted fourth guidance of margin

question missed it, was the mix that that? mix? with in the first the but I the have you traffic but I you pricing and am in And quarter? second I and So share release, think might would the traffic in be one ballpark press is, then the shared -- can

Craig Pommells

negative it's Jeff, ballpark you're traffic for the XXX basis traffic a in rough QX for X.X% to margin approximately the Craig. relates Yes, very terms the basis the in quarter, -- quarter. And in it points. for in of XXX as was terms, very, approximately QX reduction

Operator

Benchmark Company. next from Your will question the Brooks with come Todd

Todd Brooks

coming currently, seeing being how about pressure mean, seeing resonating, quarter. far other consumer what trade just that the on kind your the daypart. developed Jeff's check I you are seeing down of a are as sense value a like management? Just of maybe loss Or parts that following of early the day behavior across same-store and from on you I you're sales and how frequency what really standpoint? get up into out as question, people consumer course to evening

Craig Pommells

Traditionally, The seeing that more consumer pressure, income up terms Cracker over value. sure we're visits. consumer a there. of in if is their I'm under lower terms you've consumer, has recently, the XX,XXX term of consumer. that would well been great not the is held longer and what seeing frequently necessarily, seen actually the particularly but XXX,XXX we're We've the it's But more with some sense. make pressure with in -- the Barrel

the more a in are would there, of trends. I seen highly not we've a so terms of really a retail mix menu on And say We've prior bit of add-ons there large where it reductions in It's there seen and the dine-in mix, little the relative couple to bit that's there is and of -- part things so are like moving side, that conversion. Our a menu little on discretionary a softness of occasion, negative Todd. some amount. pieces,

on more necessarily maybe So retail than in restaurant.

Todd Brooks

That's really helpful.

being to slightly we of Do of If guidance and talked the the from range may. I thinking of you if range XXXX and year qualitative ago, to for EBITDA? flow Any 'XX the investment 'XX, us flattish $XXX the $XXX this that year follow-up, talking be around look couple full that an the that upper to to back be Second a about point weeks outcome? we leads of it million call EBITDA. you're attainable and how million guidance the in being about that maybe if flat we year-over-year in given sense kind half 'XX, would to down fiscal versus being But down EBITDA. half the guidance you've range point 'XX in incremental in of lower

Craig Pommells

September. in that to texture more some add we'll Yes,

the kind down the at looking the point -- -- industry headwinds 'XX. slightly to 'XX flat and a to I challenged, improvement us. roughly we're the we XXX leads and EBITDA ahead view the think of to we got all be in basis we've of in us work that we X-year looking at relative in to that still bit And will EBITDA. believe continue to of we really believe point believe level kind We're a plan, of of in

bit we -- an end still open an 'XX you open is where chapter. Now where -- ended a of

update out, So you and on call. of then next play we'll let kind the we'll this

Todd Brooks

revenue EBITDA expectation a modeling us And Can is remind just Okay. from week the the for and worth what on standpoint? XXrd a side. final the one you

Craig Pommells

Yes.

we encourage go year. talk fiscal provided the week. generally expectation for is haven't we XXrd that as the that number and And for XXXX the say XXXX, total exact to in comparing do 'XX as to our for I a impact this And guidance EBITDA would that on we that week provided. generally, use to XXrd guidance year would what about an you are and total We update is fiscal back embedded margins. I lower XXXX that point reference

Operator

Jake Next question come with Securities. will Truist from Bartlett

Jake Bartlett

kind from I wanted that build you following maintenance important it of to just more that confidence as -- heard the is a and changes the here? the big update -- big so here, the change terms announced. really just right you to go what of that, is consumers remodels in I why had increased call turnaround reinvesting of on of from the can to way and for well you question you you And that that the Great. some Anything what one the of was think in stores kind the gives share as the detail such the model.

Julie Masino

together traffic backgrounds listen also country, of choosing We and team all XXXX, did transformation putting telling of great XX% really really find talk kind guests where -- all ourselves. took to they're plan. of segments, members We kind and and we down research extensive Yes. we heard our they're the kinds all almost the And over to with and us. stock to not different us

And Cracker that was the as We there experience relevant really heard lives from at really, dinner. Barrel specifically them just digging so in the isn't important. into

us more well our We've held you and mix, dinner are sales So for we Cracker dinner the it's experience, that are there the in our When it's look relevant daypart year-over-year, for the Barrel important and up is daypart factors. told experiential on guests down. what XX% breakfast. But that -- at an at them based of choices quite us. have

And the that lighting, we lot look in experience paint, the menu other needed really well comfort work looking of the as to is of that parts the store on transformation the needed all a The of as relevance. the out the research things. agenda, right? at those came some also So of that tables, our at

So lots of data is behind that.

Jake, X well feedback we just only better these remodels the that I brighter, Cracker those. quick Barrel. the stores. feeling place the place people They stores boots are would a like really and some very a we're on it's to bank seeing and where tests dinner. moment. cleaner version we and lab have I that feels Barrel then into loving there like they're of And at and what just guest a as are Remember, great did tell as you, lighter, a And of fresher, much want do feeling put Cracker stores

So we believe what piece that's 'XX really very of stewards We and the and to on know taking a careful we're approach to capital. all capital track, right? the of right is deployment around disciplined want the about that we the strategy, good be this

looking we're So stores baselines. variety of XX XX levels in a a next at at this variety year. at to and, of investment testing frankly,

level very that be the that stores so So whether looking we're sweet spot of for lower that higher looking disciplined about we find well, growth the really see part of to really it put are amount money drive of versus plan to at performing for can right of versus well, investment and a that aren't in rate, that for amount stores growth the into at of return performing a we future. the capital money deployment or

Craig Pommells

And I'll with the question related your part follow up to of second maintenance.

specific specific guests general in don't comes -- that but give that feedback. you through it of feedback, Some

standards. However, we brand have

a things bit we COVID completed we audit during lots, floors and little on normal on store, in clear bit portfolio. maintenance and the go business to do was and that as such maybe parking behind we and a And -- and behind we process, and fell audited entire course So is, base us though as paints that it some what bats. in fell we every as employee items, base a we of guest --

up is our investments as it and it Does get And own view pays to think on through to that from look date? you of so over primarily Does that how it Does time fresh? you it dividends anecdotally guests, but clean? that. a our look have one really those own caught standards, came That standards up about business? through we

Jake Bartlett

help next savings the but question, big Got similar $XX and guess early that My it. is know if Great. my on cost you're helpful. the a stages I you million. That's you some -- provided, us understand $XX could targets million question buckets. maybe to I

the maybe door You've a more a big to just of have -- cooking, process the are a give think going lack savings you maybe be in little scratch you've majority, talked less the the some bit -- where from? But mean, food about word. a of these that us are opportunity is coming cost buckets kind coming big just little of what for little to I more better

Craig Pommells

Yes.

effort in our kind in that ways. focuses show this operations, kind in that lot Thank more You've there labor started up win-win more other make million. the part will that in the make to and of $XX of We stages, our We're us. for early the house. of stages back the house the of the areas house. a think opportunity up $XX will think It to the show of centers a of breadth meaningful will it million answer some menu the in in the consistent. back industrial that, of work be back it of complexity efficient, And you. of early there's on simplify but A the around we engineering given

P&L. And quite been addition full then program we ongoing across an to successful generate have the that over the in that, savings that's will years

has that's challenge that brought in this to this has for is Jake, Candidly, we which to some of have other program think skew up So an Julie of had itself time. it been, think I traffic. issue decline issue, to towards a over relevant overlay which manifests component programs is that. we've challenge you then the And back in house, a going know. while, been The the will the labor as the these

then the $XX then an So traffic And is saving that million significantly, $XX million. that as erodes example. down

together. grow coming a starting of stabilizing traffic to allows to savings cost flow things ultimately through we that and these these greater We're then to efforts degree. So both have the

Jake Bartlett

year Okay. point, cuts $XX I reinvested. to you some And was the in just just -- -- that past the $XX that to was million, there but guess million had cost being

want $XX million wasn't through million to margins. $XX flowing wasn't you kind going margins. I it to clear through to of sure So that to make -- the we're save, expect the really to that flow to just that's

of else You to kind real reinvesting margin it of a that -- something saver not through? that kind that flow expect essentially kind would is be a so net in of allow to this

Craig Pommells

to Yes. point The basis $XX embedded in million improvement. $XX XXX million the is

So over X-year it's of a the part that improvement window.

Operator

come with Mullan will Sandler. question Piper Next Brian from

Brian Mullan

a Julie, there's place? you a history Can Maybe That mentioned a important how been times bit that before give was, trying to it's a go. the could was years progress. of of seems remarks. that in sense just something an to of give ago sense seat-to-eat that it in better assuming far recent the us being joined? like tracked you was some you then get you have when you called nice of just stands And a to KPI. prepared hear couple business a where Just versus might little

Julie Masino

Thanks question. Brian. the Sure, for

metrics what did looking at and One early that of focus could matter. in on call I do the we improve to where really dissecting we ourselves find things business was the what we

X at looked and we -- we remarks. different I at that, sales control came And so what about today into I we highest XX even in these that metrics are in dug XX have the impact lot did we we or prepared And of -- ops like when can the that the on a on metrics when really landed same-store that growth. correlation looked the we don't in stores know, talked specifically

Guest a value. that rating. little Star calculation Google measuring is The of It's our guest it's satisfaction. everything that things for one But to satisfaction. guests. a bit we're into of first with like service all one because lot roll loaded is from up in those things really a level of the satisfaction guest There's

seat I talked also one. about metric number to we and that's two, so another to And precheck. called Number have seat eat,

long of made less greeted they big So to to properly and to cold does the that's to eat, quickly seat average hour. you food make great. that we really which wonderful spends one they that how than people When want eat, recipe, come their to in you for food Cracker which basically that by because take really with your a is sure made how so The are That's came out. really, we why the reasonable food is Barrel, then is want are hot cold we've to is get is not little about hot, us a is to time them somebody meaningful. amount food but actually time, our improved think an time X%, it

other things life, on your your food also you a but that's know going metric and you your in So want to. getting have getting faster key of on way. We to we part be

a key one. So was that

every tenure the our when of shout on our -- The missing every partners and we're focused because in are of use guests really our restaurants every starts guest this Remember, business on so also looking today these improvement We will delivering team experience role love ones and out, and day to field to about, leaders opportunity to growing day out off-premise we're the to going there really because were the care on team. love. drives in what all the the are sales. an in that to they huge focused the what our in and efforts of other guests item believe that matter and pay love and we're talked those guests pay showing making execution and I imperatives. The dividends really that that guests are scores, in, then turnover, of X But these our dividend. same-store my guests that single and all long will ops relevancy, a day really profitability food wonderful. experience It's these part it which food are I'll just dividends that at taking term

So the for thanks question.

Brian Mullan

Okay. on follow-up And the business. a then off-premise question just

it. a this you in channels just with? few a be you're is that and that you which I curious Where serve to about that, were that call well, business make can expect make if understood, lower as And And I think viewing on you part talked But think happy any I'm us ago. are do margin related the to does to remind you strategic You now? Which how right. weeks a is bit some might if to changes? of impact heat if business, changes have just percentage the but operations -- this business

Julie Masino

a Yes, in on of got a us. it channel stuff going Brian, it's it's for really because interesting lot

in to and delivery we go it X put them So staff and third-party different. those really And businesses, break way across business. that the our and today, think all in put occasion way the when different there put actually, the off-premise are that we our you catering kind interacts guest with in of individuals about down really is in of

really it's to to order part to coming myriad and taking experience. is They're a third-party on have our ways, to channel, the operations. it. get our that in that it of in, it can coming impact go. of happen question, important, catering grabbing all They're last through does even then else And which in-store of that they're not individual The somebody placing but your

of restaurants. happening got we've that's our to everything just food make in this alongside So

disproportionate same the of last different realized business. a on pressure of all in running businesses at of amount QX time. we're some that kind was year What of putting we're these we the mainly of dine-in So businesses couple

not that amount against in all really it, for little what energy We of the realized as we be our guest as orders other costs, like literally bit and because think been it's profitable party people. something like was we that that, it dine-in growing a at of business about is it and grow. focusing have could a channels feeding celebrating or put to have hurting on satisfaction XXX -- we're catering grow, warehouses grow, like And

satisfaction. impacting our and seat-to-eat just are of distraction, this kitchen, the really together, putting and are feeding to guests little was that's and I've that So a restaurant it same the in guest important times things can a these said the the order bit be kitchen it

to So of our about things dine-in them business, really to that prepared we why within businesses really talked remarks that against excellence on make of priority rightsize is make X because sure that's is that item these been I part of off-premise key about how which well. profitable. doing them execute this, with the we our X one missing more pillar has our and focusing business in that were my to because

orders. industry item Our was rate third-party delivery for missing those high the in

executing right of all important we that that really off-premise channel across getting future. within excellence so are businesses as X for with these And really, the grow

Operator

Next question Tower with Citigroup. Jon from will come

Jon Tower

kind system the seeing on of the the your pricing a Just year running I opportunities bigger the it And is some you're on maybe same couple than that you opportunity labor in call view markets. but stores context you're informs across on the different how way you're the deflation store-by-store there. consumer, sharper out XXXX that given talked still thinking basis I pricing looking side. that rather backdrop inflation about time, in think system. that at curious, ago, on the for across X% a to for the the the is was update little pricing hoping about a the perhaps bit given regional this commodity at Obviously, of strategic of get weeks

Julie Masino

early in they're Look, strategic having is one the really that recognizable price. that's on out but consumers we an Jon. way us opportunity something it's also apply that be for there. more to other Thanks, Price of experiences comparable and that we is lever, the powerful for there's to things identified a actually

of XX% tier in and used call our through. really X And making -- us is -- today, better weeks $XX,XXX an there been has success in average $XX,XXX a use we that refine it. competitive example how household think household stores, example about that I So talked and we the where literally for to that different tier. to each thinking maniacal are the for store store up pay about the take that those there's average on us have tier, of price while value flows ago it's a that we different protect stores opportunity sure provides sets sets way of we've a that better as we our and a powerful as willingness an pretty that around year. a because year income and income a pricing there's I where the We is in

So we're doing that work.

in We're strategically Now taken ago, testing remarks different been different we've tests ago taking talked price around weeks the weeks We've call tiers prepared and a learning -- menu. we've few across is of that where several price, flowing quite we've now. the got got most X a across In items as that, on test X% the of about right things. we more and running through. X these

in goals the have out approach apply pricing of multiyear lay And map together to that's this really was then opportunity we might our could and doing. putting where understand that choicefully where road moves plan. we strategic to be and pricing that One to we're a what

got know know value, So laying all we the we've actually actually consumer pressures we're of a the feel map right we're not how what other it and applying while road today, we the there, given given of QX is of in into thing the out making out we we're for about moves given 'XX, that all we menu. get opportunity when

Craig to X let the can a we we maybe. some plan. next some So kind have price. over nice of of thoughts the as now we to believe with map add quarter-by-quarter around that ability move really take road need we years I'll

Craig Pommells

the the big I earlier the is early Sunrise the what around reemphasize early put value in in around think to points issue, Jon, just anchor in we Julie the the And $X.XX. of only industry. kind issue and identified it's this said Julie thing place really at would that, these process. at I breakfast add starting is dine

those advertisable So across points are dayparts. price have anchors. we multiple Those

top sharp foundation there points. with this communicatable pricing it very but on out keeps so price work will of that And that, a layer

Jon Tower

it. Got

related vein. kind And similar Okay. of

You've seen nice commodity deflation this most recent quarter.

key I we're some a or category. the for rise starting to the But think roughly restaurant indices space, the for you're the for looking implying the the inputs balance of flat. at of of suggesting year, the are across -- full lot that year

that the I ones you or to have exposure taken of think some higher.

so? you So over be coming aware costs we about next months rates? be of reset might or Are thinking there at up food that how to are should different have any for might the contracts XX renewal that

Craig Pommells

Jon, is you shifting we'll that a it's dynamic is the meaningful The think insight talk -- bit. don't a Craig September. more I about it again. there underlying have I mean, in

So September we'll on more call. color provide the

Jon Tower

Okay. And just maybe then last one.

you respect You that's a do XXXX. you're Can with convertible in due? comes think how insights you it's any have I what when might due thinking provide handle that it to June of on

Craig Pommells

news decision revolver, of is -- a our the in level. to of and understand that a that -- starting continued room reasonable is our ensure we to ahead our on one we work the we're We're good actually and there lot Yes. best well understand what that one, have on options, We've at big our is a keep capacity leverage large a revolver. we to all

that. look gives to to us as options a that So as lot refinance look of we we

it the facts time. on the a look about So we'll date, of at on of ahead as at and decision that make We're we'll due to future. based well in share the the kind the starting ground more

Operator

Griffin come of question Katherine Bank Next from will America. with

Katherine Griffin

modeling X then a questions follow-up. had and I

what kind So your cost here? you specifically we should cost And of of commodities the just largest as run protein. about if G&A in the expectations. the remind second from like it first, Can maybe just is I to are -- me some basket of think right XQ the could again components of about rate is how XQ then relates like kind ask

Craig Pommells

many is a good I'll Cracker basket. groups The got with news that is one. Craig. we've diversified Barrel it's pretty take Katherine, the one of

are the vegetables larger it actually is well relates to and we major the of pretty is well we've group as split and across pretty Poultry diversified -- got one categories it then largest commodities. beef and the relates roots so So ones. pork, as

all as do of continuing G&A pick in bit in Then little QX. we G&A bit as will expect we in get into that and in we to all then move work QX where business be and it versus may fiscal was invest terms to And going the 'XX, higher up of growth G&A, of this are well again. this a because reenergize a

Katherine Griffin

how have additional of -- with that then, remodel of Got labor you tech technology plans. prioritizing how about, guess, investments I and Makes to may that or that think some of is it. And food that of engineering those the better Since I'm replace ago. you I investments. I to fruit. of a curious bearing a But into on maybe and the Julie, the Are you are I would wanted are technology investments there the systems where weeks some kind plans looking -- have couple for tech some like the couple stack you about today. align of for question some years, of last understand been sense. stack spoke think elements industrial

guess, seat terms to software made like metrics increase technology some additional of there that to these things I to of in how get investments a sense, talked trying it's changes reservation be even of incremental is whether that turnover? whether or about, you or Just some with it's be of could the eat improvement the could

Julie Masino

worked stack investments. that that around loyalty we know question. we're AOP the 'XX we our that for ability road evaluating it we beyond. making can and into thanks X-year really that have part for to Katherine, still the refine program the that the sure process What tech build that would Yes, ramping that would the is near-term to ones tell the some knowing we transformation to program a make it and the we're agenda, We and are built map I to at industry-leading continuing tech as go strategic that has and plan we and Look, of and team looking you as monetize need the are be. make

those things CRM, personalization, didn't those are have at. So looking the today, things we're around those closer we things near-term and -- CDP, that in around are

is retail remember, are business the also business some bit and We our of always technology. there. we've got and behind business a tech a at and restaurant little POS And looking a investments in kind retail of

next X So some map on our tech years. are road the of those over

sequence So a X-year what about work that as that making more that, might road 'XX but on. we we September have teams we'll and in the map have that we this working call 'XX, the in at can sure everything with can in pace absorb 'XX, like we else know get work that we way field can done, and that guidance look actually going give look or more on against the specific you can be we and 'XX a that

investments, we some of perspective So absorption the about perspective. from how also from investment we're being really really, these the but sequence only not pace and mindful

Operator

Geiger Next UBS. question from Dennis with will come

Dennis Geiger

can you Wondering I if related on, to business. there's share monthly retail that anything just I more the the to spoke comments improvement the that you it, which think sequential think, around

if commenting to on the So more the I anything of there driving if don't that if on kind if that And restaurant what specifically, then was improvement? were you on share but quarter. there anything sequential is an it's underlying know through trajectory trends

Julie Masino

Yes.

I out, way a -- catch the have bit I well. has of you have a for the have talks but performing bit. is comp little the in it some discretionary. your there. we assortments don't to most advice sales been a year be improvement mean so store you or challenged lots for Country really we monthly that's store last retail love of been been we'd so. But tends by it been think of know, in by lot as discretionary, Cracker this performance things up what and driven things to It's sequential that theme The A need encouraged of quite Craig probably pick you lots Barrel will right? about Our performance, that

the and product. unique, so on that a are job does such great team We

with And some of those really theme been assortments have resonating people.

have and gift a resonating by with great also items value some that The in thing we you really swing guests. because if other is need that is store

does good things low-income with of both So our that price the in mix lot there, in going macros everything the and the that in things being There's come on given really have at Again, well. value value that's points. there that lots around press are consumers. team that's that's out put really that markdown, sharp of we working a and on important

levels shout to I a margins. to because managing growing and team want give job inventory wonderful that Finally, done out a they've

headwinds are had up. traffic we've margins level so that lower while is levels some the So and conversion, retail down, inventory to same-store are sales up and inventory our a on

it us. to be nice a continues So business for

Dennis Geiger

Appreciate that, Julie.

what about your Just quarter, on observations expectations the it's in talk you done about to for loyalty, program the anything more the perhaps? forward, from that how program, maybe -- then, for that think and to you maybe helps going

Craig Pommells

can maybe Sure. with and one that give I'll more. Julie some start

We program. and neighborhood point, are in member is We're at huge. really excited the X about is loyalty which the million this which --

do. more it information a to so early, that what's about turn bit little us share give program. work to in what terms that. But next I'll more and there's we're it's on the actually, we're to Julie about going of about So still to over coming excited

Julie Masino

Yes. for question. Thanks the

excited this about are We program.

we're are us. It's and where talk pillars guests a ago. this to in deliver call also we heard key what about a were today we our interact we doing. first because from us It's me it for an very to It's anchor You've program great X weeks a how value. want for to where with very believe is way

days to us a it's are in the guests helps that last program great still September We a seeking from really who early is This just us. this right? that, forget of But year. program. don't So deliver value launched reminder, of it value

key even actually our it you about understand little spend planning bit to anniversary. to some a we're September the levers do at on What time how the we're in digging beyond, in how not plan. call, our we're is we're more thinking using So and deeper, and program 'XX drive helping X-year in

continue we guests. deliver be way optimistic it. And super to it's about think the also remember, come key our to more value to a So call important for to I us that September in it's know to

Dennis Geiger

or concrete about longer-term whatever as exactly. other that? too front, as me, juncture? Makes is the there is significantly I to Anything it Craig, Or D&A up I sense. far the to the one for -- on Last could. early there early more still than, comment think, this if think still how too at

Craig Pommells

Then amortization depreciation G&A. confirm, you it's just and or to said

Dennis Geiger

D&A.

Craig Pommells

administrative? and General

Dennis Geiger

sorry, No, depreciation, sorry.

Craig Pommells

depreciation clearly is a Got of going Yes. to to bit Yes. Okay. seeing our reinvigorate we're increasing. be the fair it. spending go We're capital up. capital Well, spend and business,

going net be increased that income as So think an forward. you about expense EPS will or

up. can ramp to start ramp see this year, of will Even a up. that So bit you

as a well. of bit a see next up year You'll ramp

through shared the specifically the Now deferred up. get will side of we this earlier us that spend strategy of call, maintenance window, kind as we're on going X-year caught the on

part, that it's So that an drive depreciation, long-term for have to capital around that. a topic. that's to longer on. a will is And caught drive up a I go model address. which the have part back and some think get something capital that It's bit spend a we than will investment But of a be it issue spend will we long-term not don't the business is X-year forever and that

to Now degree and things have depreciation the increase we that and capital capital spending as our may in the will other returns, we make drive that compelling future. investments, those

creating, we're prototype, it and will develop have be For higher growing new value the amortization. but example, and term, able depreciation we a to again will start as longer over that

term, in about up we by think is the we're be would near depreciation XXX short the EBITDA points. way about certainly overall model, think it we is going answer most the to the But will basis amortization the business So longer level improve and term.

Operator

come question from Wolf with will Andrew The next King. CL

Andrew Paul Wolf

you metrics meaningfully? key think think guest related on can plan? give obviously, maybe -- we it What is cumulative guest does What guest improve? traffic traffic is sales internal us kind focusing sense you're is same-store of sure that, can and you to when start blend so -- I'm Could it to us or X lead so them experience a your the it's just is on at sharing and the time based really and to And for but group. your how with Julie, might move either lead the to a that indicators start start here? traffic. you as least needle, is about all what inning inning together in forth,

Julie Masino

question. the traffic like in for thanks Andrew, is Yes, equation. value multi-varied a Performance

ops that performance driver of our it. execute So We there's a go and into is things know to that metrics our a and lot key ability of our that.

to Another right? relevant. the food in, X upper ability plan, and is imperatives guests We've experience we and our have of When think that then key food about are we that relevancy is and an making of and that guests have imperatives reignite awareness the you the crave driver to have love. to funnel guests really why X that right? drive and It's and drive got sure really

So where you are of flywheel of momentum the together traffic, worked would along the it than further I marketing we are in of say if metrics terms to of we kind fuel will, ops in pieces. the

past, that of about the learn tests We and test of way some that. our some in the local. to in all of we've continue talked I've through done

through learning traffic. We're these things things We're NASCAR, that. with to like college driving that football, key like find testing different resonate

going of 'XX All there. get why get back to our kind you there in can half see of continue actually we're these these things cumulatively, because investing continue better in performance the That's to in we'll that get so in 'XX. we

on team also come a is which to We're to note. it, in our seeing metrics and on improvements commenting us there. the thing but that, more focused key it in -- are the the know for is So on that guests

Andrew Paul Wolf

sort foundational the -- really than improve believe that and to things And is going sense are stats. concert foundational traffic brand the identity where able to obviously, could time-wise operational? you Okay. And the Where operation in you give to be the qualitative up, a us metrics of that of aspect with operation business brought even and is? of drive you you food -- do quality more

Julie Masino

feedback coming guests they absolutely, And relevancy they why around of short the answer. menu the a again, really about on where just plan strategic talk a brand, a and was those transformation of coming, to lot the lot the that, are is did agenda. we all were We to the we of of Yes, things. of underpin research, why lot and the of weren't the

are into we on the down, it, working peering all getting actively working on innovation. menu, So that

early things in test test, you'll of the X As that's that lot I starting we've test to yet. see and about that we about this had mentioned talked ago, we're talking hit as on hit now we've that call menu weeks We that. Texas summer items the some our in got a as this those I right expanded resonating innovation fall. even with

that being to So can do same right things all working we time is in, the these of in drive that's relevant relevant at more The more being thing. that will most food, they're right. said important and -- the things back do, the believe the which and the experience are the research with what things we with that to we're the to them guests

Operator

Ms. session. concludes over This go question-and-answer I ahead. Julie back for closing remarks. the like any to would Please conference our Masino turn to

Julie Masino

focused through love our pillars. us joining driving experience Thank all growing relevancy, X guests food you on remain and execution and profitability the of for We intently today. to delivering

our to day in and we for work Their and earnings with taking hard for day we excellence as and your look transformation, of forward every and dedication transform focused to our on managing that are next you I and gives on long-term out. our brand confidence be Thank want and team executing simultaneously call. updating day. and business to our our care shift to every their successful day-to-day it guests excellence we thank our position business our execute we we on further will leaders As life our at members growth. operational interest, commitment bringing me for progress you

Operator

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

may now You disconnect.

Cracker Barrel Old Country Store (CBRL) 30 May 242024 Q3 Earnings call transcript