- Total Revenue: $894.4 million, up 6.9% from the prior year quarter.
- Restaurant Revenues: $731.3 million.
- Retail Revenues: $163.1 million.
- Comparable Store Restaurant Sales: Increased 0.4% over the prior year.
- Off-Premise Sales: Approximately 17.2% of restaurant sales.
- Comparable Store Retail Sales: Decreased 4.2% compared to the prior year quarter.
- Cost of Goods Sold: 30.4% of total revenue, down from 30.8% in the prior year quarter.
- Restaurant Cost of Goods Sold: 26% of restaurant sales, down from 26.6% in the prior year quarter.
- Retail Cost of Goods Sold: 50.1% of retail sales, up from 48.8% in the prior year quarter.
- Labor and Related Expenses: 37.5% of revenue, up from 36.5% in the prior year quarter.
- Other Operating Expenses: 23.9% of revenue, up from 23.3% in the prior year quarter.
- Adjusted General and Administrative Expenses: 5.2% of revenue, up from 4.5% in the prior year quarter.
- Net Interest Expense: $5.7 million, up from $4.5 million in the prior year quarter.
- GAAP Earnings Per Diluted Share: $0.81.
- Adjusted Earnings Per Diluted Share: $0.98.
- Adjusted EBITDA: $57.4 million, or 6.4% of total revenue.
- Capital Expenditures: $47.4 million in the fourth quarter.
- Dividends Returned to Shareholders: $28.9 million in the fourth quarter.
- Total Debt: $476.7 million at quarter-end.
- Quarterly Dividend: $0.25 per share, payable on November 13, 2024.
- Fiscal 2025 Revenue Guidance: $3.4 billion to $3.5 billion.
- Fiscal 2025 Adjusted EBITDA Guidance: $200 million to $215 million.
- Fiscal 2025 Capital Expenditures Guidance: $160 million to $180 million.
Release Date: September 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cracker Barrel Old Country Store Inc (CBRL, Financial) reported total revenue of $894.4 million, up 6.9% from the prior year quarter.
- The company's loyalty program has reached 6 million users within a year, driving incremental sales and traffic.
- New menu items and optimized pricing initiatives are resonating well with guests, contributing to strong value perception scores.
- Remodeled pilot stores are showing increased traffic and sales, indicating positive guest reception.
- Operational metrics such as hourly turnover and guest satisfaction scores have shown significant improvement.
Negative Points
- Comparable store retail sales decreased by 4.2% compared to the prior year, with declines across most categories.
- Labor and related expenses increased to 37.5% of revenue, driven by investments in additional labor hours and wage inflation.
- Retail cost of goods sold increased by 130 basis points due to discounts and markdowns.
- The company anticipates elevated general and administrative expenses in fiscal 2025 due to strategic transformation investments.
- Net interest expense increased to $5.7 million from $4.5 million in the prior year quarter, primarily due to higher interest rates and debt levels.
Q & A Highlights
Highlights from Cracker Barrel Old Country Store Inc (CBRL) Q4 2024 Earnings Call
Q: Can you elaborate on the differences between the high, medium, low, and new refresh remodel options?
A: Craig Pommells, CFO & SVP: The refresh option includes paint and decor at a lower cost. The low option adds furniture and lighting. The medium option includes flooring work, and the high option involves extensive flooring and other elements. Fiscal '25 will focus on testing these options to determine the best approach.
Q: How are you thinking about menu pricing for fiscal '25?
A: Craig Pommells, CFO & SVP: We have 5% pricing for the year in the guidance, which blends all pricing adjustments, including both increases and decreases.
Q: What customer trends did you observe in Q4, and how is the loyalty program performing?
A: Julie Masino, President, CEO, & Director: We saw a slight uptick in the 65-plus age group and a decline in spending among the under $60,000 income cohort. The loyalty program has 6 million members, who visit 50% more often and have a 10% higher average check than non-members.
Q: Can you provide more details on the cost savings initiatives and G&A expenses for fiscal '25?
A: Craig Pommells, CFO & SVP: We are aligned with the $50 million to $60 million cost savings target over three years. Fiscal '25 is an investment year, so G&A expenses will be elevated, but we expect normalization as financial results improve in the second half of fiscal '26 and into fiscal '27.
Q: How are you balancing taking more pricing with maintaining value scores?
A: Julie Masino, President, CEO, & Director: We focus on quality and portion sizes to maintain value. Our barbell pricing strategy includes low entry price points like the Sunrise Pancake special and higher-end items like upgraded steaks. We monitor value scores closely to ensure we uphold our value proposition.
Q: What are the recent trends in same-store sales, and how do they inform your fiscal '25 guidance?
A: Craig Pommells, CFO & SVP: Our guidance contemplates current trends and a challenging backdrop. We are encouraged by the momentum in various metrics, including operations, guest satisfaction, and loyalty, but we recognize the challenging environment.
Q: How does the 5% menu pricing impact traffic, and what gives you confidence in this strategy?
A: Julie Masino, President, CEO, & Director: Testing since March shows that price increases have not significantly impacted traffic. Our competitive analysis indicates we are priced 8% to 12% below competitors, giving us room to take price without affecting traffic adversely.
Q: Can you compare the 6 million active loyalty program users to any legacy program?
A: Julie Masino, President, CEO, & Director: We did not have a legacy program. The current loyalty program launched a year ago and has shown that members visit 50% more often and spend more on retail.
Q: What is your average guest frequency today?
A: Julie Masino, President, CEO, & Director: The average guest frequency is a little under 2x a year, but loyalty members visit about 50% more often than non-members.
Q: Are there any planned store closures as part of the remodel process?
A: Craig Pommells, CFO & SVP: We regularly evaluate our store portfolio. Currently, there are no planned closures, but we will continue to assess as needed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
