CRACKER BARREL OLD COUNTRY STORE, INC Q4 FY2024 earnings call

• Brand Refinement: Partnered with a top agency for brand research, hired Sarah Moore as CMO, and celebrated 55th birthday with Deion Sanders digital messaging and rewards member offers.
• Menu Enhancement: Introduced new menu items, implemented barbell pricing strategy, optimized back-of-house efficiencies, and saw strong flow through from pricing changes.
• Guest Experience: Improved operational metrics (hourly turnover, CPE time, etc.), invested in store maintenance and remodel program with pilot stores showing traffic/sales growth, and optimized retail assortments.
• Digital and Off-Premise: Cracker Barrel Rewards has 6 million users, with members visiting more often, higher average checks, and stronger retail spend; tested member-exclusive campaigns.
• Employee Experience: Focused on staffing, retention, new HCM system, and manager support to improve job simplification and training.

Total revenue was $894.4 million, up 6.9% from the prior year quarter. Restaurant revenues were $731.3 million, with comparable store restaurant sales increasing 0.4% and off-premise sales at approximately 17.2% of restaurant sales. Retail revenues were $163.1 million, with comparable store retail sales decreasing 4.2% compared to the prior year quarter. Restaurant cost of goods sold was 26% of restaurant sales, down 60 basis points from prior year, driven by menu pricing. Retail cost of goods sold was 50.1% of retail sales, up 130 basis points due to discounts and markdowns.

For fiscal 2025, expect total revenue $3.4B-$3.5B, pricing ~5%, open 2 new Cracker Barrel stores and 3-4 new Maple Street units, commodity inflation 2%-3%, hourly restaurant wage inflation 3%-4%. Anticipate adjusted EBITDA $200M-$215M, capital expenditures $160M-$180M. GAAP effective tax rate negative 7%-11%, adjusted effective tax rate 0%-negative 4%.

Risks and uncertainties beyond management's control that could affect actual results differing from expectations, as detailed in press release and SEC filings.

Q: Remodel plans differences and refresh option details A: Craig Pommells explained high, medium, low, and refresh options, with fiscal 2025 focused on testing.

Q: Customer demographics and loyalty program A: Julie Masino noted slight uptick in 65+ group, loyalty program has 6M users with higher visit frequency and checks.

Q: Menu pricing disaggregation and traffic impact A: Julie and Craig discussed barbell pricing, value offerings, and positive flow through from pricing with loyalty program support.

Q: Loyalty program penetration and comp sales A: Julie and Craig talked about 25% transaction penetration, ongoing testing, and comp sales influenced by multiple factors including challenging backdrop.

Q: Advertising spend and store portfolio A: Julie Masino said no planned step-up in marketing spend, and they continue to evaluate store portfolio.

Q: Guest frequency and loyalty program A: Julie Masino mentioned average guest frequency under 2 times a year, but loyalty members visit 50% more often.