Full Transcript: Cracker Barrel Old Q4 2026 Earnings Call

Cracker Barrel Old (NASDAQ: CBRL ) reported fourth-quarter financial results on Wednesday. The transcript from the company's fourth-quarter earnings call has been provided below. This content is powered APIs. 8 million.

2% due to pricing initiatives. 4% year-over-year, benefiting from a $15 million tariff refund and legal settlements. The company is focusing on strategic priorities including enhancing food quality, improving guest experience, and investing in employee engagement and retention. 4 billion with a comparable store sales growth of 3% to 5%, and adjusted EBITDA of $180 million to $200 million.

No new stores will be opened in fiscal 2027, with guidance assuming a 3% pricing increase to offset inflation. 3 million in available capacity. 5 million members, for increased traffic and sales. Management emphasized ongoing investments in technology and marketing to drive profitability and operational efficiencies.

CEO Dave Dino highlighted the focus on food, guest experience, and people as critical for the company's future growth and success. Full Transcript OPERATOR Good day and welcome to the Cracker Barrel Old fiscal 2026 fourth quarter conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded.

I would now like to turn the conference over to Adam Hannon, Director of Investor Relations. Please go ahead. Adam Hannon, Director of Investor Relations Thank you. Welcome to Cracker Barrel Old's fourth quarter fiscal 2026 conference call and webcast.

Earlier today we issued a press release announcing our fourth quarter results. In this press release and on this call, we will refer to non-GAAP financial measures such as adjusted EBITDA for the fourth quarter ended July 31, 2026. Please refer to the footnotes in our press release for further details about these metrics. The Company believes these measures provide investors with an enhanced understanding of the Company's financial performance.

This information is not intended to be considered in isolation or as a substitute for net income or earnings per share information prepared in accordance with GAAP. The last pages of the press release include reconciliations from the non-GAAP information to the GAAP financials. On the call with me are Cracker Barrel Old's President and CEO Dave Dino and Senior Vice President and CFO Craig Pommells. Dave and Craig will provide a review of the business, financials and outlook.

We will then open up the call for questions. On this call, statements may be made by management of their beliefs and expectations regarding the Company's future operating results or expected future events. These are known as forward-looking statements, which involve risks and uncertainties that in many cases are beyond management's control and may cause actual results to differ materially from expectations. We caution our listeners and readers in considering forward-looking statements and information.

Many of the factors that could affect results are summarized in the cautionary description of risks and uncertainties found at the end of the press release and are described in detail in our reports that we file with or furnish to the SEC. Finally, the information shared on this call is valid as of today's date and the Company undertakes no obligation to update it except as may be required under applicable law. I'll now turn the call over to Cracker Barrel Old's President and CEO Dave Dino. Dave Dino, President and CEO Good morning everyone and thank you for joining us.

As many of you know, I stepped into the CEO role about six weeks ago, having spent several decades working in the industry. I have long admired this iconic brand and am excited about the opportunity ahead of us given my brief tenure at the company. Today's remarks will focus on early observations and priorities. Over the past few weeks, I spent the vast majority of my time meeting with team members, visiting stores and speaking with our guests.

I've also tried to get a deeper understanding of the brand, our current strategy and recent performance. A few things are already very clear to me. First, Cracker Barrel Old is on the right track. Second, we are a highly differentiated brand with tremendous potential.

Third, we have a passionate guest base, among the most passionate I've seen. Fourth, our people are critical to our success. They are the foundation for our hospitality and the connection that guests feel to our brand. We have 75,000 talented and dedicated employees who are committed to delivering exceptional guest experiences.

They are energized by our momentum and are invested in the long-term success of Cracker Barrel Old. Broadly speaking, the company is already focused on the right areas and has a strong plan, as demonstrated by the continued improvements in performance over the last several quarters. We are working to refine and further strengthen our plan, particularly as it relates to our focus on food and guests. Finally, this company has been through a difficult stretch and has come off stronger.

The team made hard calls, listened to guests and got the business back on offense. The results of the past couple of quarters speak for themselves. A big part of my management philosophy is doing fewer things better and concentrating on opportunities that can have the greatest impact. For restaurants, the formula is pretty straightforward.

You must offer great food, provide a great guest experience, and hire and retain excellent employees who deliver both. So these are the priorities that we will be focused on: food, experience and people. I'll now speak briefly about each area. Our first priority is food, more specifically, enhancing our quality while making it more craveable.

We are making investments to improve food quality. Dinner is our biggest opportunity and we plan to upgrade our chicken, hamburger and steak offerings. We also want to ensure our great food meets guest expectations for taste, temperature and quality on every visit. These changes are all about increasing guest satisfaction and not about taking out costs, and the associated investments are embedded in our guidance.

Although enhancing our dinner offerings is the priority from a daypart perspective, breakfast remains our strongest area in both food scores and traffic trends. Our menu work and marketing will capitalize on this strength even as we work to improve dinner. Guest experience is our second priority. Operationally, the company has made impressive gains across the key metrics in recent quarters.

This is thanks to the dedicated efforts of our teams in the stores, as well as our Store Support Center. In Q4, our Google star rating increased 2% year over year and remained near an all-time high. Food taste and service scores increased nearly 400 basis points and food temperature scores improved 500 basis points compared to Q4 last year. These results are very encouraging and we are confident in our ability to improve hospitality even further.

The retail shop is critically important to the Cracker Barrel Old brand. This has been one of the biggest and most pleasant surprises for me since I joined the company. The business is a real competitive advantage because we are the only full-service restaurant brand offering guests a true retail experience alongside their meal. We will make the retail experience even better for our guests.

From a product standpoint, we'll continue to offer unique, quality assortments at a strong value. From a merchandising standpoint, we're introducing targeted enhancements to improve the shopping experience. This includes simplifying our product layouts, widening aisles and improving sight lines. Another key part of the guest experience is our loyalty program, Cracker Barrel Rewards.

The strength of the program is remarkable. 5 million members that account for over 40% of TRAC sales. This is a differentiator that we will continue to leverage. The team is continuing to improve our personalization capabilities and we recently launched a new website and app to make the experience easier and more seamless for our guests.

Turning to our final priority, our people. Cracker Barrel Old has a special culture and our team members are our greatest asset. Employee engagement and retention are critical to our plan. We continue to see favorable turnover trends in Q4: hourly turnover improved 450 basis points and manager turnover improved 85 basis points compared to the prior year.

To sustain these gains and support strong execution, we will ensure our team members are equipped with the skills and training to be successful and highly effective. Additionally, we'll be enhancing our training and development programs and tools. In closing, we have a strong and focused plan. We will accomplish our objectives by relentlessly executing against the priorities we have identified and doing fewer things much better.

Most importantly, the entire organization is aligned against our objectives: investing in and improving our food, continuing to provide outstanding service and hospitality, and creating a great work experience for our people. As a result of the strong execution of these priorities, we will meaningfully improve profitability and cash flow in fiscal 27 and set the business up for long-term success. I'll now turn over to Craig to review Q4 financials and the fiscal 27 outlook. Craig Pommells, Chief Financial Officer Thank you, Dave, and good morning everyone.

Before reviewing our results, I want to build on Dave's remarks and thank our teams. The business continues to gain traction as reflected in the improvement in our underlying traffic trend, key guest metrics and overall financial results. I'm proud of our team's work and excited about the opportunity ahead. Now turning to the fourth quarter results.

3 million. 5 million. 1%. As a reminder, in Q4 we were lapping a stronger quarter in the prior year and there was significant variability in the prior year comparisons for Q3 and Q4.

Controlling for this variability, we were pleased with the continued gradual improvement in the traffic trend, and these top-line results exceeded our expectations. 4%. Menu mix was slightly negative, but we continue to benefit from menu initiatives such as the option to upgrade to three sides. Off-premise sales were 19% of restaurant sales, an increase of approximately 100 basis points compared to the prior year driven by growth in third-party delivery.

8 million. 7%, driven by increases in the average unit selling price and units per transaction. This was partially offset by lower traffic. We were pleased with the performance of our retail business, with this quarter representing the strongest retail comp sales growth since the second quarter of fiscal '23.

We saw strength in the toys and housewares categories and we also benefited from pulling forward our Halloween assortment. Moving to profitability. 4% versus the prior year. 1 million.

Additionally, the adjusted EBITDA results include two offsetting $10 million legal settlements, one of which favorably impacts other operating expenses and another that unfavorably impacts G&A. As noted in the press release, our adjusted EBITDA results exclude CEO transition costs, expenses related to the Maple Street divestiture, and a gain from the sale-leaseback transaction. Please review the non-GAAP reconciliation tables in the press release for additional details. 5% in the prior year.

3% in the prior year. This 30 basis point decrease was primarily driven by menu pricing, partially offset by commodity inflation. 1%, driven principally by higher beef, produce, and seafood prices, partially offset by lower egg and poultry prices. 6% of retail sales and includes a benefit of approximately $15 million from tariff refunds.

6% of retail sales and increased 60 basis points compared to the prior year, primarily due to higher markdowns. 6 million in the prior year. This decrease was primarily driven by timing and retail clearance events to reduce aged inventory. 5% in the prior year.

This 100 basis point increase was primarily driven by the following: first, sales deleverage; second, the reversal of the prior year's kitchen labor initiative; and third, higher store bonuses. Wage inflation was approximately 2%. 7% of revenue and include a $10 million benefit from a legal settlement related to antitrust litigation. 9% of revenue and approximately flat to the prior year as lower advertising expenses offset higher maintenance expenses.

9% of revenue. 7 million in CEO transition expenses, which includes an unfavorable $10 million legal expense. 7% of revenue and approximately flat to the prior year. 5 million related to the Maple Street divestiture and a non-cash impairment charge of $13 million related to low-performing Cracker Barrel Old stores, three of which closed during the quarter.

7 million. These results exceeded our expectations and demonstrate our continued momentum. 7 million in the prior year. This decrease was primarily the result of a lower debt balance.

1 million. 99. Now turning to capital allocation and the balance sheet, we continue to diligently manage the company's capital resources and are pleased with the progress we have made to further strengthen the balance sheet. 625% convertible senior notes that matured and were repaid in June.

4 million below the prior year. 75% convertible senior notes due in 2030. 3 million in available capacity. 4 million.

4 billion. 5% to 3%. Taking all of the above into account, we anticipate full-year adjusted EBITDA between $180 million and $200 million. When thinking about the quarterly cadence in fiscal '27, please keep in mind that the quarterly EBITDA distribution for fiscal '26 was unusual.

The first half of fiscal '26 was meaningfully below the prior year, while the second half significantly improved and was largely in line with prior year. Regarding taxes on an adjusted basis, we anticipate a full-year tax credit of $4 million to $8 million, which reflects routine employer tax credits such as the FICA tip credit. Finally, we expect capital expenditures to be between $110 million and $125 million, comprised of approximately 65% maintenance and 35% technology and other strategic initiatives. We are not opening any new units this year.