Cracker Barrel Old Country Store Inc Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Brian Mullan - Piper Sandler Companies - Analyst : Hey, thank you. Just a question on the remodel plans for the current fiscal year. Can you just remind us or take us through the differences between the high to medium and the low options? And is there one of those that you are favoring at this point? Or is there a goal to set on one of those for fiscal '26 and beyond after you have the learnings? And then just separately, you mentioned a new refresh option. If I understood you right in the prepared remarks, I think that was informed by what you're seeing in the pilot stores already. So just maybe elaborate on that refresh option, what makes a store good candidate, and maybe what kind of sales uplift you're hoping to see? Thank you.

Question: Brian Mullan - Piper Sandler Companies - Analyst : Okay, thank you. And then just a follow-up question. Just when you -- understanding there's different pricing tiers and you're seeing some success moving some stores up and down, just as you put together the guidance for fiscal 2025, how are you thinking about menu pricing for the fiscal '25?

Question: Brian Mullan - Piper Sandler Companies - Analyst : Okay, thank you very much.

Question: Dennis Geiger - UBS Securities LLC - Analyst : Great. Thanks, guys. I'm wondering if you could talk a little bit about what you saw in the quarter from a customer standpoint. Any thoughts as it relates to some of those key cohorts, either age, income demographic, et cetera? And then specific to loyalty, maybe the incremental customers that you've been adding, if there's anything you could say about those, age wise, how it's skewed? Great stats, I think, on the uplift that you're seeing from the program. But maybe just who is now in the program, who you've been adding to that, if there are commonalities there.

Question: Dennis Geiger - UBS Securities LLC - Analyst : Great. Very helpful, guys. One more just on the cost savings side of things, a few to kind of put in here. Craig, on the G&A side, anything more specific to share for '25 beyond what you said already? Or is it a bit of a moving target where you want to maintain a little bit of flexibility there as it relates to that exact G&A number for '25? And related on the cost saving side of things, you talked about a few of the opportunities today. Is that $50 million to $60 million cumulative three years, is that still the same that it was, if anything has changed there, or if any kind of net commentary there? Would just be curious. Thank you.

Question: Dennis Geiger - UBS Securities LLC - Analyst : Great. Thank you very much.

Question: Katherine Griffin - BofA Securities, Inc. - Analyst : Hi, thanks for the question. Craig, I don't know if I missed it, but did you provide a breakdown of traffic and mix in the quarter? And then maybe you can also help us just understand the pricing cadence of the year in terms of when you took pricing in the quarter. Just assuming they're trying to get a picture, I guess, of the full-year pricing at 5% you guided to and how much that implies for carryforward.

Question: Katherine Griffin - BofA Securities, Inc. - Analyst : Okay, thank you. And then I think something that the brand is known for is value. I imagine that's -- it's most appealing in the loyalty program and in your messaging. So I wanted to understand how you're thinking about balancing, taking some more pricing with maintaining those value scores. I think just given that casual dining has relatively low frequency, what gives you confidence that you can maintain those, I don't know if they're rising value scores, against higher pricing? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 19, 2024 / 3:00PM, CBRL.OQ - Q4 2024 Cracker Barrel Old Country Store Inc Earnings Call

Question: Katherine Griffin - BofA Securities, Inc. - Analyst : Great. Thanks, Julie.

Question: Jake Bartlett - Truist Securities - Analyst : Great. Thank you so much for taking the questions. Mine was just on the same-store sales guidance, the implied guidance in '25, and how that might be informed by more recent trends. I believe maybe, Craig, if you can just confirm that you're looking at positive low single digits same-store sales for the year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 19, 2024 / 3:00PM, CBRL.OQ - Q4 2024 Cracker Barrel Old Country Store Inc Earnings Call We heard earlier today from another company that industry sales had been -- had improved in August and then into September. It looks to me like Cracker Barrel has likely seen the same, if you could just confirm that. And then if that is true, if you're seeing an improvement, do you attribute it to industry trends, or do you think some of your initiatives are really starting to kind of -- to bear fruit already?

Question: Jake Bartlett - Truist Securities - Analyst : Okay. And on the 5% menu pricing, at the surface, it's obviously a big number in a challenging environment that you just mentioned. Can you try to disaggregate how much of that is driven by the tiers, the changing of -- moving the net restaurants to a higher tier versus like-for-like menu pricing at a given store? Probably hard to disaggregate, but I think the answer there would help us feel a little more confident that traffic is not going to be materially impacted by a 5% price increase.

Question: Jake Bartlett - Truist Securities - Analyst : Thanks. I appreciate it.

Question: Andrew Wolf - C.L. King & Associates, Inc. - Analyst : Thank you. Good morning. I wanted to follow up on the loyalty program. And first, could you just compare that 6 million active users to the legacy program? And assuming it's up somewhat or a lot, can you discern whether that's existing customers who you converted, or is it like net new customers to Cracker Barrel?

Question: Andrew Wolf - C.L. King & Associates, Inc. - Analyst : Okay. I thought there was like a [PEGS] program that was sort of manual, but I'll just move on. Can you kind of discuss what the -- or what the '27 goal is in terms of penetration if you're at 25% of transactions now? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 19, 2024 / 3:00PM, CBRL.OQ - Q4 2024 Cracker Barrel Old Country Store Inc Earnings Call

Question: Andrew Wolf - C.L. King & Associates, Inc. - Analyst : Yes.

Question: Andrew Wolf - C.L. King & Associates, Inc. - Analyst : Got it. Okay. The last thing, I just wanted to ask about the quarter. I think it's a travel-heavy quarter. Was the comp -- same-store sales improvement as you go between measuring between folks who traveled and local people who live around the store around the restaurant, are you able to discern which cohort cut that way, you saw more improvement in?

Question: Andrew Wolf - C.L. King & Associates, Inc. - Analyst : Got it. All right, thank you.

Question: Jon Tower - Citigroup Inc. - Analyst : Great. Thanks for taking the questions. Maybe first off, just a clarification. The pricing action that you took, did that start in August or something that's hit a little bit later?

Question: Jon Tower - Citigroup Inc. - Analyst : Okay, so some -- what's -- I guess, the 5% was included in the August number, quarter-to-date number.

Question: Jon Tower - Citigroup Inc. - Analyst : Okay, great. And then maybe just going to the advertising piece of the business, I know 2024 the company stepped up spend there. And I'm just kind of curious, given all the transition that the company's going through right now when looking at fiscal '25, do you anticipate another step-up in spend? And specifically, where do you see yourselves putting that money? Will it be focused more around value still as that's imperative to the core customers today? Or do you see it focused on some of these new menu items that you're talking about that have an attractive price point but might be a little bit more premium to the everyday value?

Question: Jon Tower - Citigroup Inc. - Analyst : Got it. And then maybe as you're going through the remodel process, I know you had some store closures last year, have you found perhaps there's more opportunity to clean up the portfolio with respect to incremental store closures? Are you pretty happy with where you sit today?

Question: Jon Tower - Citigroup Inc. - Analyst : Got it. And then just last one for me. I should have asked this earlier. What's your average guest frequency today?

Question: Jon Tower - Citigroup Inc. - Analyst : Got it. Thanks for taking the questions.