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CRACKER BARREL OLD COUNTRY STORE, INC

CRACKER BARREL OLD COUNTRY STORE, INCCBRLEarnings & Financial Report

Nasdaq · Consumer Discretionary · Retail-Eating Places

Cracker Barrel Old Country Store, Inc., doing business as Cracker Barrel, is an American chain of restaurant and gift stores with a Southern country theme. The company's headquarters are in Lebanon, Tennessee, where Cracker Barrel was founded by Dan Evins and Tommy Lowe in 1969. The chain's early locations were positioned near Interstate Highway exits in the Southeastern and Midwestern United States, but expanded across the country during the 1990s and 2000s. As of August 10, 2023, the compan...

What changed in CRACKER BARREL OLD COUNTRY STORE, INC's 10-K — 2023 vs 2024

Top changes in CRACKER BARREL OLD COUNTRY STORE, INC's 2024 10-K

297 paragraphs added · 330 removed · 228 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

53 edited+10 added−14 removed39 unchanged
We purchase our pork through six vendors, poultry through nine vendors and beef through seven vendors.
We purchase our pork through seven vendors, poultry through nine vendors and beef through six vendors.
We believe we compete effectively and have successfully differentiated ourselves from many of our competitors in the restaurant and retail industries through a unique brand and guest experience, which offers a diversified full-service menu and a large variety of nostalgic and unique retail items. For further information regarding competition, see Item 1A.
We believe we compete effectively and have successfully differentiated ourselves from many of our competitors in the restaurant and retail industries through a unique brand and guest experience, which offers a diversified full-service menu and a large variety of nostalgic and unique retail items. For further information regarding competition, see Item 1A. Risk Factors.
Our policy is to obtain federal registration of trademarks and other intellectual property whenever possible and to pursue vigorously any infringement of our trademarks and service marks. RESEARCH AND DEVELOPMENT While research and development is important to us, these expenditures have not been material due to the nature of the restaurant and retail industries.
Our policy is to obtain federal registration of trademarks and other intellectual property whenever possible and to pursue vigorously any infringement of our trademarks and service marks. 13 Table of Contents RESEARCH AND DEVELOPMENT While research and development is important to us, these expenditures have not been material due to the nature of the restaurant and retail industries.
Lunch and dinner items include fried and grilled chicken, chicken and dumplings, chicken pot pie, meatloaf, country fried steak, pork chops, fish, country fried shrimp, steak, roast beef, ham, vegetable plates, sandwiches and a variety of salads. We also offer multi-serving takeout family meal baskets.
Lunch and dinner items include fried and grilled chicken, chicken and dumplings, chicken pot pie, meatloaf, country fried steak, pork chops, fish, country fried shrimp, steak, roast beef, ham, vegetable plates, sandwiches and salads. We also offer multi-serving takeout family meal baskets.
We have a guest-relations call center that takes comments and suggestions from guests and forwards them to operations or other management for information and follow up. We use internet and interactive voice response systems to monitor operational performance and guest satisfaction at all stores on an ongoing basis.
We have a guest-relations call center that takes comments and suggestions from guests and forwards them to operations or other management for information and follow up. 9 Table of Contents We use internet and interactive voice response systems to monitor operational performance and guest satisfaction at all stores on an ongoing basis.
Our store employees use a range of systems to manage inventory, labor, forecasting and orders for retail and restaurants. In our distribution center, we manage retail merchandise planning, purchasing, warehousing, and distribution using various retail management solutions. Our data solutions provide management with daily reports used to operate stores in a cost-effective manner.
Our store employees use a range of systems to manage inventory, labor, forecasting and orders for retail and restaurants. In our distribution center, we manage retail merchandise planning, purchasing, warehousing, and distribution using various retail management solutions. Our data solutions provide management with daily reports used to operate stores in a cost-effective manner and assist in analytics and decision-making.
As of September 13, 2023, 59 MSBC locations were open, an increase from 53 at the same time last year — all are currently leased properties in Alabama, Florida, Georgia, Kentucky, Ohio, North Carolina, South Carolina, Tennessee, Texas and Virginia. As of September 13, 2023, no locations were franchised.
As of September 13, 2024, 68 MSBC locations were open, an increase from 59 at the same time last year — all are currently leased properties in Alabama, Florida, Georgia, Kentucky, Ohio, North Carolina, South Carolina, Tennessee, Texas and Virginia. As of September 13, 2024, no MSBC locations were franchised.
We believe that we achieve high retail sales per square foot of retail selling space (approximately $523 per square foot in 2023) as compared to traditional retail stores both by offering appealing merchandise and by having a significant source of customers who are typically our restaurant guests.
We believe that we achieve high retail sales per square foot of retail selling space (approximately $515 per square foot in 2024) as compared to traditional retail stores both by offering appealing merchandise and by having a significant source of customers who are typically our restaurant guests.
Our seasonal themes are designed to create interest and excitement in our stores by providing our guests with additional choices that vary throughout the year. 6 Table of Contents Store Management : At each store, our store management typically consists of one general manager, four associate managers and one retail manager.
Our seasonal themes are designed to create interest and excitement in our stores by providing our guests with additional choices that vary throughout the year. Store Management : At each store, our store management typically consists of one general manager, three to four associate managers and one retail manager.
Chicken is the single food item within these categories that accounted for the largest share of our food purchasing expense in 2023 at approximately 5% of total food purchases. Dairy, fruits and vegetables are purchased through numerous vendors, including local vendors. Eggs are purchased through five vendors.
Boneless chicken breast is the single food item within these categories that accounted for the largest share of our food purchasing expense in 2024 at approximately 5% of total food purchases. Dairy, fruits and vegetables are purchased through numerous vendors, including local vendors. Eggs are purchased through five vendors.
The following table highlights the five food categories which accounted for the largest shares of our food purchasing expense in 2023: Percentage of Food Purchases in 2023 Poultry 14% Fruits and vegetables 14% Dairy (including eggs) 13% Beef 11% Pork 10% Each of these categories includes several individual items.
The following table highlights the five food categories which accounted for the largest shares of our food purchasing expense in 2024: ​ ​ ​ ​ ​ Percentage of ​ ​ Food Purchases ​ in 2024 Fruits and vegetables 14% Poultry 13% Dairy (including eggs) 13% Beef 13% Pork 10% ​ 8 Table of Contents Each of these categories includes several individual items.
Building, site improvement, furniture, equipment and related development costs for stores opened during 2023 averaged approximately $5,500 and pre-opening costs averaged $826 per store in 2023. Our current store prototype is approximately 8,900 square feet, including approximately 1,900 square feet of retail selling space and dining room seating for approximately 170 guests.
Building, site improvement, furniture, equipment and related development costs for stores opened during 2024 averaged approximately $5,700 and pre-opening costs averaged $835 per store in 2024. Our current store prototype is approximately 8,900 square feet, including approximately 1,900 square feet of retail selling space and dining room seating for approximately 170 guests.
These employee-led organizations provide opportunities to network, to obtain and develop leadership skills, and to inform and influence on all aspects of the Cracker Barrel brand. 9 Table of Contents Currently, there are seven Business Resource Groups in Cracker Barrel: - AMPT (“Advancing Modern Professionals for Tomorrow”): Aims to connect and empower modern professionals by promoting a community of inclusive, ambitious, and diverse members that unify through Cracker Barrel to equip our community and leaders for the future; - Be Bold: Cultivates and develops Black Leaders within the Cracker Barrel organization utilizing allyship, mentorship, and education to create a path to continued excellence as well as a vibrant and diverse community; - B-WELL: Improving the employee experience by sponsoring health and wellness activities that nurture employees’ physical, emotional, financial and intellectual wellbeing; - HOLA (“Hispanic Organization for Leadership and Advancement"): Promoting Hispanic and Latino culture through hiring, developing and retaining talent within Cracker Barrel; - LGBTQ+ Alliance: Promoting LGBTQ+ Awareness and Building Workplace Inclusion; - SERVE: Advocating for leadership and development opportunities for Veterans, fostering an environment of networking and volunteerism and focusing on recruitment, retention and advancement; and - Women’s Connect : Inspiring Women Leaders.
Currently, there are seven Business Resource Groups in Cracker Barrel: - AMPT (“Advancing Modern Professionals for Tomorrow”): Aims to connect and empower modern professionals by promoting a community of inclusive, ambitious, and diverse members that unify through Cracker Barrel to equip our community and leaders for the future; - Be Bold: Cultivates and develops Black leaders within the Cracker Barrel organization utilizing allyship, mentorship, and education to create a path to continued excellence as well as a vibrant and diverse community; - B-WELL: Improving the employee experience by sponsoring health and wellness activities that nurture employees’ physical, emotional, financial and intellectual wellbeing; - HOLA (“Hispanic Organization for Leadership and Advancement"): Promoting Hispanic and Latino culture through hiring, developing and retaining talent within Cracker Barrel; - LGBTQ+ Alliance: Promoting LGBTQ+ Awareness and Building Workplace Inclusion; - SERVE: Advocating for leadership and development opportunities for veterans, fostering an environment of networking and volunteerism and focusing on recruitment, retention and advancement; and - Women’s Connect : Inspiring women leaders.
Risk Factors. 11 Table of Contents RAW MATERIALS SOURCES AND AVAILABILITY Essential restaurant supplies and raw materials are generally available from a number of sources. Generally, we are not dependent upon single sources of supplies or raw materials. However, in our stores, certain branded items are single source products or product lines.
RAW MATERIALS SOURCES AND AVAILABILITY Essential restaurant supplies and raw materials are generally available from a number of sources. Generally, we are not dependent upon single sources of supplies or raw materials. However, in our stores, certain branded items are single source products or product lines.
In 2023, we had over 1,400 billboards and this expenditure accounted for approximately one-third of our total advertising spend for the year. We continue to optimize our non-billboard advertising mix which includes television (increasingly digital), digital display and video, mobile, social media, and search marketing.
In 2024, we had over 1,300 billboards and this expenditure accounted for approximately one-fourth of our total advertising spend for the year. We continue to optimize our non-billboard advertising mix which includes television (increasingly digital), digital display and video, mobile, social media, and search marketing.
This is accompanied by comprehensive training for all store employees on our public accommodations policy and commitment to “Pleasing People.” Marketing : We employ multiple media to reach and engage our guests. Outdoor advertising (i.e., billboards and state department of transportation signs) is the largest advertising vehicle we use to reach our traveling and local guests.
This is accompanied by comprehensive training for all store employees on our public accommodations policy and commitment to “Pleasing People.” Marketing : We employ multiple media channels to reach and engage our guests. Outdoor advertising (e.g., billboards and state department of transportation signs) is one of our largest advertising vehicles we use to reach our traveling and local guests.
The following table highlights the price ranges for our meals in 2023: Price Range Breakfast $ 6.99 to $17.49 Lunch and Dinner $ 5.19 to $19.49 The following table highlights each day-part’s percentage of restaurant sales in 2023: Percentage of Restaurant Sales in 2023 Breakfast Day-Part (until 11:00 a.m.) 25% Lunch Day-Part (11:00 a.m. to 4:00 p.m.) 40% Dinner Day-Part (4:00 p.m. to close) 35% We also offer for sale in our gift shops items that are featured on, or related to, the restaurant menu, such as pies, cornbread mix, coffee, syrups and pancake mixes.
The following table highlights the price ranges for our meals in 2024: ​ ​ ​ ​ ​ Price Range Breakfast ​ $ 6.99 to $ 20.99 Lunch and Dinner ​ $ 5.19 to $ 25.19 ​ The following table highlights each day-part’s percentage of restaurant sales in 2024: ​ ​ ​ ​ ​ Percentage of ​ ​ Restaurant ​ Sales in 2024 Breakfast Day-Part (until 11:00 a.m.) ​ 25% Lunch Day-Part (11:00 a.m. to 4:00 p.m.) ​ 37% Dinner Day-Part (4:00 p.m. to close) 38% ​ We also offer for sale in our gift shops items that are featured on, or related to, the restaurant menu, such as pies, cornbread mix, coffee, syrups and pancake mix.
As of September 13, 2023, approximately 83% of our stores are located along interstate highways. Our remaining stores are located off-interstate or near tourist destinations. Of the 661 stores open as of September 13, 2023, we own the land and buildings for 358, while the other 303 properties are either ground leases or ground and building leases.
As of September 13, 2024, approximately 83% of our stores are located along interstate highways. Our remaining stores are located off-interstate or near tourist destinations. Of the 658 stores open as of September 13, 2024, we own the land and buildings for 358, while the other 300 properties are either ground leases or ground and building leases.
Information on our website is not deemed to be incorporated by reference into this Annual Report on Form 10-K or any other filings that we make from time to time with the SEC. As of September 13, 2023, we operated 661 Cracker Barrel stores in 45 states and 59 Maple Street Biscuit Company stores in 10 states.
Information on our website is not deemed to be incorporated by reference into this Annual Report on Form 10-K or any other filings that we make from time to time with the SEC. As of September 13, 2024, we operated 658 Cracker Barrel stores in 44 states and 68 Maple Street Biscuit Company stores in 10 states.
Our menu also features weekday and weekend dinner specials that showcase a popular dinner entrée. There is some variation in menu pricing and content in different regions of the country. The average check per guest during 2023 was $13.36, which represents a 10.3% increase over the prior year.
Our menu also features weekday and weekend dinner specials that showcase a popular dinner entrée. There is some variation in menu pricing and content in different regions of the country. The average check per guest during 2024 was $14.05, which represents a 5.1% increase over the prior year.
We served an average of approximately 5,800 restaurant guests per week in a typical store in 2023.
We served an average of approximately 5,500 restaurant guests per week in a typical store in 2024.
The following table highlights the five categories that accounted for the largest shares of our retail sales in 2023: Percentage of Retail Sales in 2023 Apparel and Accessories 30% Food 18% Décor 14% Toys 14% Bed and Bath 7% Our typical gift shop features approximately 4,100 stock keeping units.
The following table highlights the five categories that accounted for the largest shares of our retail sales in 2024: ​ ​ ​ ​ ​ Percentage of ​ ​ Retail Sales in ​ 2024 Apparel and Accessories ​ 32% Food ​ 18% Décor 14% Toys 13% Media 7% ​ 7 Table of Contents Our typical gift shop features approximately 4,300 stock keeping units.
Our capital investment in new stores may differ in the future due to changes in our store prototype, building design specifications, site location and site characteristics. Maple Street Biscuit Company We acquired 100% ownership of Maple Street Biscuit Company (“MSBC”) on October 10, 2019. MSBC is a breakfast and lunch fast casual concept.
Our capital investment in new stores may differ in the future due to changes in our store prototype, building design specifications, site location and site characteristics. Maple Street Biscuit Company We also operate Maple Street Biscuit Company (“MSBC”) locations. MSBC is a breakfast and lunch fast casual concept.
We provide our managers and hourly employees with ongoing training through various development courses taught through a blended learning approach, including a mix of hands-on, traditional classroom, written and cloud-based training. Each store is equipped with dedicated training computers and cloud-based proprietary eLearning instruction programs.
We provide our managers and hourly employees with ongoing training through various development courses taught through a blended learning approach, including a mix of hands-on, traditional classroom, written and cloud-based training.
Our event activations drive awareness for the brand and build cultural relevance and affinity with our guests. 8 Table of Contents Store Development: We opened two new Cracker Barrel stores in 2023. Currently, we plan to open one to two new stores during the first quarter of 2024.
Our event activations drive awareness for the brand and build cultural relevance and affinity with our guests. Additionally, in the first quarter of 2024, we launched our customer loyalty program, Cracker Barrel Rewards. Store Development: We opened two new Cracker Barrel stores in 2024. Currently, we plan to open two new stores during 2025.
Cracker Barrel incorporates robust quality assurance and food safety processes to ensure the safety of all our food and retail products delivered to our guests including the following: • Extensive requirements for food supplier approval; • Ongoing third-party food safety audits of food production and distribution centers; • Periodic food product audits conducted by Cracker Barrel quality assurance team; • Rigid processes to ensure new or alternative source suppliers deliver food products to exact specifications; • Third-party testing of retail non-food products to ensure compliance with all specifications and Federal regulations; • Food safety audits conducted on all Cracker Barrel locations three times per year; • Ensuring a pest free environment in our locations though a stringent pest control process; • Monitoring of all national and local food safety regulations pertaining to both food products and store operations; • Monitoring of all health department inspections of all Cracker Barrel locations; and • Monitoring and responding to: o Food borne illness outbreaks, o Food and product recalls, and o Pandemic situations, e.g., COVID-19.
Quality Assurance and Food Safety Cracker Barrel incorporates robust quality assurance and food safety processes to ensure the safety of all our food and retail products delivered to our guests including the following: ● Comprehensive food safety training for store employees and store managers; ● Extensive requirements for food supplier approval; ● Ongoing third-party food safety audits of food production and distribution centers; ● Periodic food product audits conducted by Cracker Barrel quality assurance team; ● Rigid processes to ensure new or alternative source suppliers deliver food products to exact specifications; ● Third-party testing of retail non-food products to ensure compliance with all specifications and Federal regulations; ● Regular unannounced food safety audits conducted on all Cracker Barrel locations several times per year by a nationally recognized third party food safety organization; ● Ensuring a pest free environment in our locations though a stringent pest control process; ● Monitoring of all national and local food safety regulations pertaining to both food products and store operations; ● Monitoring of all health department inspections of all Cracker Barrel locations; and ● Monitoring and responding to: o Food borne illness outbreaks, o Food and product recalls, and o Pandemic situations, e.g., COVID-19. 12 Table of Contents COMPETITION The restaurant and retail industries are intensely competitive with respect to the type and quality of food, retail merchandise, price, service, location, personnel, concept, attractiveness of facilities, availability of carryout and home delivery, internet and mobile ordering capabilities and effectiveness of advertising and marketing.
All stores are freestanding buildings and consist of approximately 20% of gift shop space with the remainder dedicated to our restaurant, training and storage space. Our stores have stone fireplaces and are decorated with antique‑style furnishings and other authentic and nostalgic items, reminiscent of and similar to those found and sold in the past in traditional old country stores.
Our stores have stone fireplaces and are decorated with antique ‑ style furnishings and other authentic and nostalgic items, reminiscent of and similar to those found and sold in the past in traditional old country stores.
The following description of our business should be read in conjunction with the information in Part II of this report under the caption “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8. Financial Statements and Supplementary Data.” Cracker Barrel Old Country Store Concept Our 661 Cracker Barrel stores are not franchised.
The following description of our business should be read in conjunction with the information in Part II of this report under the caption “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8.
The distribution center fulfills retail item orders generated by our automated replenishment system and generally ships the retail orders once a week to the individual stores by two third-party dedicated freight lines. Certain retail items, not centrally purchased and warehoused at the distribution center, are drop-shipped directly by our vendors to individual stores.
The majority of our retail items (approximately 80% in 2024) are warehoused at our retail distribution center in Lebanon, Tennessee. The distribution center fulfills retail item orders generated by our automated replenishment system and generally ships the retail orders once a week to the individual stores by two third-party dedicated freight lines.
MSBC will serve as a long-term growth vehicle that complements Cracker Barrel while providing increased exposure to urban and suburban markets. We anticipate accelerating unit growth in the coming years. Currently, we plan to open approximately four to five MSBC locations during the first quarter of 2024.
We believe that MSBC will serve as a long-term growth vehicle that complements Cracker Barrel while providing increased exposure to urban and suburban markets. Currently, we plan to open three to four MSBC locations in 2025.
We use technology to enhance the experiences of our guests and our employees, and to assist management in all aspects of operating the business. Examples include a digital experience that effectively enables our off-premise business, allows for mobile payments in store, and provides guests with a digital waitlist that can be accessed remotely through our own mobile application.
Examples include a digital experience that drives our loyalty program, effectively enables our off-premise business, allows for mobile payments in store, and provides guests with a digital waitlist that can be accessed remotely through our own mobile application.
The front porch of each store features rows of the signature Cracker Barrel rocking chairs, which are a popular item sold by the gift shops and which we invite guests to use while waiting for a table in our dining room or after enjoying a meal.
The front porch of each store features rows of the signature Cracker Barrel rocking chairs, which are a popular item sold by the gift shops and which we invite guests to use while waiting for a table in our dining room or after enjoying a meal. 6 Table of Contents Products : Our restaurants, which generated approximately 80% of our total revenue in 2024, offer home-style country cooking featuring many of our own recipes that emphasize authenticity and quality.
Additionally, each store typically has an employee training coordinator who oversees the training of the store’s hourly employees. We are increasing our focus on leadership development and mentorship programs to better secure strong, diverse talents across all facets of our organization. This commitment is exemplified by our D.E.L.T.A program (“Diverse Employee Leadership Talent Advancement”).
Each store is equipped with dedicated training computers and cloud-based proprietary eLearning instruction programs. 11 Table of Contents We are increasing our focus on leadership development and mentorship programs to better secure strong, diverse talents across all facets of our organization. This commitment is exemplified by our D.E.L.T.A program (“Diverse Employee Leadership Talent Advancement”).
Because of our gift shop, which have a lower product turnover than our restaurants, we carry larger inventories than many other companies in the restaurant industry. Retail inventories are generally financed through trade credit at terms of 60 days or less. These various trade terms are aided by rapid product turnover of the restaurant inventory.
Restaurant inventories purchased through our principal food distributor are on terms of net zero days, while other restaurant inventories purchased locally generally are financed through trade credit at terms of 30 days or less. Because of our gift shops, which have a lower product turnover than our restaurants, we carry larger inventories than many other companies in the restaurant industry.
Fluid dairy is delivered two to three times a week through approximately fifty regional dairies, the majority of which are under the ownership of two separate unaffiliated companies. Beer and wine are purchased and distributed through approximately 565 distributors with deliveries ranging from weekly to monthly.
Produce is purchased through a national program and is delivered two to three times a week through a network of approximately fifty independent produce suppliers. Fluid dairy is delivered two to three times a week through approximately fifty regional dairies, the majority of which are under the ownership of two separate unaffiliated companies.
Our stores are intended to appeal to both the traveler and the local customer, and we believe they have consistently been a consumer favorite. We pride ourselves on our consistent quality, value and friendly service.
Financial Statements and Supplementary Data.” Cracker Barrel Old Country Store Concept Our Cracker Barrel stores are intended to appeal to both the traveler and the local customer, and we believe they have consistently been a consumer favorite. We pride ourselves on our consistent quality, value and friendly service. As of September 13, 2024, no Cracker Barrel stores were franchised.
Approximately one-third of our 2023 retail items were purchased directly from vendors in the People’s Republic of China. We have relationships with several foreign buying agencies to source product, monitor quality control and supplement product development. Information Technology : We believe that an essential part of pleasing people is established through our ability to leverage technology.
The remaining retail items are drop-shipped directly by our vendors to individual stores. Approximately one-third of our 2024 retail items were purchased directly from vendors in the People’s Republic of China. We have relationships with several foreign buying agencies to source product, monitor quality control and supplement product development.
Our firmly held organization-wide policy is that discrimination, overt or through unconscious bias, has no place at Cracker Barrel Old Country Store. As of July 28, 2023, more than 30% of our employee population is comprised of racial and ethnic minorities and approximately 68% of our employee population is female.
Our firmly held organization-wide policy is that discrimination, overt or through unconscious bias, has no place at Cracker Barrel Old Country Store. As of August 02, 2024, 34% of our employee population is racially and/or ethnically diverse and 70% of our employee population is female.
Our employees are not represented by any union, and management considers its employee relations to be good. People are at the core of our business and an essential part of our Company. Diversity, Equity & Inclusion Since 1969, our corporate mission has been Pleasing People.
People are at the core of our business and an essential part of our Company. 10 Table of Contents Diversity, Equity & Inclusion Since 1969, our corporate mission has been Pleasing People.
Our commitment to offering guests a quality experience begins with our employees. Our mission statement, “Pleasing People,” embraces guests and employees alike, and our employees are trained on the importance of that mission in a culture of mutual respect.
Our mission statement, “Pleasing People,” embraces guests and employees alike, and our employees are trained on the importance of that mission in a culture of mutual respect. We also are committed to staffing each store with an experienced management team to ensure attentive guest service and consistent food quality.
We have a contract with an unaffiliated distributor with custom distribution centers in Lebanon, Tennessee; McKinney, Texas; Gainesville, Florida; Elkton, Maryland; Kendallville, Indiana; Rock Hill, South Carolina; and Shafter, California. We purchase the majority of our food products and restaurant supplies on a cost‑plus basis through this unaffiliated distributor.
Purchasing and Distribution : We negotiate directly with food vendors as to specification, price and other material terms of most food purchases. We have a contract with an unaffiliated distributor with custom distribution centers in Lebanon, Tennessee; McKinney, Texas; Gainesville, Florida; Elkton, Maryland; Kendallville, Indiana; Rock Hill, South Carolina; and Shafter, California.
We are headquartered in Lebanon, Tennessee and were originally founded in 1969. We are organized under the laws of the State of Tennessee. We maintain a website at crackerbarrel.com.
ITEM 1. BUSINESS OVERVIEW Cracker Barrel Old Country Store, Inc. is principally engaged in the operation and development of the Cracker Barrel Old Country Store® concept (“Cracker Barrel”). Originally founded in 1969, we are headquartered in Lebanon, Tennessee and are organized under the laws of the State of Tennessee. We maintain a website at crackerbarrel.com.
In 2023, Individual To Go, Third-Party Delivery and Catering and Occasion accounted for approximately 40%, 34% and 26% of total off-premise sales, respectively. Guest Satisfaction : We are committed to providing our guests a home-style, country-cooked meal, and a variety of retail merchandise served and sold with genuine hospitality in a comfortable environment.
Guest Satisfaction : We are committed to providing our guests a home-style, country-cooked meal, and a variety of retail merchandise served and sold with genuine hospitality in a comfortable environment. Our commitment to offering guests a quality experience begins with our employees.
We also generally open additional new stores throughout the year. Therefore, the results of operations for any interim period cannot be considered indicative of the operating results for an entire year. WORKING CAPITAL In the restaurant industry, substantially all sales are either for cash or third-party credit card.
We also generally open additional new stores throughout the year. Additionally, the fourth quarter of 2024 consisted of 14 weeks. Therefore, the results of operations for any interim period cannot be considered indicative of the operating results for an entire year.
The distributor is responsible for placing food orders, warehousing and delivering food products to our stores. Deliveries are generally made once per week to individual stores. Produce is purchased through a national program and is delivered two to three times a week through a network of approximately fifty independent produce suppliers.
We purchase the majority of our food products and restaurant supplies on a cost ‑ plus basis through this unaffiliated distributor. The distributor is responsible for placing food orders, warehousing and delivering food products to our stores. Deliveries are generally made once per week to individual stores.
Third-Party Delivery includes to go orders that are placed through an aggregator, i.e., Door Dash, Uber Eats, etc. and delivered to guests by an employee of the aggregator. Catering and Occasion includes offerings for large party sizes, which includes our popular Heat n’ Serve offerings that are available for certain holidays.
Our off-premise business consists of three channels: Individual To Go, Third-Party Delivery and Catering and Occasion. Individual To Go includes to go orders that guests pick up from our stores. Third-Party Delivery includes to go orders that are placed through an aggregator, e.g., Door Dash and Uber Eats, and delivered to guests by an employee of the aggregator.
HUMAN CAPITAL As of July 28, 2023, we employed approximately 77,000 people (as compared to approximately 73,000 people as of July 29, 2022), of whom approximately 350 were in advisory and supervisory capacities, approximately 3,300 were in-store management positions and 44 were officers. Many store personnel are employed on a part-time basis.
HUMAN CAPITAL As of August 02, 2024, we employed approximately 77,600 people, of whom 350 were in advisory and supervisory capacities, 3,385 were in-store management positions and 45 were officers. Many store personnel are employed on a part-time basis. Our employees are not represented by any union, and management considers its employee relations to be good.
Employees generally are paid on weekly or semi-monthly schedules in arrears of hours worked except for bonuses that are paid either quarterly or annually in arrears. Many other operating expenses have normal trade terms and certain expenses, such as certain taxes and some benefits, are deferred for longer periods of time. 12 Table of Contents
Many other operating expenses have normal trade terms and certain expenses, such as certain taxes and some benefits, are deferred for longer periods of time.
Beginning in 2020, certain of our Cracker Barrel restaurants began serving an assortment of beer and wine, and the subsequent ongoing expansion of this program throughout our system has resulted in beer and wine service in approximately 590 stores, or approximately 89%, of our Cracker Barrel restaurants as of the end of 2023. 5 Table of Contents Breakfast items can be ordered at any time throughout the day and include juices, eggs, pancakes, meats, grits, and a variety of biscuit specialties, such as gravy and biscuits and country ham and biscuits.
Breakfast items can be ordered at any time throughout the day and include juices, eggs, pancakes, meats, grits, and a variety of biscuit specialties, such as gravy and biscuits and country ham and biscuits.
The relative complexity of operating one of our stores requires an effective management team at the individual store level. To motivate managers to improve sales and operational performance, we maintain bonus plans designed to provide managers with incentives to meet and exceed the operational targets of their store.
To motivate managers to improve sales and operational performance, we maintain bonus plans designed to provide managers with incentives to meet and exceed the operational targets of their store. Each store is assigned to both a restaurant and a retail district manager who each report to a regional vice president.
We believe our technology is highly effective in supporting Cracker Barrel’s daily operations, and we continue to enhance this technology in line with our Company’s strategic vision. 7 Table of Contents We continue to make investments in our cybersecurity program to protect and fortify our brands.
Our help desk leverages technology solutions that enable an efficient and effective way to resolve technology concerns. We believe our technology is highly effective in supporting Cracker Barrel’s daily operations, and we continue to enhance this technology in line with our Company’s strategic vision. Off-Premise Business : Approximately 20% of our restaurant sales are generated through our off-premise channels.
Products : Our restaurants, which generated approximately 79% of our total revenue in 2023, offer home-style country cooking featuring many of our own recipes that emphasize authenticity and quality. Our restaurants serve breakfast, lunch and dinner daily and offer dine-in, pick-up and delivery services. Menu items are moderately priced.
Our restaurants serve breakfast, lunch and dinner daily and offer dine-in, pick-up and delivery services. Menu items are moderately priced. Approximately 93%, of our Cracker Barrel restaurants serve an assortment of beer and wine as of the end of 2024.
Therefore, like many restaurant companies, we are able to, and often do, operate with negative working capital. Restaurant inventories purchased through our principal food distributor are on terms of net zero days, while other restaurant inventories purchased locally generally are financed through trade credit at terms of 30 days or less.
WORKING CAPITAL In the restaurant industry, substantially all payments received on sales are made by credit card, debit card or cash. Therefore, like many restaurant companies, we are able to, and often do, operate with negative working capital.
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ITEM 1. BUSINESS OVERVIEW Cracker Barrel Old Country Store, Inc. (“we,” “us,” “our” or the “Company,” which reference, unless the context requires otherwise, also includes our direct and indirect wholly owned subsidiaries), is principally engaged in the operation and development of the Cracker Barrel Old Country Store® concept (“Cracker Barrel”).
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In 2024, we announced our strategic transformation plan. The strategic transformation plan is anchored on three overarching business imperatives: driving relevancy, delivering food and an experience guests love, and growing profitability. We have undertaken certain initiatives as part of these imperatives, including modifying capital allocation to support increased investment in the business to drive organic growth.
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Each store is assigned to both a restaurant and a retail district manager who each report to a regional vice president. Purchasing and Distribution : We negotiate directly with food vendors as to specification, price and other material terms of most food purchases.
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We launched our loyalty program to leverage guest data to better understand consumer behavior and identify ways to drive frequency and engagement. As part of the plan, we are redefining our brand, including by improving our stores’ designs and atmosphere. We are currently testing store remodel prototypes. Our store remodel program includes two categories: full remodels and store refreshes.
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We purchase the majority of our retail items (approximately 80% in 2023) directly from domestic and international vendors, and we warehouse, or crossdock, such items at our retail distribution center in Lebanon, Tennessee.
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We expect that 25-30 stores will be fully remodeled and we expect to complete 25-30 store refreshes in 2025.
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Our service desk leverages technology solutions that enable an efficient and effective way to resolve technology concerns.
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All stores are freestanding buildings and consist of approximately 20% of gift shop space with the remainder dedicated to our restaurant, training and storage space.
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From protecting guest information to ensuring systems are reliably available and effective, data privacy and cybersecurity are organization-wide efforts that are incorporated into every technology and business decision at both our brands.
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Beer and wine are purchased and distributed through approximately 630 distributors with deliveries ranging from weekly to monthly.
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Led by our Chief Information Officer and Senior Director of Security, cybersecurity is a top priority that is reviewed by our Audit Committee on a quarterly basis and the Board of Directors on an annual basis. Our program is designed to monitor, assess, and manage cyber-risk with a continuous improvement mindset.
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Information Technology : We believe that an essential part of pleasing people is established through our ability to leverage technology. We use technology to enhance the experiences of our guests and our employees, and to assist management in all aspects of operating the business.
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Our cybersecurity program is aligned with the National Institute of Standards and Technology (NIST) Cybersecurity Framework. Every year we have a third-party organization assess and measure the maturity of our program, which has shown annual improvement for the past three years. We also perform regular technical assessments, including annual penetration testing of our online systems and internal networks.
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Our in-store guest experience is supported by systems that manage the dining room seating, assist in facilitating customer orders of food and retail products, and routes food orders to our kitchen. Marketing uses digital technology to provide more relevancy in customer messaging.
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Feedback from our maturity and technical assessments is incorporated into our systems and procedures through continual upgrades intended to further improve our security posture. Off-Premise Business : Approximately 20% of our restaurant sales are generated through our off-premise channels. Our off-premise business consists of three channels. Individual To Go includes to go orders that guests pick up from our stores.
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Catering and Occasion includes offerings for large party sizes, which includes our popular Heat n’ Serve offerings that are available for certain holidays. In 2024, Individual To Go, Third-Party Delivery and Catering and Occasion accounted for approximately 48%, 32% and 20% of total off-premise sales, respectively.
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We also are committed to staffing each store with an experienced management team to ensure attentive guest service and consistent food quality.
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These employee-led organizations provide opportunities to network, to obtain and develop leadership skills, and to inform and influence on all aspects of the Cracker Barrel brand.
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Health & Safety While all of our dining rooms are currently operating without COVID-19-related restrictions, it is possible that renewed outbreaks or increases in cases and/or further new variants of the disease, either as part of a national trend or on a more localized basis, could result in COVID-19-related restrictions including capacity restrictions or otherwise limit our dine-in services, or negatively affect consumer demand. 10 Table of Contents In response to the COVID-19 pandemic, we instituted operational protocols to comply with applicable regulatory requirements to protect the health and safety of employees and guests, and we implemented and continually adapted a number of strategies to support the recovery of our business and navigate through the uncertain environment.
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Retail inventories are generally financed through trade credit at terms of 60 days or less. These various trade terms are aided by rapid product turnover of the restaurant inventory. Employees generally are paid once every week or every two weeks except for bonuses that are paid either quarterly or annually in arrears.
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We continue to focus on growing our off-premise business and investing in our digital infrastructure to improve the guest experience in the face of these ongoing challenges. Following the COVID-19 pandemic, our teams have maintained close contact with applicable regulatory agencies, from the Centers for Disease Control and Prevention (“CDC”) and the U.S.
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Food and Drug Administration to state and local regulatory agencies and health authorities, to ensure we are following the latest recommended practices and procedures to protect the health and safety of employees and guests. We instituted operational changes and enhancements to safety protocols to ensure that both our guests and employees experience a clean and safe environment.
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These enhanced processes were added to the already rigorous food safety and sanitation standards that we continuously follow and are verified by a third-party firm.
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COMPETITION The restaurant and retail industries are intensely competitive with respect to the type and quality of food, retail merchandise, price, service, location, personnel, concept, attractiveness of facilities, availability of carryout and home delivery, internet and mobile ordering capabilities and effectiveness of advertising and marketing.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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If we become engaged in a proxy contest or other public engagement with an activist shareholder in the future, our business could be adversely affected because: • responding to public proposals and director nominations, special meeting requests and other actions by activist shareholders can disrupt our operations, be costly and time-consuming, and divert the attention of our management and employees; • perceived uncertainties as to our future direction may result in the loss of potential business opportunities, and may make it more difficult to attract and retain qualified personnel and business partners; • claims made by activist shareholders in connection with a proxy contest or otherwise may harm our reputation, damage our relations with customers, employees and business relations such as suppliers, or otherwise impair our business; and • pursuit of an activist shareholder’s agenda may adversely affect our ability to effectively implement our business strategy and create additional value for our shareholders.
If a proxy contest ensues, or if we become engaged in a proxy contest with another activist shareholder in the future, our business could be adversely affected because: · responding to public proposals and director nominations, special meeting requests and other actions by activist shareholders can disrupt our operations, be costly and time-consuming, and divert the attention of our management and employees; · perceived uncertainties as to our future direction may result in the loss of potential business opportunities, and may make it more difficult to attract and retain qualified personnel and business partners; · claims made by activist shareholders in connection with a proxy contest or otherwise may harm our reputation, damage our relations with customers, employees and business relations such as suppliers, or otherwise impair our business; and · pursuit of an activist shareholder’s agenda may adversely affect our ability to effectively implement our business strategy and create additional value for our shareholders.
Such processes include distribution of food and retail products to our store locations and customers, credit and debit card authorization and processing, gift card tracking and authorization, employee payroll card services, health care and workers’ compensation insurance claims processing, wage and related tax credit documentation and approval, guest satisfaction survey programs, employee engagement surveys and externally hosted business software applications.
Such processes include distribution of food and retail products to our store locations and customers, credit and debit card authorization and processing, gift card tracking and authorization, payroll payments, payroll taxes processing, employee payroll card services, health care and workers’ compensation insurance claims processing, wage and related tax credit documentation and approval, guest satisfaction survey programs, employee engagement surveys and externally hosted business software applications.
Additionally, as we continue to evolve our marketing strategy, we are increasingly utilizing more traditional and higher cost methods of advertising, such as national cable television, radio and online and digital media. These types of advertising, their effects upon our revenues and, in turn, our profits, are uncertain.
Additionally, as we continue to evolve our marketing strategy, we are increasingly utilizing more traditional and higher cost methods of advertising, such as national cable television, radio, online and digital media and our loyalty program. These types of advertising, their effects upon our revenues and, in turn, our profits, are uncertain.
The preferred stock purchase rights would cause dilution to a person or group that attempts to acquire the Company on terms that do not satisfy the requirements of a qualifying offer under the shareholder rights plan or are otherwise not approved by our Board of Directors.
The preferred stock purchase rights would cause dilution to a person or group that attempts to acquire the Company on terms that do not satisfy the requirements of a qualifying offer under the shareholder rights agreement or are otherwise not approved by our Board of Directors.
Provisions in our charter, Tennessee law and our shareholder rights plan may discourage potential acquirers of the Company. Our charter documents contain provisions that may have the effect of making it more difficult for a third party to acquire or attempt to acquire control of the Company.
Provisions in our charter, Tennessee law and our shareholder rights agreement may discourage potential acquirers of the Company. Our charter documents contain provisions that may have the effect of making it more difficult for a third party to acquire or attempt to acquire control of the Company.
In the past, activist shareholders have nominated candidates for election to our Board of Directors at our annual meetings of shareholders, resulting in proxy contests, and called publicly for special meetings of shareholders to consider other proposals relating to corporate policies of the Company, including on matters such as our dividend policy, capital structure and strategic alternatives.
Activist shareholders have nominated candidates for election to our Board of Directors at our annual meetings of shareholders multiple times, resulting in proxy contests, and called publicly for special meetings of shareholders to consider other proposals relating to corporate policies of the Company, including on matters such as our dividend policy, capital structure and strategic alternatives.
This strategy involves numerous risks, and we may not be able to open all of our planned new stores and the new stores that we open may not be profitable or as profitable as our existing stores. A significant risk in executing our business strategy is locating, securing and profitably operating an adequate supply of suitable new store sites.
This strategy involves numerous risks, and we may not be able to open all of our planned new stores and the new stores that we open may not be profitable or as profitable as our existing stores. 26 Table of Contents A significant risk in executing our business strategy is locating, securing and profitably operating an adequate supply of suitable new store sites.
The inappropriate use of social media by our guests or employees could increase our costs, lead to litigation or result in negative publicity that could damage our reputation. 15 Table of Contents Failure to maximize or to successfully assert our intellectual property rights could adversely affect our business and results of operations.
The inappropriate use of social media by our guests or employees could increase our costs, lead to litigation or result in negative publicity that could damage our reputation. Failure to maximize or to successfully assert our intellectual property rights could adversely affect our business and results of operations.
The number and location of stores, the growth of e-commerce, type of concept, quality and efficiency of service, attractiveness of facilities and effectiveness of advertising and marketing programs also are important factors. We anticipate that intense competition will continue with respect to all of these factors.
The number and location of stores, the growth of e-commerce, type of concept, quality and efficiency of service, attractiveness of facilities and effectiveness of advertising and marketing programs also are important factors. 16 Table of Contents We anticipate that intense competition will continue with respect to all of these factors.
Any determination to pay cash dividends on our common stock in the future will be based primarily upon our financial condition, prospects, results of operations and business requirements and our Board of Directors’ conclusion that the declaration of cash dividends is in the best interest of our shareholders and is in compliance with all laws and agreements applicable to the payment of dividends.
Any future determination to pay cash dividends on our common stock, or to pay cash dividends in an amount comparable to historical cash dividends on our common stock, will be based primarily upon our financial condition, prospects, results of operations and business requirements and our Board of Directors’ conclusion that the declaration of cash dividends is in the best interest of our shareholders and is in compliance with all laws and agreements applicable to the payment of dividends.
In addition to the COVID-19 pandemic, the United States and other countries have experienced, and may experience in the future, outbreaks of other viruses, such as norovirus, the bird/avian flu or other diseases.
The United States and other countries have experienced, and may experience in the future, outbreaks of viruses, such as COVID-19, norovirus, the bird/avian flu or other diseases.
Successful system-wide implementation across hundreds of stores and involving tens of thousands of employees relies on consistency of training, stability of workforce, ease of execution and the absence of offsetting factors that can adversely influence results. Failure to achieve successful implementation of our initiatives could adversely affect our results of operations.
Successful system-wide implementation across hundreds of stores and involving tens of thousands of employees relies on consistency of training, stability of workforce, ease of execution and the absence of offsetting factors that can adversely influence results. Failure to achieve successful implementation of our initiatives may adversely affect our business, financial condition and results of operations.
As a result, litigation may adversely affect our business, financial condition and results of operations. 21 Table of Contents Our business could be negatively affected as a result of actions of activist shareholders.
As a result, litigation may adversely affect our business, financial condition and results of operations. Our business could be negatively affected as a result of actions of activist shareholders.
Our revenues and expenses can be affected significantly by the number and timing of the opening of new stores and the closing, relocating and remodeling of existing stores. We incur substantial pre-opening expenses each time we open a new store and other expenses when we close, relocate or remodel existing stores.
Our revenues and expenses can be affected significantly by the number and timing of the opening of new stores and the closing, relocating and remodeling of existing stores. We incur substantial pre-opening expenses each time we open a new store and other expenses when we close, relocate or remodel existing stores, which may be higher than anticipated.
Additionally, social media uses and platforms are constantly evolving, and as a result, we need to innovate and develop our social media strategies to maintain brand relevance. We rely on social media and other forms of digital marketing to increase brand recognition and reach a broader audience.
Additionally, social media uses and platforms are constantly evolving, and as a result, we need to innovate and develop our social media and digital marketing strategies to maintain brand relevance to increase brand recognition and reach a broader audience.
The protection of customer, employee and company data is critical to us. We are subject to laws relating to information security, privacy, cashless payments, consumer credit, and fraud. Additionally, an increasing number of government and industry groups have established laws and standards for the protection of personal and health information.
We are subject to laws relating to information security, privacy, cashless payments, consumer credit, and fraud. Additionally, an increasing number of government and industry groups have established laws and standards for the protection of personal and health information.
Our attempts to offset cost pressures, such as through menu price increases and operational improvements, may not be successful. We seek to provide a moderately priced product, and, as a result, we may not seek to or be able to pass along price increases to our customers sufficient to completely offset cost increases without adversely affecting our customers’ demand.
We seek to provide a moderately priced product, and, as a result, we may not seek to or be able to pass along price increases to our customers sufficient to completely offset cost increases without adversely affecting our customers’ demand.
Partly because of our size, finding qualified vendors and accessing food, retail products, supplies and certain outsourced services in a timely and efficient manner is a significant challenge that typically is more difficult with respect to goods or services sourced outside the United States. In some cases, we may have only one supplier for a product or service.
Partly because of our size, finding qualified vendors and accessing food, retail products, supplies and certain outsourced services in a timely and efficient manner is a significant challenge that typically is more difficult with respect to goods or services sourced outside the United States.
The outcome of litigation, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify. Plaintiffs in these types of lawsuits may seek recovery of very large or indeterminate amounts and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. The cost to defend future litigation may be significant.
Plaintiffs in these types of lawsuits may seek recovery of very large or indeterminate amounts and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. The cost to defend future litigation may be significant.
Litigation may adversely affect our business, financial condition and results of operations. Our business is subject to the risk of litigation by employees, guests, suppliers, shareholders, governmental agencies, competitors or others through private actions, class actions, administrative proceedings, regulatory actions or other litigation.
Our business is subject to the risk of litigation by employees, guests, suppliers, shareholders, governmental agencies, competitors or others through private actions, class actions, administrative proceedings, regulatory actions or other litigation.
Likewise, we cannot assure you that we will be able to retain sufficient skilled finance and accounting personnel, especially in light of the increased demand for such personnel among publicly traded companies.
Likewise, we cannot assure you that we will be able to retain sufficient skilled finance and accounting personnel, especially in light of the increased demand for such personnel among publicly traded companies. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ​ ​ 29 Table of Contents
Risks Related to our Capital Structure The performance of our business as affected by the level of our indebtedness could prevent us from meeting the obligations under our revolving credit facility or the indenture governing the $300 million aggregate principal amount of 0.625% Convertible Senior Notes due 2026 (the “Notes”), maintaining sufficient liquidity to operate our business or service our debt obligations, and we cannot provide any guarantee of future cash dividend payments or that we will be able to actively repurchase our common stock pursuant to a share repurchase program.
Risks Related to our Capital Structure The performance of our business as affected by the level of our indebtedness could prevent us from meeting the obligations under our revolving credit facility or the indenture governing the $300 million aggregate principal amount of 0.625% Convertible Senior Notes due 2026 (the “Notes”), maintaining sufficient liquidity to operate our business or service our debt obligations, and we cannot provide any guarantee of future cash dividend payments or that we will be able to actively repurchase our common stock pursuant to a share repurchase program. 17 Table of Contents Our consolidated indebtedness and restrictions in our revolving credit facility may have the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions and increasing borrowing costs.
Our business is not static – it changes periodically as a result of many factors, including, among other items discussed in other risk factors, the following: • increases and decreases in guest traffic, average weekly sales, restaurant and retail sales and restaurant profitability; • inflationary and other market conditions that affect the costs and availability of commodities, labor, energy, fuel, transportation and other inputs necessary to operate our stores effectively in a manner consistent with our strategy; • the rate at which we open new stores, the timing of new store openings and the related high initial operating costs; 26 Table of Contents • changes in advertising and promotional activities and expansion into new markets; and • impairment of long-lived assets and any loss on store closures.
Our annual and quarterly operating results may fluctuate significantly and could fall below the expectations of investors and securities analysts due to a number of factors, some of which are beyond our control, resulting either in volatility or a decline in the price of our securities. 28 Table of Contents Our business is not static – it changes periodically as a result of many factors, including, among other items discussed in other risk factors, the following: ● increases and decreases in guest traffic, average weekly sales, restaurant and retail sales and restaurant profitability; ● inflationary and other market conditions that affect the costs and availability of commodities, labor, energy, fuel, transportation and other inputs necessary to operate our stores effectively in a manner consistent with our strategy; ● the rate at which we open new stores, the timing of new store openings and the related high initial operating costs; ● changes in advertising and promotional activities and expansion into new markets; and ● impairment of long-lived assets and any loss on store closures; and ● volatility of our stock price.
Risks Related to Our Business Health concerns, government regulation relating to the consumption of food products and widespread infectious diseases could affect consumer preferences and could have a material adverse effect on our results of operations.
Risks Related to Our Business Pandemics, epidemics, endemics, and other public health concerns, or government regulation relating to the consumption of food products and widespread infectious diseases could reduce consumer traffic and could have a material adverse effect on our results of operations.
Even when the allegations or complaints are not accurate or valid, unfavorable publicity relating to one or more of our stores, or only to a single store, could adversely affect public perception of the entire brand.
Even when the allegations or complaints are not accurate or valid, unfavorable publicity relating to one or more of our stores, or only to a single store, may adversely affect public perception of the entire brand before we have the opportunity to respond to and address such allegations.
For example, frequent or unusually heavy snowfall, ice storms, rain storms, floods, droughts or other extreme weather conditions over a prolonged period could make it difficult for our customers to travel to our stores and can disrupt deliveries of food and supplies to our stores and thereby reduce our sales and profitability.
Frequent or unusual extreme weather conditions over a prolonged period could make it difficult for our customers to travel to our stores and can disrupt deliveries of food and supplies to our stores and thereby reduce our sales and profitability.
In addition to the risk presented by the possible long lead times to source these products, our results of operations may be materially affected by risks such as: • tariffs, trade barriers, sanctions, import limitations and other trade restrictions by the U.S. government on products or components shipped from foreign sources (particularly, the People’s Republic of China); • fluctuating currency exchange rates or control regulations; • foreign government regulations; • product testing regulations; • foreign political and economic instability; and • disruptions due to labor stoppages, strikes or slowdowns, or other disruptions, involving our vendors or the transportation and handling industries.
We use a number of products that are or may be manufactured in a number of foreign countries, which subjects us to certain risks, including possible long lead times to source products; tariffs, trade barriers, sanctions, import limitations and other trade restrictions by the U.S. government on products or components shipped from foreign sources (particularly, the People’s Republic of China); fluctuating currency exchange rates or control regulations; foreign government regulations; product testing regulations; foreign political and economic instability; and disruptions due to labor stoppages, strikes or slowdowns, or other disruptions, involving our vendors or the transportation and handling industries.
Consumers may be less willing to pay our menu prices and may increasingly visit lower-priced competitors, or may forgo some purchases altogether.
Consumers may be less willing to pay our menu prices and may increasingly visit lower-priced competitors or may limit their restaurant or retail purchases.
Also, as demographic and economic patterns (e.g., highway or roadway traffic patterns, concentrations of general retail or hotel activity, local population densities or increased competition) change, current locations may not continue to be attractive or profitable.
An increase in such expenses could have an adverse effect on our results of operations. Also, as demographic and economic patterns (e.g., highway or roadway traffic patterns, concentrations of general retail or hotel activity, local population densities or increased competition) change, current locations may not continue to be attractive or profitable.
New stores typically experience an adjustment period before sales levels and operating margins normalize, and even sales at successful newly opened stores generally do not make a significant contribution to profitability in their initial months of operation.
Economic conditions may also reduce commercial development activity and limit the availability of attractive sites for new stores. New stores typically experience an adjustment period before sales levels and operating margins normalize, and even sales at successful newly opened stores generally do not make a significant contribution to profitability in their initial months of operation.
Risks Related to Macroeconomic and Industry Conditions We have experienced and continue to experience inflationary conditions with respect to the cost for food, ingredients, retail merchandise, transportation, distribution, labor and utilities, and we may not be able to increase prices or implement operational improvements sufficient to fully offset inflationary pressures on such costs, which may have a material adverse effect on our results of operations.
Risks Related to Macroeconomic and Industry Conditions We are currently experiencing, and have in the past experienced, inflationary conditions with respect to a variety of costs, including the cost for food, ingredients, retail merchandise, transportation, distribution, labor and utilities, and we may not be able to increase prices or implement operational improvements sufficient to fully offset inflationary pressures on such costs, which may have a material adverse effect on our results of operations. ​ 14 Table of Contents The strength of our revenues and results of operations are dependent upon, among other things, the price and availability of food, ingredients, retail merchandise, transportation, distribution, labor and utilities.
There is no assurance that we will be able to successfully execute our strategies and achieve our goals. Failure, or perceived failure, to achieve these goals could damage our reputation and relationships with customers, government agencies and investors.
There is no assurance that we will be able to successfully execute our strategies and achieve our goals. Failure, or perceived failure, to achieve these goals could damage our reputation and relationships with customers, government agencies and investors. Such conditions could have an adverse effect on our business, results of operations and financial condition.
In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to temporarily increase the conversion rate for the Notes.
For example, if a takeover constitutes a fundamental change, then noteholders will have the right to require us to repurchase their Notes for cash. In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to temporarily increase the conversion rate for the Notes.
The shareholder rights plan will expire on April 9, 2024. The preferred stock purchase rights are triggered ten days after the date of a public announcement that a person or group acting in concert has acquired, or obtained the right to acquire, beneficial ownership of 20% or more of our outstanding common stock.
If the shareholder rights agreement is not approved at the 2024 Annual Meeting, the shareholders rights agreement will expire promptly following the 2024 Annual Meeting. 24 Table of Contents The preferred stock purchase rights are triggered ten days after the date of a public announcement that a person or group acting in concert has acquired, or obtained the right to acquire, beneficial ownership of 20% or more of our outstanding common stock.
In addition, many of the factors discussed above, along with the current economic environment and the related impact on available credit, may affect us and our suppliers and other business partners, landlords, and customers in an adverse manner, including, but not limited to, reducing access to liquid funds or credit (including through the loss of one or more financial institutions that are a part of our revolving credit facility), increasing the cost of credit, limiting our ability to manage interest rate risk, increasing the risk of bankruptcy of our suppliers, landlords or counterparties to or other financial institutions involved in our revolving credit facility and our derivative and other contracts, increasing the cost of goods to us, and other adverse consequences which we are unable to fully anticipate.
We cannot guarantee that economic conditions will improve in 2025, in which case we may experience declines in revenues and profits, and could face capital and liquidity constraints or other business challenges. 27 Table of Contents Further, the related impact on available credit, may affect us and our suppliers and other business partners, landlords, and customers in an adverse manner, including, but not limited to, reducing access to liquid funds or credit (including through the loss of one or more financial institutions that are a part of our revolving credit facility), increasing the cost of credit, limiting our ability to manage interest rate risk, increasing the risk of bankruptcy of our suppliers, landlords or counterparties to or other financial institutions involved in our revolving credit facility and our derivative and other contracts, increasing the cost of goods to us, and other adverse consequences which we are unable to fully anticipate.
We may not have or be able to secure financing for sufficient funds to satisfy all amounts due under the other indebtedness and the Notes. Provisions in the indenture governing the Notes could delay or discourage a takeover of us.
We may not have or be able to secure financing for sufficient funds to satisfy all amounts due under the other indebtedness and the Notes.
Our failure to anticipate and respond effectively to one or more adverse changes in any of these factors could have a material adverse effect on our results of operations.
Our failure to anticipate and respond effectively to one or more adverse changes in any of these factors could have a material adverse effect on our results of operations. Inflationary pressures and other fluctuations impacting the cost of these items could have a negative impact on our business in 2025.
Delays or failures in opening new stores, or achieving lower than expected sales in new stores, or drawing a greater than expected proportion of sales in new stores from existing stores, could materially adversely affect our business strategy and could have an adverse effect on our business and results of operations. 24 Table of Contents Our expansion into new geographic markets may present increased risks due to our relative unfamiliarity with these markets.
Delays or failures in opening new stores, or achieving lower than expected sales in new stores, or drawing a greater than expected proportion of sales in new stores from existing stores, could materially adversely affect our business strategy and could have an adverse effect on our business and results of operations.
We rely extensively on our information technology across our operations, including, but not limited to, point of sales processing, supply chain management, retail merchandise allocation and distribution, labor productivity and expense management Our business depends significantly on the reliability, security and capacity of our information technology systems to process these transactions, summarize results, manage and report on our business and our supply chain.
We rely extensively on our information technology across our operations, including, but not limited to, point of sales processing, supply chain management, retail merchandise allocation and distribution, labor productivity and expense management.
The loss of key executives or difficulties in recruiting and retaining qualified personnel could jeopardize our future growth and success . We have assembled a senior management team which has substantial background and experience in the restaurant and retail industries.
If competitive pressures or other factors prevent us from offsetting increased labor costs by increases in prices, our profitability may decline. The loss of key executives or difficulties in recruiting and retaining qualified personnel could jeopardize our future growth and success. We have assembled a senior management team which has substantial background and experience in the restaurant and retail industries.
We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the Notes or pay the cash amounts due upon conversion.
We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the Notes or pay the cash amounts due upon conversion. In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the Notes or pay the cash amounts due upon conversion.
We have disaster recovery procedures and business continuity plans in place to address most events, back up and offsite locations for recovery of electronic and other forms of data and information.
Additionally, our corporate systems and processes and support for our restaurant and retail operations are centralized on one campus in Tennessee. We have disaster recovery procedures and business continuity plans in place to address most events, back up and offsite locations for recovery of electronic and other forms of data and information.
Our performance is dependent on attracting and retaining a large and growing number of qualified store employees. Availability of staff varies widely from location to location. Many staff members are in entry-level or part-time positions, typically with high rates of turnover.
Our performance is dependent on attracting and retaining a large number of qualified store employees. Many staff members are in entry-level or part-time positions, typically with high rates of turnover. High turnover of store management and staff may cause us to incur higher direct costs associated with recruiting, training and retaining replacement personnel.
As a merchant and service provider of point-of-sale services, we are also subject to the Payment Card Industry Data Security Standard issued by the Payment Card Industry Council.
As a merchant and service provider of point-of-sale services, we are also subject to the Payment Card Industry Data Security Standard issued by the Payment Card Industry Council. The regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and constantly changing requirements.
In addition, some of these essential technology-based business systems are outsourced to third parties. While we make efforts to ensure that our outsourced providers are observing proper standards and controls, we cannot guarantee that breaches, disruptions or failures caused by these providers will not occur. A privacy breach could adversely affect our business.
While we make efforts to ensure that our outsourced providers are observing proper standards and controls, we cannot guarantee that breaches, disruptions or failures caused by these providers will not occur.
In addition, from time to time, our systems may become obsolete or require attention and could result in interruptions in our services and non-compliance with certain laws or regulations. Any material interruption in our information technology and telecommunication systems could have a material adverse effect on our business or results of operations.
In addition, from time to time, our systems may become obsolete or require attention and could result in interruptions in our services and non-compliance with certain laws or regulations.
Tip credits are the amounts an employer is permitted to assume an employee receives in tips when the employer calculates the employee’s hourly wage for minimum wage compliance purposes. Increases in minimum wage levels and changes to the tip credit have been made and continue to be proposed at both federal and state levels.
Tip credits are the amounts an employer is permitted to assume an employee receives in tips when the employer calculates the employee’s hourly wage for minimum wage compliance purposes.
Unfavorable publicity could harm our business. In addition, our failure to recognize, respond to and effectively manage the impact of social media could materially impact our business.
If we are unable to continue to compete effectively, our business, financial condition and results of operations would be adversely affected. Unfavorable publicity could harm our business. In addition, our failure to recognize, respond to and effectively manage the impact of social media could materially impact our business.
Fluctuations in economic conditions, weather, supply chain disruptions, freight efficiency, demand and other factors also affect the availability, quality and cost of the ingredients and retail merchandise that we buy. Changes in global demand for corn, wheat and dairy products have caused and could continue to cause volatility in the feed costs for poultry and livestock.
We have experienced and continue to experience inflationary pressures with respect to these costs. Fluctuations in economic conditions, weather, supply chain disruptions, freight efficiency, demand and other factors also affect the availability, quality and cost of the ingredients and retail merchandise that we buy.
We also compete with other restaurant chains and other retail businesses for quality site locations, management and hourly employees, and other competitive pressures that could affect both the availability and cost of these important resources. If we are unable to continue to compete effectively, our business, financial condition and results of operations would be adversely affected.
We also compete with other restaurant chains and other retail businesses for quality site locations, management and hourly employees, and other competitive pressures may affect both the availability and cost of these important resources.
Any of these events could also affect consumer sentiment and confidence that in turn affect consumer spending patterns or result in increased costs for us due to security measures.
Any of these events could also affect consumer sentiment and confidence that in turn affect consumer spending patterns or result in increased costs for us due to security measures. Our business is somewhat seasonal and also can be affected by extreme weather conditions and natural disasters, social unrest or other catastrophic events.
A decrease in guest traffic to our stores, a change in our mix of products sold or an increase in costs as a result of these health concerns either in general or specific to our operations, could result in a decrease in sales or higher costs to our stores that would materially harm our business. 14 Table of Contents Our plans depend significantly on our strategic priorities and business initiatives designed to enhance our menu and retail offerings, support our brand, improve operating margins and improve the efficiencies and effectiveness of our operations.
A decrease in guest traffic to our stores, a change in our mix of products sold or an increase in costs as a result of these health concerns either in general or specific to our operations, could result in a decrease in sales or higher costs to our stores that would materially harm our business.
These initiatives involve various inherent risks, including, without limitation, general business risk, integration and synergy risk, market acceptance risk and risks associated with the potential distraction of management.
We may, from time to time, evaluate and pursue other opportunities for growth, including through strategic investments, joint ventures, other acquisitions, and other initiatives. These initiatives involve various inherent risks, including, without limitation, general business risk, integration and synergy risk, market acceptance risk and risks associated with the potential distraction of management.
Additionally, if our competitors increased their spending on advertising and promotions, we could be forced to substantially increase our advertising, media or marketing expenses. If we did so or if our current advertising and promotion programs become less effective, we could experience a material adverse effect on our results of operations.
Additionally, if our competitors increased their spending on advertising and promotions, we could be forced to substantially increase our advertising, media or marketing expenses.
Additionally, we rely on our suppliers to comply with applicable laws and industry standards, and if our suppliers are unable to comply with such laws or do not otherwise meet our quality standards, we may face a disruption in our supply chain that could have a material adverse effect on our business.
Food safety concerns, widespread outbreaks of livestock and poultry diseases, and product recalls, all of which are out of our control, and, in many instances, unpredictable, could also increase our costs and possibly affect the supply of livestock and poultry products. 15 Table of Contents Additionally, we rely on our suppliers to comply with applicable laws and industry standards, and if our suppliers are unable to comply with such laws or do not otherwise meet our quality standards, we may face a disruption in our supply chain that could have a material adverse effect on our business.
As a result, the conversion of some or all of the Notes or the exercise of some or all of such warrants may dilute the ownership interests of existing shareholders.
Furthermore, the warrants evidenced by the warrant transactions are expected to be settled on a net-share basis. As a result, the conversion of some or all of the Notes or the exercise of some or all of such warrants may dilute the ownership interests of existing shareholders.
The restaurant industry is subject to extensive federal, state and local laws and regulations, including those relating to food safety, minimum wage and other labor issues (such as unionization), health care, animal health and welfare, menu labeling and building and zoning requirements and those relating to the preparation and sale of food and alcoholic beverages as well as certain retail products.
Legal and Regulatory Risks We are subject to a number of risks relating to federal, state and local regulation of our business, including the areas of health care reform and environmental matters, and an insufficient or ineffective response to government regulation may increase our costs and decrease our profit margins. 22 Table of Contents The restaurant industry is subject to extensive federal, state and local laws and regulations, including those relating to food safety, and other labor issues (such as unionization), health care, animal health and welfare, menu labeling and building and zoning requirements and those relating to the preparation and sale of food and alcoholic beverages as well as certain retail products.
Operating margins for our restaurants are subject to changes in the price and availability of food commodities, including beef, pork, chicken, dairy and produce. The effect of, introduction of, or changes to tariffs or exchange rates on imported retail products or food products could increase our costs and possibly affect the supply of those products.
The effect of, introduction of, or changes to tariffs or exchange rates on imported retail products or food products could increase our costs and possibly affect the supply of those products. Changes in demand for over-the-road transportation and distribution services could cause volatility, increase our costs and adversely affect our operating margins.
In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the Notes or pay the cash amounts due upon conversion. 16 Table of Contents Our failure to repurchase Notes or to pay the cash amounts due upon conversion when required will constitute a default under the indenture governing the Notes.
Our failure to repurchase Notes or to pay the cash amounts due upon conversion when required will constitute a default under the indenture governing the Notes.
High turnover of store management and staff would cause us to incur higher direct costs associated with recruiting, training and retaining replacement personnel. Management turnover as well as general shortages in the labor pool can cause our stores to operate with reduced staff, which negatively affects our ability to provide appropriate service levels to our customers.
Management turnover as well as general shortages in the labor pool can cause our stores to operate with reduced staff, which negatively affects our ability to provide appropriate service levels to our customers. Competition for qualified employees exerts upward pressure on wages and benefits paid to attract such personnel, resulting in higher labor costs, including greater recruiting and training expenses.
As privacy and information security laws, regulations and practices change and cyber risks continue to evolve, we may incur additional costs to ensure we remain in compliance and protect guest, employee and Company information. 19 Table of Contents We outsource certain business processes to third-party vendors that subject us to risks, including disruptions in business and increased costs ; our use of third-party technologies has increased and if we are unable to maintain our rights to these technologies our business may be harmed.
We outsource certain business processes to third-party vendors that subject us to risks, including disruptions in business and increased costs; our use of third-party technologies has increased and if we are unable to maintain our rights to these technologies our business may be harmed. Some of our business processes are currently outsourced to third parties.
Severe weather may disrupt our ability to receive food items, which may adversely affect the availability, quality and cost of the items we buy. In the event we increase menu prices or adjust menu offerings to offset such increases, we may experience a negative consumer response.
In the event we increase menu prices or adjust menu offerings to offset such increases, we may experience a negative consumer response.
Any of these factors could have an adverse effect on our results of operations, cash flows from operations and our financial condition. 18 Table of Contents Our risks are heightened because of our single retail distribution facility and our potential inability or failure to execute on a comprehensive business continuity plan following a major disaster at or near our corporate facility could adversely affect our business .
Our risks are heightened because of our single retail distribution facility and our potential inability or failure to execute on a comprehensive business continuity plan following a major disaster at or near our corporate facility could adversely affect our business. 20 Table of Contents The majority of our retail inventory is shipped into, stored at and shipped out of a single warehouse located in Lebanon, Tennessee.
Such transition in our executive management team may divert the attention of management or otherwise be disruptive to our business. 23 Table of Contents We may pursue strategic investments or initiatives now or in the future, which may not yield their expected benefits, resulting in a loss of some or all of our investment.
We have experienced and may continue to experience challenges in recruiting and retaining team members in various locations. We may pursue strategic investments or initiatives now or in the future, which may not yield their expected benefits, resulting in a loss of some or all of our investment.
These risks may be exacerbated in the future as some climatologists predict that the long-term effects of climate change may result in more severe, volatile weather.
These risks may be exacerbated in the future as some climatologists predict that the long-term effects of climate change may result in more severe, volatile weather. Our current insurance programs may expose us to unexpected costs, which could have a material adverse effect on our financial condition and results of operations.
A natural disaster or public health crisis (such as the COVID-19 pandemic) affecting either of these warehouses or their personnel and operations could materially adversely affect our business. Additionally, our corporate systems and processes and support for our restaurant and retail operations are centralized on one campus in Tennessee.
All of the decorative fixtures used in our stores are shipped into, stored at and shipped out of a separate warehouse that is also located in Lebanon, Tennessee. A natural disaster or public health crisis (such as the COVID-19 pandemic) affecting either of these warehouses or their personnel and operations could materially adversely affect our business.
Conversely, if we underestimate demand for our merchandise we may experience inventory shortages resulting in lost revenues. Inventory shrinkage may also result in lost revenues.
Conversely, if we underestimate demand for our merchandise we may experience inventory shortages resulting in lost revenues. Inventory shrinkage may also result in lost revenues. Any of these factors could have an adverse effect on our results of operations, cash flows from operations and our financial condition.
Certain provisions in the Notes and the indenture governing the Notes could make a third party attempt to acquire us more difficult or expensive. For example, if a takeover constitutes a fundamental change, then noteholders will have the right to require us to repurchase their Notes for cash.
Provisions in the indenture governing the Notes could delay or discourage a takeover of us. 18 Table of Contents Certain provisions in the Notes and the indenture governing the Notes could make a third party attempt to acquire us more difficult or expensive.
We can provide no assurances as to the financial stability or viability of any of the hedge counterparties. 17 Table of Contents Conversion of the Notes or exercise of the warrants evidenced by the warrant transactions may dilute the ownership interest of existing shareholders, including noteholders who have previously converted their Notes.
Conversion of the Notes or exercise of the warrants evidenced by the warrant transactions may dilute the ownership interest of existing shareholders, including noteholders who have previously converted their Notes. 19 Table of Contents At our election, if applicable, we may settle Notes tendered for conversion partly in shares of our common stock.
Our dependence on single-source suppliers subjects us to the possible risks of shortages, interruptions and price fluctuations, and possible litigation when we change vendors because of performance issues.
In some cases, we may have only one supplier for a product or service, which subjects us to the possible risks of shortages, interruptions and price fluctuations, and possible litigation when we change vendors because of performance issues.
There also has been increasing focus by U.S. and foreign governmental authorities on environmental matters, such as climate change, the reduction of greenhouse gases and water consumption. This increased focus may lead to new initiatives directed at regulating an as yet unspecified array of environmental matters.
Compliance with these laws and regulations can be costly and can increase our exposure to litigation or governmental investigations or proceedings. There also has been increasing focus by U.S. and foreign governmental authorities on environmental matters, such as climate change, the reduction of greenhouse gases and water consumption.
These actions and proceedings may involve allegations of illegal, unfair or inconsistent employment practices, including wage and hour violations and employment discrimination; guest discrimination; food safety issues, including poor food quality, food-borne illness, food tampering, food contamination, and adverse health effects from consumption of various food products or high-calorie foods (including obesity); other personal injury, including claims related to COVID-19; violation of “dram shop” laws; trademark and patent infringement; violation of the federal securities laws; or other concerns.
These actions and proceedings may involve allegations of illegal, unfair or inconsistent employment practices, guest discrimination; food safety issues; personal injury claims; violation of “dram shop” laws; trademark and patent infringement; violation of the federal securities laws; or other concerns. The outcome of litigation, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify.
Changes in demand for over-the-road transportation and distribution services could cause volatility, increase our costs and adversely affect our operating margins. In addition, the prices of our retail merchandise are similarly impacted by economic and inflationary pressures, which have caused and may continue to cause higher costs and lower margins.
In addition, the prices of our retail merchandise are similarly impacted by economic and inflationary pressures, which have caused and may continue to cause higher costs and lower margins. Our attempts to offset cost pressures, such as through menu price increases and operational improvements, may not be successful.
In addition, we are subject to certain provisions of Tennessee law that limit, in some cases, our ability to engage in certain business combinations with significant shareholders. In addition, we have adopted a shareholder rights plan, which provides, among other things, that when specified events occur, our shareholders will be entitled to purchase from us shares of junior preferred stock.
In addition, we are subject to certain provisions of Tennessee law that limit, in some cases, our ability to engage in certain business combinations with significant shareholders.
As minimum wage rates increase, we may need to increase not only the wages of our minimum wage employees but also the wages paid to employees at wage rates that are above minimum wage. If competitive pressures or other factors prevent us from offsetting increased labor costs by increases in prices, our profitability may decline.
Increases in minimum wage levels and changes to the tip credit have been made and continue to be proposed at both federal and state levels. 25 Table of Contents As minimum wage rates increase, we may need to increase not only the wages of our minimum wage employees but also the wages paid to employees at wage rates that are above minimum wage.
In addition, customers and employees have a high expectation that we will adequately protect their personal information. For example, in connection with credit and debit card sales, we transmit confidential card information.
Compliance with these requirements may result in cost increases due to necessary system changes and the development of new administrative processes. 21 Table of Contents In addition, customers and employees have a high expectation that we will adequately protect their personal information, including confidential card information.
Failure to achieve or sustain these plans could adversely affect our results of operations. We have had, and expect to continue to have, priorities and initiatives in various stages of testing, evaluation and implementation, upon which we expect to improve our results of operations and financial condition.
In 2024, we announced a strategic transformation plan to enhance our menu and retail offerings, support our brand, improve operating margins and improve the efficiencies and effectiveness of our operations. Failure to achieve or sustain these plans could adversely affect our results of operations.
It is possible that our focus on these priorities and initiatives and constantly changing consumer preferences could cause unintended changes to our current results of operations. Additionally, many of these initiatives are inherently risky and uncertain in their application to our business in general, even when tested successfully on a more limited scale.
Implementation of these initiatives across our store base is inherently risky even when initiatives have been tested successfully on a more limited scale, and customers may not be receptive to these changes, which may negatively impact our financial condition and results of operations.
Removed
The strength of our revenues and results of operations are dependent upon, among other things, the price and availability of food, ingredients, retail merchandise, transportation, distribution, labor and utilities . In fiscal 2023, we faced significant inflationary pressures.
Added
Changes in global demand for corn, wheat and dairy products have caused and could continue to cause volatility in the feed costs for poultry and livestock. Operating margins for our restaurants are subject to changes in the price and availability of food commodities, including beef, pork, chicken, dairy and produce.

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Item 2. Properties

Properties — owned and leased real estate

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We also lease 105,000 square feet located in Mount Juliet, Tennessee that is used for overflow storage for retail merchandise and supplies. We lease office space for our MSBC headquarters which consists of approximately 15,000 square feet.
We also lease 105,000 square feet located in Mount Juliet, Tennessee that is used for overflow storage for retail merchandise and supplies. 31 Table of Contents We lease office space for our MSBC headquarters which consists of approximately 15,000 square feet.
See “Operations" and "Store Development" in Item 1 of this Annual Report on Form 10-K for additional information on our properties.
See “Operations” and “Store Development” in Item 1 of this Annual Report on Form 10-K for additional information on our properties.
In addition to the various corporate facilities, we have three owned properties for future development, a motel used for housing management trainees and for the general public, and four parcels of excess real property and improvements that we intend to sell. 27 Table of Contents In addition to the properties mentioned above, we own or lease the following store properties (including both our 661 Cracker Barrel Old Country Store locations and 59 locations for our MSBC locations) as of September 13, 2023: State Owned Leased State Owned Leased Tennessee 29 30 California 0 7 Florida 31 50 New Jersey 0 6 Texas 19 44 Kansas 3 2 Georgia 26 27 Wisconsin 5 0 North Carolina 17 27 Colorado 3 1 Kentucky 22 17 Massachusetts 0 4 Alabama 19 15 New Mexico 1 3 Ohio 22 12 Utah 4 0 Virginia 15 19 Idaho 2 1 Indiana 20 8 Iowa 3 0 South Carolina 13 15 Connecticut 1 1 Pennsylvania 8 17 Montana 2 0 Illinois 19 2 Nebraska 1 1 Missouri 13 4 Nevada 0 2 Michigan 12 3 Delaware 0 1 Arizona 2 12 Maine 0 1 Mississippi 9 4 Minnesota 1 0 Arkansas 5 7 New Hampshire 1 0 Louisiana 8 2 North Dakota 1 0 Maryland 3 6 Oregon 0 1 New York 8 1 Rhode Island 0 1 West Virginia 3 6 South Dakota 1 0 Oklahoma 6 2 358 362 We believe that our properties are suitable, adequate, well-maintained and sufficient for the operations contemplated.
In addition to the properties mentioned above, we own or lease the following store properties (including both our 658 Cracker Barrel Old Country Store locations and 68 locations for our MSBC locations) as of September 13, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ State Owned Leased State Owned Leased Tennessee ​ 29 ​ 30 ​ Oklahoma ​ 6 ​ 2 Florida 31 52 California 0 5 Texas 19 48 New Jersey 0 6 Georgia 26 27 Kansas 3 2 North Carolina 17 26 Wisconsin 5 0 Kentucky 22 17 Colorado 3 1 Ohio 22 14 Massachusetts 0 4 Virginia 15 20 New Mexico 1 3 Alabama 19 15 Utah 4 0 Indiana 20 8 Idaho 2 1 South Carolina 13 15 Iowa 3 0 Pennsylvania 8 17 Nevada 0 3 Illinois 19 2 Connecticut 1 1 Missouri 13 4 Montana 2 0 Michigan 12 3 Nebraska 1 1 Arizona 2 12 Delaware 0 1 Mississippi 9 4 Maine 0 1 Arkansas 5 7 Minnesota 1 0 Louisiana 8 2 New Hampshire 1 0 Maryland 3 6 North Dakota 1 0 New York 8 1 Rhode Island 0 1 West Virginia 3 6 South Dakota 1 0 ​ ​ ​ ​ ​ 358 368 ​ We believe that our properties are suitable, adequate, well-maintained and sufficient for the operations contemplated.
Added
In addition to the various corporate facilities, we have two owned properties for future development, a motel used for housing management trainees and for the general public, and four parcels of excess real property and improvements that we intend to sell.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Pursuant to Instruction to Item 401 of Regulation S‑K and General Instruction G(3) to Form 10‑K, the following information is included in Part I of this Form 10‑K.
Pursuant to Instruction to Item 401 of Regulation S ‑ K and General Instruction G(3) to Form 10 ‑ K, the information regarding legal proceedings is included in Part I of this Form 10 ‑ K.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Prior to joining us, he worked at Marriott International for over 30 years where he served in a number of finance and technology executive positions, including Senior Vice President of Lodging Finance, Senior Vice President of Global Revenue Management and his most recent role as Global Chief Information Officer. Ms.
Prior to joining us, he worked at Marriott International for over 30 years where he served in a number of finance and technology executive positions, including Senior Vice President of Lodging Finance, Senior Vice President of Global Revenue Management and his most recent role as Global Chief Information Officer. Ms. Moore joined us in July 2024 in her current position.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 28 Table of Contents Information about Our Executive Officers The following table sets forth certain information concerning our executive officers: Name Age Position with the Company Sandra B. Cochran* 65 President and Chief Executive Officer Julie F. Masino* 52 Chief Executive Officer - Elect Craig A.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 32 Table of Contents Information about Our Executive Officers The following table sets forth certain information concerning our executive officers: Name Age Position with the Company ​ ​ ​ ​ ​ Julie Masino ​ 53 ​ President and Chief Executive Officer ​ ​ ​ ​ ​ Laura A.
Daily has been employed with us as Senior Vice President, Retail since May 2012. Prior to May 2012, she served as Vice President for Ballard Designs, an internet and catalog home furnishings retailer that is part of HSN, Inc., where she was in charge of all merchandising and trends for the company.
Prior to May 2012, she served as Vice President for Ballard Designs, an internet and catalog home furnishings retailer that is part of HSN, Inc., where she was in charge of all merchandising and trends for the company. She has over 30 years of experience as a merchant with a number of retail organizations. Mr.
From 2017 to 2021, she served in various capacities in both operations and home office functions including Regional Vice President of Restaurant Operations and Vice President of Culinary. Ms. Spillyards-Schaefer has over 20 years of experience in the restaurant industry. Mr. Wolfson has been employed with us in his current capacity since July 2017.
Spillyards-Schaefer has been employed with us since 2017 and assumed her current position in January 2022. From 2017 to 2021, she served in various capacities in both operations and home office functions including Regional Vice President of Restaurant Operations from 2021 to 2022 and Vice President of Culinary from 2017 to 2021. Ms.
Prior to January 2023, he served as the Chief Supply Chain Officer for Restaurant Growth Services. Prior to that, he was with The Cheesecake Factory and Bloomin’ Brands, where he led global procurement, logistics and international supply chain teams. He has over 30 years of supply chain experience. 29 Table of Contents Ms.
Prior to January 2023, he served as the Chief Supply Chain Officer for Restaurant Growth Services from 2021 to 2023 and Senior Vice President for Restaurant Growth Services, Supply Chain from 2018 to 2021. Prior to that, he was with The Cheesecake Factory and Bloomin’ Brands, where he led global procurement, logistics and international supply chain teams.
From 2002 to 2014, Ms. Masino served in various leadership roles at Starbucks Corporation. Ms. Masino has over 20 years of experience in the restaurant industry. Mr. Pommells has been employed with us since December 2021 in his current capacity.
From 2002 to 2014, Ms. Masino served in various leadership roles at Starbucks Corporation. Ms. Masino has over 20 years of experience in the restaurant industry. Ms. Daily has been employed with us as Senior Vice President, Retail since May 2012.
From October 2020 to December 2021, he served as Executive Vice President and Chief Financial Officer of Red Lobster Seafood Company. Prior to serving as Chief Financial Officer of Red Lobster Seafood Company, he served as Senior Vice President, Finance and Strategy from January 2015 to October 2020.
Prior to serving as Chief Financial Officer of Red Lobster Seafood Company, he served as Senior Vice President, Finance and Strategy from January 2015 to October 2020. Prior to Red Lobster, he spent more than ten years with Darden Restaurants in various finance and business analytics roles. Mr.
Cochran has 29 years of experience in the retail industry and fourteen years of experience in the restaurant industry. Ms. Masino joined us in August 2023 as Chief Executive Officer – Elect. Prior to joining us, she served as President, International of Taco Bell, a subsidiary of Yum! Brands from January 2020 to June 2023.
Masino joined us as Chief Executive Officer-Elect in August 2023 and assumed her current position of President and Chief Executive Officer in November 2023, when she also became a member of our Board of Directors. Prior to joining us, she served as President, International of Taco Bell, a subsidiary of Yum! Brands from January 2020 to June 2023.
From January 2006 to April 2017, he served as Vice President, General Counsel and Corporate Secretary at CLARCOR Inc., an industrial company. From 2001 to 2006, he was a partner of the InterAmerican Group, an advisory services and private equity firm. Mr. Wolfson has over 30 years of legal experience. Mr.
He has over 30 years of supply chain experience. ​ Mr. Wolfson has been employed with us in his current capacity since July 2017. From January 2006 to April 2017, he served as Vice President, General Counsel and Corporate Secretary at CLARCOR Inc., an industrial company.
Prior to Red Lobster, he spent more than ten years with Darden Restaurants in various finance and business analytics roles. Mr. Pommells has more than 20 years of experience in the restaurant industry. Mr. Spurgin joined us in January 2023 as Senior Vice President, Chief Restaurant Supply Chain Officer.
Spillyards-Schaefer has over 20 years of experience in the restaurant industry. ​ Mr. Spurgin joined us in January 2023 as Senior Vice President, Chief Restaurant Supply Chain Officer.
Cochran). Ms. Masino will assume the role of President and Chief Executive Officer effective as of November 1, 2023. The following information summarizes the business experience of each of our executive officers for at least the past five years: Ms.
Wolfson ​ 58 ​ Senior Vice President, General Counsel and Corporate Secretary ​ ​ ​ ​ ​ Brian T. Vaclavik ​ 58 ​ Vice President, Corporate Controller and Principal Accounting Officer ​ The following information summarizes the business experience of each of our executive officers for at least the past five years: Ms.
Before joining us, she practiced law for ten years, most recently as a partner focused on commercial litigation and employment law. PART II
Prior to her current role, she held other positions in the human resources and legal departments including Vice President of Human Resources from 2018 to 2020. Before joining us, she practiced law for ten years, most recently as a partner focused on commercial litigation and employment law. Ms.
Pommells 48 Senior Vice President and Chief Financial Officer and Principal Accounting Officer J. Mark Spurgin 55 Senior Vice President, Chief Restaurant Supply Chain Officer Laura A. Daily 59 Senior Vice President, Retail Cammie Spillyards-Schaefer 46 Senior Vice President, Operations Richard M. Wolfson 57 Senior Vice President, General Counsel and Secretary Bruce A.
Roberts ​ 49 ​ Senior Vice President, Chief Human Resources Officer ​ ​ ​ ​ ​ Cammie Spillyards-Schaefer ​ 47 ​ Senior Vice President, Restaurant and Retail Operations ​ ​ ​ ​ ​ J. Mark Spurgin ​ 56 ​ Senior Vice President, Chief Restaurant Supply Chain Officer ​ ​ ​ ​ ​ Richard M.
She has over 29 years of experience as a merchant with a number of retail organizations. Ms. Spillyards-Schaefer has been employed with us since 2017 and assumed her current position in January 2022.
Pommells has more than 20 years of experience in the restaurant industry and two years of experience in the retail industry. Ms. Roberts has been employed with us since 2012 and assumed her current position in May 2020.
Removed
Hoffmeister 62 Senior Vice President, Chief Information Officer Donna L. Roberts 48 Senior Vice President and Chief Human Resources Officer *As previously announced, Ms.
Added
Daily ​ 60 ​ Senior Vice President, Chief Merchant and Retail Supply Chain ​ ​ ​ ​ ​ Christopher B. Edwards ​ 51 ​ Senior Vice President, Chief Strategy Officer ​ ​ ​ ​ ​ Bruce A. Hoffmeister ​ 63 ​ Senior Vice President, Chief Information Officer ​ ​ ​ ​ ​ Sarah O.
Removed
Cochran will step down as President and Chief Executive Officer effective November 1, 2023 and will continue her service on the Company’s Board of Directors as Executive Chair through her retirement from the Company as of September 30, 2024 (or such earlier date that the Board of Directors of the Company may determine upon 30 days’ prior written notice to Ms.
Added
Moore ​ 41 ​ Senior Vice President, Chief Marketing Officer ​ ​ ​ ​ ​ Craig A. Pommells ​ 49 ​ Senior Vice President and Chief Financial Officer ​ ​ ​ ​ ​ Donna L.
Removed
Cochran has been employed with us since 2009 and assumed her current position as President and Chief Executive Officer in September 2011, when she also became a member of our Board of Directors. Prior to September 2011, Ms.
Added
Edwards joined us in March 2024 in his current position. Prior to joining us, he served as Chief Strategy Officer at Canopy Growth Corporation from 2020 to 2023. Prior to his service at Canopy Growth Corporation, he served in various capacities including Senior Vice President of Strategy at Constellation Brands from 2010 to 2020.
Removed
Cochran served as our President and Chief Operating Officer since November 2010 and as our Executive Vice President and Chief Financial Officer from April 2009 to November 2010. Before joining us in April 2009, she was the Chief Executive Officer of Books-A-Million, Inc. Ms.
Added
Prior to Constellation Brands, he served as a Principal at The Boston Consulting Group from 2001 to 2009. He has over 20 years of experience in serving as a strategy leader. 33 Table of Contents ​ Mr. Hoffmeister joined us in January 2021 as Senior Vice President and Chief Information Officer.
Removed
Hoffmeister joined us in January 2021 as Senior Vice President and Chief Information Officer.
Added
Prior to joining us, she served in various capacities including Senior Vice President of Marketing at MGM Resorts International from 2012 to 2024, including most recently Senior Vice President of Marketing from 2021 to 2024 and Vice President Brand Marketing from 2019 to 2021. She has nearly 20 years of hospitality experience. ​ Mr.
Removed
Roberts has been employed with us since 2012 and assumed her current position in May 2020. Prior to her current role, she held other positions in the human resources and legal departments including Vice President of Human Resources and Vice President and Deputy General Counsel.
Added
Pommells has been employed with us since December 2021 in his current capacity. From October 2020 to December 2021, he served as Executive Vice President and Chief Financial Officer of Red Lobster Seafood Company.
Added
From 2001 to 2006, he was a partner of the InterAmerican Group, an advisory services and private equity firm. Mr. Wolfson has over 30 years of legal experience. Mr. Vaclavik joined us in October 2023 as Vice President and Controller and assumed his current position in November 2023.
Added
Prior to joining us, he most recently served as Vice President – Controller of Access TeleCare, Inc. from July 2022 until May 2023.
Added
From April 2021 until July 2022, he served as Vice President, Controller and Chief Accounting Officer of Tuesday Morning Corporation, and from February 2021 until April 2021, he served as a consultant for Passion 4 People Consulting, LLC. He served as Senior Vice President and Chief Accounting Officer of Tailored Brands, Inc. from June 2014 until April 2020. Mr.
Added
Vaclavik has over 20 years of experience in the retail industry. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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See the table labeled “Equity Compensation Plan Information” to be contained in the 2023 Proxy Statement, incorporated by reference in Part III, Item 12 of this Annual Report on Form 10-K. Part III, Item 12 of this Annual Report on Form 10-K is incorporated herein by this reference.
See the table labeled “Equity Compensation Plan Information” to be contained in the 2024 Proxy Statement, incorporated by reference in Part III, Item 12 of this Annual Report on Form 10-K. Part III, Item 12 of this Annual Report on Form 10-K is incorporated herein by this reference.
Unregistered Sales of Equity Securities There were no equity securities sold by the Company during the period covered by this Annual Report on Form 10-K that were not registered under the Securities Act of 1933, as amended. Issuer Purchases of Equity Securities We did not repurchase any shares of our common stock in the fourth quarter ended July 28, 2023.
Unregistered Sales of Equity Securities There were no equity securities sold by the Company during the period covered by this Annual Report on Form 10-K that were not registered under the Securities Act of 1933, as amended. Issuer Purchases of Equity Securities We did not repurchase any shares of our common stock in the fourth quarter ended August 02, 2024.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “CBRL.” There were 6,615 shareholders of record as of September 13, 2023. See Note 4 to Consolidated Financial Statements with respect to dividend restrictions.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “CBRL.” There were 6,229 shareholders of record as of September 13, 2024. 34 Table of Contents See Note 4 to Consolidated Financial Statements with respect to dividend restrictions.
On June 2, 2022, our Board of Directors approved the repurchase of up to $200,000 of our common stock with such authorization to expire on June 2, 2023. On June 2, 2023, our Board of Directors extended this repurchase authorization for an additional year.
On June 02, 2023, our Board of Directors renewed our authorization to repurchase up to $200,000 of our common stock for an additional year; this authorization expired on June 02, 2024. ITEM 6. RESERVED

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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In general, we believe that the geographic dispersion of our stores and multiple sources of distribution adequately mitigate the potential impact of severe weather and changing weather patterns on our stores, but our Board of Directors and management team continually monitor and reexamine these considerations in light of ongoing trends.
In general, we believe that the geographic dispersion of our stores and multiple sources of distribution adequately mitigate the potential impact of severe weather and changing weather patterns on our stores, but the Board of Directors and management team continually monitor and reexamine these considerations in light of ongoing trends.
Because of our gift shop, which has a lower product turnover than the restaurant, we carry larger inventories than many other companies in the restaurant industry. Retail inventories are generally financed through trade credit at terms of 60 days or less. These various trade terms are aided by rapid turnover of the restaurant inventory.
Because of our retail gift shop, which has a lower product turnover than the restaurant, we carry larger inventories than many other companies in the restaurant industry. Retail inventories are generally financed through trade credit at terms of 60 days or less. These various trade terms are aided by rapid turnover of the restaurant inventory.
We believe these key performance indicators are useful for investors to provide a consistent comparison of sales results and trends across comparable periods within our core, established store base, unaffected by results of store openings, closings, and other transitional changes. 32 Table of Contents Restaurant and Retail Industries Our stores operate in both the restaurant and retail industries in the United States.
We believe these key performance indicators are useful for investors to provide a consistent comparison of sales results and trends across comparable periods within our core, established store base, unaffected by results of store openings, closings, and other transitional changes. 37 Table of Contents Restaurant and Retail Industries Our stores operate in both the restaurant and retail industries in the United States.
To calculate comparable store restaurant sales increase/(decrease), which we express as a percentage, we divide the absolute dollar change by the comparable store restaurant sales for the historical period. • Comparable store average restaurant sales : To calculate comparable store average restaurant sales, we determine total restaurant sales of stores open at least six full quarters before the beginning of the applicable period, measured on comparable calendar weeks, and divide by the number of comparable stores for the applicable period. • Comparable store retail sales increase/(decrease) : To calculate comparable store retail sales increase/(decrease), we determine total retail sales of stores open at least six full quarters before the beginning of the applicable period, measured on comparable calendar weeks.
To calculate comparable store retail sales increase/(decrease), which we express as a percentage, we divide the absolute dollar change by the comparable store retail sales for the historical period. ● Comparable store restaurant and retail sales increase/(decrease) : To calculate comparable store restaurant and retail sales increase/(decrease), we determine total restaurant and retail sales of stores open at least six full quarters before the beginning of the applicable period, measured on comparable calendar weeks.
This overview summarizes the MD&A, which includes the following sections: • Executive Overview – a general description of our business, the restaurant and retail industries, our strategic priorities and our key performance indicators. • Results of Operations – an analysis of our consolidated statements of income for the three years presented in our Consolidated Financial Statements. • Liquidity and Capital Resources – an analysis of our primary sources of liquidity, capital expenditures and material commitments. • Critical Accounting Estimates – a discussion of accounting policies that require critical judgments and estimates.
This overview summarizes the MD&A, which includes the following sections: ● Executive Overview – a general description of our business, the restaurant and retail industries, our strategic priorities and our key performance indicators. ● Results of Operations – an analysis of our consolidated statements of income presented in our Consolidated Financial Statements. ● Liquidity and Capital Resources – an analysis of our primary sources of liquidity, capital expenditures and material commitments. ● Critical Accounting Estimates – a discussion of accounting policies that require critical judgments and estimates.
Adverse economic conditions, such as elevated inflation, and higher unemployment rates affect consumer discretionary income and dining and shopping habits. Historically, interstate tourist traffic and the propensity to dine out have been much higher during the summer months, thereby contributing to higher profits in our fourth quarter.
Adverse economic conditions, such as elevated and/or volatile rates of inflation and unemployment adversely affect consumer discretionary income and dining and shopping habits. Historically, interstate tourist traffic and the propensity to dine out have been much higher during the summer months, thereby contributing to higher profits in our fourth quarter.
Because of the uncertainties of seasonal demands and promotional calendar changes, our best estimate of usage for food, supplies and other operating needs and services is ratably over either the notice period or the remaining life of the contract, as applicable, unless we had better information available at the time related to each contract.
Because of the uncertainties of seasonal demands and promotional calendar changes, our estimated usage for food, supplies and other operating needs and services is calculated ratably over either the termination notice period or the remaining life of the contract, as applicable, unless we had better information available at the time related to each contract.
EXECUTIVE OVERVIEW Cracker Barrel Old Country Store, Inc. (the “Company,” “our” or “we”) is a publicly traded (Nasdaq: CBRL) company that, through its operations and those of certain subsidiaries, is principally engaged in the operation and development of the Cracker Barrel Old Country Store® (“Cracker Barrel”) concept. Each Cracker Barrel store consists of a restaurant with a gift shop.
(the “Company,” “our” or “we”) is a publicly traded (Nasdaq: CBRL) company that, through its operations and those of certain subsidiaries, is principally engaged in the operation and development of the Cracker Barrel Old Country Store® (“Cracker Barrel”) concept. Each Cracker Barrel store consists of a restaurant with a gift shop. The restaurants serve breakfast, lunch and dinner.
Additionally, during 2023, we incurred costs of $2,307 in connection with the closure of six Cracker Barrel and four MSBC locations because of poor operating performance.
Additionally, during 2024 and 2023, we incurred costs of $5,494 and $2,307, respectively, in connection with the closure of four Cracker Barrel and two MSBC locations in 2024 and six Cracker Barrel and four MSBC locations in 2023 because of poor operating performance.
To calculate comparable restaurant guest traffic increase/(decrease), which we express as a percentage, we divide the absolute numerical change by the total entrees sold for the historical period. • Average check increase per guest : To calculate average check per guest, we determine comparable store restaurant sales, as described above, and divide by comparable guest traffic, as described above.
To calculate comparable store restaurant and retail sales increase/(decrease), which we express as a percentage, we divide the absolute dollar change by the comparable store restaurant and retail sales for the historical period. ● Average check increase per guest : To calculate average check per guest, we determine comparable store restaurant sales, as described above, and divide by comparable restaurant guest traffic, as described below.
Under the 2022 Revolving Credit Facility, provided there is no default existing and the total of our availability under the 2022 Revolving Credit Facility plus our cash and cash equivalents on hand is at least $100,000 (the “Cash Availability”), we may declare and pay cash dividends on shares of our common stock and repurchase shares of our common stock (1) in an unlimited amount if at the time the dividend or the repurchase is made our consolidated total senior secured leverage ratio is 2.75 to 1.00 or less and (2) in an aggregate amount not to exceed $100,000 in any fiscal year if our consolidated total leverage ratio is greater than 2.75 to 1.00 at the time the dividend or repurchase is made; notwithstanding (1) and (2), so long as immediately after giving effect to the payment of any such dividends, Cash Availability is at least $100,000, we may declare and pay cash dividends on shares of our common stock in an aggregate amount not to exceed in any fiscal year the product of the aggregate amount of dividends declared in the fourth quarter of the immediately preceding fiscal year multiplied by four. 41 Table of Contents In 2023, we paid regular dividends of $5.20 per share and declared a dividend of $1.30 per share that was subsequently paid on August 8, 2023 to shareholders of record on July 21, 2023.
Under the 2022 Revolving Credit Facility, provided there is no default existing and the total of our availability under the 2022 Revolving Credit Facility plus our cash and cash equivalents on hand is at least $100,000 (the “Cash Availability”), we may declare and pay cash dividends on shares of our common stock and repurchase shares of our common stock (1) in an unlimited amount if at the time the dividend or the repurchase is made our consolidated total senior secured leverage ratio is 2.75 to 1.00 or less and (2) in an aggregate amount not to exceed $100,000 in any fiscal year if our consolidated total leverage ratio is greater than 2.75 to 1.00 at the time the dividend or repurchase is made; notwithstanding (1) and (2), so long as immediately after giving effect to the payment of any such dividends, Cash Availability is at least $100,000, we may declare and pay cash dividends on shares of our common stock in an aggregate amount not to exceed in any fiscal year the product of the aggregate amount of dividends declared in the fourth quarter of the immediately preceding fiscal year multiplied by four.
We record a liability for the self-insured portion of our group health program for all unpaid claims based upon a loss development analysis derived from actual group health claims payment experience. We also record a liability for unpaid prescription drug claims based on historical experience.
Benefits for any individual (employee or dependents) in the self-insured group health program are limited. We record a liability for the self-insured portion of our group health program for all unpaid claims based upon a loss development analysis derived from actual group health claims payment experience. We also record a liability for unpaid prescription drug claims based on historical experience.
However, actual obsolescence or shrinkage recorded may produce materially different amounts than we have estimated. Lease Accounting We have ground leases for our leased stores and office space leases that are recorded as operating leases under various non-cancellable operating leases.
However, actual obsolescence or shrinkage recorded may produce materially different amounts than we have estimated. Lease Accounting We have ground leases for our leased stores and office space leases that are recorded as operating leases under various non-cancellable operating leases. Additionally, we lease our retail distribution center, advertising billboards, vehicle fleets, and certain equipment under various non-cancellable operating leases.
Provision for Income Taxes The following table highlights the provision for income taxes as a percentage of income before income taxes (“effective tax rate”) for the past three years: 2023 2022 2021 Effective tax rate 4.4 % 8.0 % 18.0 % Our effective tax rate is lower than statutory rates primarily due to the benefit of tax credits.
Provision for Income Taxes (Income Tax Benefit) The following table highlights the provision for income taxes as a percentage of income before income taxes (“effective tax rate”) for the past two years: ​ ​ ​ ​ ​ ​ ​ 2024 2023 Effective tax rate ​ (69.2) % 4.4 % ​ Our effective tax rate is lower than statutory rates primarily due to the benefit of tax credits.
Strategic Priorities Management believes that the Cracker Barrel brand remains one of the strongest and most differentiated brands in the restaurant industry, and we plan to continue to leverage and build on that strength as a core component of our business strategy.
As of September 13, 2024, the Company operated 68 MSBC locations in ten states. Strategic Priorities Management believes that the Cracker Barrel brand remains one of the strongest and most differentiated brands in the restaurant industry, and we plan to continue to leverage and build on that strength as a core competitive component of our business strategy.
We believe that cash at July 28, 2023, along with cash expected to be generated from our operating activities and the borrowing capacity under our revolving credit facility, will be sufficient to finance our continuing operations, our continuing expansion plans, debt service, dividend payments and working capital needs for the next twelve months.
We believe that cash at August 02, 2024, along with cash expected to be generated from our operating activities and the borrowing capacity under our revolving credit facility, will be sufficient to finance our continuing operations, our strategic transformation initiative and continuing expansion plans, debt service, dividend payments, capital expenditures and working capital needs for the next twelve months and thereafter for the foreseeable future.
To calculate comparable store retail sales increase/(decrease), which we express as a percentage, we divide the absolute dollar change by the comparable store retail sales for the historical period. • Comparable store retail average weekly sales : To calculate comparable store average retail sales, we determine total retail sales of stores open at least six full quarters before the beginning of the applicable period, measured on comparable calendar weeks, and divide by the number of comparable stores for the applicable period. • Comparable restaurant guest traffic increase/(decrease) : To calculate comparable restaurant guest traffic increase/(decrease), we determine the number of entrees sold in our dine-in and off-premise business from stores open at least six full quarters at the beginning of the applicable period, measured on comparable calendar weeks.
The absolute dollar change is divided by the prior year average check number to calculate average check increase per guest, which we express as a percentage. ● Comparable restaurant guest traffic increase/(decrease) : To calculate comparable restaurant guest traffic increase/(decrease), we determine the number of entrees sold in our dine-in and off-premise business from stores open at least six full quarters at the beginning of the applicable period, measured on comparable calendar weeks.
We also monitor actual claims development, including incurrence or settlement of individual large claims during the interim periods between actuarial studies as another means of estimating the adequacy of our reserves. Our group health plans combine the use of self-insured and fully-insured programs. Benefits for any individual (employee or dependents) in the self-insured group health program are limited.
We also monitor actual claims development, including incurrence or settlement of individual large claims during the interim periods between actuarial studies as another means of estimating the adequacy of our reserves. 48 Table of Contents Our group health plans combine the use of self-insured and fully-insured programs.
The following table highlights the dividends per share we paid for the last three years: 2023 2022 2021 Dividends per share paid $ 5.20 $ 4.90 $ 1.30 Our criteria for share repurchases are that they be accretive to expected net income per share and are within the limits imposed by our debt commitments.
The following table highlights the dividends per share we paid for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Dividends per share paid ​ $ 5.20 ​ $ 5.20 ​ Our criteria for share repurchases are that they be accretive to expected net income per share and are within the limits imposed by our debt commitments.
(c) Our $300,000 aggregate principal amount of 0.625% Convertible Senior Notes mature on June 15, 2026. The Notes bear cash interest at an annual rate of 0.625%, payable semi-annually in arrears on June 15 and December 15 of each year.
Our $300,000 aggregate principal amount of 0.625% Convertible Senior Notes (the “Notes”) mature on June 15, 2026, unless earlier converted, repurchased or redeemed. The Notes are senior, unsecured obligations of the Company and bear cash interest at an annual rate of 0.625%, payable semi-annually in arrears on June 15 and December 15 of each year.
The preparation of these financial statements requires us to make estimates and assumptions about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures.
CRITICAL ACCOUNTING ESTIMATES We prepare our Consolidated Financial Statements in conformity with GAAP. The preparation of these financial statements requires us to make estimates and assumptions about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures.
Capital Expenditures and Proceeds from Sale of Property and Equipment The following table presents our capital expenditures (purchase of property and equipment), net of proceeds from insurance recoveries, for the last three years: 2023 2022 2021 Capital expenditures, net of proceeds from insurance recoveries $ 125,387 $ 97,104 $ 70,130 Our capital expenditures consisted primarily of capital investments for existing stores, new store locations and strategic initiatives.
Capital Expenditures and Proceeds from Sale of Property and Equipment The following table presents our capital expenditures (purchase of property and equipment), net of proceeds from insurance recoveries, for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Capital expenditures, net of proceeds from insurance recoveries ​ $ 127,461 ​ $ 125,387 ​ Our capital expenditures consisted primarily of capital investments for existing stores, new store locations and strategic initiatives.
Our internally generated cash, along with cash on hand at July 29, 2022 and borrowings under our revolving credit facility, were sufficient to finance all of our growth, share repurchases, dividend payments, working capital needs, interest payments on long-term debt obligations and other cash payment obligations in 2023.
Our cash generated from our operations, together with our borrowing capacity under our 2022 Revolving Credit Facility, were sufficient to finance all of our growth, dividend payments, working capital needs, interest payments on long-term debt obligations and other cash payment obligations in 2024.
The following table presents our proceeds from sale of property and equipment for the last three years: 2023 2022 2021 Proceeds from sale of property and equipment $ 1,068 $ 105 $ 149,960 The increase in proceeds from sale of property and equipment in 2023 from 2022 resulted primarily from the sale of excess real property in 2023.
The following table presents our proceeds from sale of property and equipment for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Proceeds from sale of property and equipment ​ $ 3,134 ​ $ 1,068 The increase in proceeds from sale of property and equipment in 2024 from 2023 resulted primarily from the sale of excess real property in 2024.
Our standby letters of credit reduce our borrowing availability under the 2022 Revolving Credit Facility. During 2023, we borrowed $180,000 and repaid $190,000 under the 2022 Revolving Credit Facility. During 2022, in addition to the refinancing of the revolving credit facility, we borrowed $100,000 and repaid $55,000 of borrowings under the 2019 Revolving Credit Facility.
Our standby letters of credit reduce our borrowing availability under the 2022 Revolving Credit Facility. During 2024, we borrowed $406,500 and repaid $346,500 under the 2022 Revolving Credit Facility. During 2023, we borrowed $180,000 and repaid $190,000 under the 2022 Revolving Credit Facility.
We then subtract average check per guest for the current year period from average check per guest for the applicable historical period to calculate the absolute dollar change. The absolute dollar change is divided by the prior year average check number to calculate average check increase per guest, which we express as a percentage.
We then subtract average check per guest for the current year period from average check per guest for the applicable historical period to calculate the absolute dollar change.
During 2021, we repaid $924,395 under the 2019 Revolving Credit Facility and borrowed an additional $60,000 under the 2019 Revolving Credit Facility. Our 2022 Revolving Credit Facility contains customary financial covenants, which include maintenance of a maximum consolidated total senior secured leverage ratio and a minimum consolidated interest coverage ratio.
Our 2022 Revolving Credit Facility contains customary financial covenants, which include maintenance of a maximum consolidated total senior secured leverage ratio and a minimum consolidated interest coverage ratio.
The restaurants serve breakfast, lunch and dinner. The gift shop offers a variety of decorative and functional items specializing in rocking chairs, holiday gifts, toys, apparel and foods. As of September 13, 2023, the Company operated 661 Cracker Barrel stores located in 45 states.
The gift shop offers a variety of decorative and functional items specializing in rocking chairs, holiday gifts, toys, apparel and foods. As of September 13, 2024, the Company operated 658 Cracker Barrel stores located in 44 states. The Company also owns Maple Street Biscuit Company (“MSBC”), a breakfast and lunch fast casual concept.
The reserves and losses in the actuarial study represent a range of possible outcomes within which no given estimate is more likely than any other estimate. As such, we record the losses in the lower half of that range and discount them to present value using a risk-free interest rate based on projected timing of payments.
As such, we record the losses in the lower half of that range and discount them to present value using a risk-free interest rate based on projected timing of payments.
At this time, we are unable to make a reasonably reliable estimate of the amounts and timing of payments in individual years because of uncertainties in the timing of the effective settlement of tax positions. As such, the liability for uncertain tax positions of $17,572 is not included in the contractual cash obligations and commitments table above.
At this time, we are unable to make a reasonably reliable estimate of the amounts and timing of payments in individual years because of uncertainties in the timing of the effective settlement of tax positions.
We then subtract total entrees sold for the current year period from total entrees sold for the applicable historical period to calculate the absolute numerical change.
We then subtract total comparable store restaurant and retail sales for the current year period from total comparable store retail sales for the applicable historical period to calculate the absolute dollar change.
We consider the following accounting estimates to be most critical in understanding the judgments that are involved in preparing our Consolidated Financial Statements: • Impairment of Long-Lived Assets • Insurance Reserves • Retail Inventory Valuation • Lease Accounting Management has reviewed these critical accounting estimates and related disclosures with the Audit Committee of our Board of Directors.
Critical accounting estimates are those that: ● management believes are most important to the accurate portrayal of both our financial condition and operating results; and ● require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. 47 Table of Contents We consider the following accounting estimates to be most critical in understanding the judgments that are involved in preparing our Consolidated Financial Statements: ● Impairment of Long-Lived Assets ● Insurance Reserves ● Retail Inventory Valuation ● Lease Accounting Management has reviewed these critical accounting estimates and related disclosures with the Audit Committee of the Board of Directors.
These reserves and estimates of IBNR claims are based upon a full scope actuarial study which is performed annually at the end of our third quarter and is adjusted by the actuarially determined losses and actual claims payments for the fourth quarter. Additionally, we perform limited scope actuarial studies on a quarterly basis to verify and/or modify our reserves.
These reserves and estimates of IBNR claims are based upon a full scope actuarial study which is performed annually during the fourth quarter and is adjusted by the actuarially determined losses and actual claims payments made subsequent to this full scope actuarial study during the fourth quarter.
Additionally, during 2023, we continued our focus on generating shareholder returns by paying $5.20 per share in dividends for fiscal 2023 and declaring a dividend of $1.30 per share that was subsequently paid on August 8, 2023 to shareholders of record on July 21, 2023, totaling $144,302 dividends declared or paid in 2023, and repurchasing $17,449 in shares of our common stock. 31 Table of Contents Key Performance Indicators Management uses a number of key performance indicators to evaluate our operational and financial performance, including the following: • Comparable store restaurant sales increase/(decrease) : To calculate comparable store restaurant sales increase/(decrease), we determine total restaurant sales of stores open at least six full quarters before the beginning of the applicable period, measured on comparable calendar weeks.
The Board of Directors declared a dividend of $0.25 per share that was subsequently paid on August 06, 2024 to shareholders of record on July 19, 2024. 36 Table of Contents Key Performance Indicators Management uses a number of key performance indicators to evaluate our operational and financial performance, including the following: ● Comparable store restaurant sales increase/(decrease) : To calculate comparable store restaurant sales increase/(decrease), we determine total restaurant sales of stores open at least six full quarters before the beginning of the applicable period, measured on comparable calendar weeks.
The 2022 Revolving Credit Facility also contains an option for the Company to increase the revolving credit facility by $200,000. 40 Table of Contents The following table highlights our borrowing capacity and outstanding borrowings under the 2022 Revolving Credit Facility, our standby letters of credit and our borrowing availability under the 2022 Revolving Credit Facility as of July 28, 2023: July 28, 2023 Borrowing capacity under the 2022 Revolving Credit Facility $ 700,000 Less: Outstanding borrowings under the 2022 Revolving Credit Facility 120,000 Less: Standby letters of credit* 31,896 Borrowing availability under the 2022 Revolving Credit Facility $ 548,104 *Our standby letters of credit relate to securing reserved claims under workers’ compensation insurance and securing certain sale and leaseback transactions.
The following table highlights our borrowing capacity and outstanding borrowings under the 2022 Revolving Credit Facility, our standby letters of credit and our borrowing availability under the 2022 Revolving Credit Facility as of August 02, 2024: ​ ​ ​ ​ ​ August 02,2024 Borrowing capacity under the 2022 Revolving Credit Facility ​ $ 700,000 Less: Outstanding borrowings under the 2022 Revolving Credit Facility ​ 180,000 Less: Standby letters of credit* ​ 32,644 Borrowing availability under the 2022 Revolving Credit Facility ​ $ 487,356 ​ 45 Table of Contents *Our standby letters of credit relate to securing reserved claims under workers’ compensation insurance and securing certain sale and leaseback transactions.
The following table highlights labor and other related expenses as a percentage of total revenue for the past three years: 2023 2022 2021 Labor and other related expenses 35.1 % 35.2 % 34.8 % The year-to-year percentage change in 2023 as compared to 2022 resulted from the following: 2023 Compared to 2022 (Decrease) Increase as a Percentage of Total Revenue Employee health care expense (0.2 %) Store management compensation (0.1 %) Store hourly labor 0.2 % The decrease in employee health care expenses as a percentage of total revenue in 2023 as compared to 2022 resulted primarily from lower enrollment.
The following table highlights labor and other related expenses as a percentage of total revenue for the past two years: ​ ​ ​ ​ ​ ​ ​ 2024 2023 Labor and related expenses ​ 36.6 % 35.1 % ​ 40 Table of Contents The year-to-year percentage change in 2024 as compared to 2023 resulted primarily from the following: ​ ​ ​ ​ ​ ​ 2024 Compared to 2023 ​ ​ ​ Increase (Decrease) as a ​ ​ Percentage of Total Revenue Store hourly labor 1.1 % Store management compensation 0.3 % Employee health care expense 0.1 % Other wages (0.2) % ​ The increase in store hourly labor and store management compensation as a percentage of total revenue in 2024 as compared to 2023 resulted primarily from higher staffing levels and the investment of additional labor hours to improve the guest experience as well as wage inflation partially offset by higher average check.
Additionally, we lease our retail distribution center, advertising billboards, vehicle fleets, and certain equipment under various non-cancellable operating leases. 44 Table of Contents We evaluate our leases at contract inception to determine whether we have the right to control use of the identified asset for a period of time in exchange for consideration.
We evaluate our leases at contract inception to determine whether we have the right to control use of the identified asset for a period of time in exchange for consideration.
We presently expect our effective tax rate for 2024 to be approximately 6%. 38 Table of Contents LIQUIDITY AND CAPITAL RESOURCES The following table presents a summary of our cash flows for the last three years: 2023 2022 2021 Net cash provided by operating activities $ 250,457 $ 205,253 $ 301,903 Net cash provided by (used in) investing activities (124,319 ) (98,499 ) 78,330 Net cash used in financing activities (146,096 ) (206,242 ) (672,636 ) Net decrease in cash and cash equivalents $ (19,958 ) $ (99,488 ) $ (292,403 ) Our primary sources of liquidity are cash generated from our operations and our borrowing capacity under our revolving credit facility.
LIQUIDITY AND CAPITAL RESOURCES The following table presents a summary of our cash flows for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Net cash provided by operating activities ​ $ 168,980 ​ $ 250,457 Net cash used in investing activities ​ (124,327) ​ (124,319) Net cash used in financing activities ​ (57,765) ​ (146,096) Net decrease in cash and cash equivalents ​ $ (13,112) ​ $ (19,958) ​ 43 Table of Contents Our primary sources of liquidity are cash generated from our operations and our borrowing capacity under our revolving credit facility.
See Note 8 to the Consolidated Financial Statements for additional information regarding these sale and leaseback transactions. Impairment and Store Closing Costs During 2023, we recorded impairment charges of $11,692 as a result of the deterioration in operating performance of six Cracker Barrel locations.
Impairment and Store Closing Costs During 2024 and 2023, we recorded impairment charges of $17,448 and $11,692, respectively, as a result of the deterioration in operating performance of six Cracker Barrel locations and thirteen MSBC locations in 2024 and six Cracker Barrel locations in 2023.
Cost of Goods Sold (Exclusive of Depreciation and Rent) The following table highlights the components of cost of goods sold in dollar amounts for the past three years: 2023 2022 2021 Cost of Goods Sold: Restaurant $ 769,295 $ 706,125 $ 567,825 Retail 358,322 343,759 297,436 Total Cost of Goods Sold $ 1,127,617 $ 1,049,884 $ 865,261 The following table highlights restaurant cost of goods sold as a percentage of restaurant revenue for the past three years: 2023 2022 2021 Restaurant Cost of Goods Sold 28.1 % 27.5 % 25.5 % The increase in restaurant cost of goods sold as a percentage of restaurant revenue in 2023 as compared to 2022 was primarily the result of higher cost menu items.
Cost of Goods Sold (Exclusive of Depreciation and Rent) The following table highlights the components of cost of goods sold in dollar amounts for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Cost of Goods Sold in dollars: ​ ​ ​ ​ ​ Restaurant ​ $ 743,390 ​ $ 769,295 ​ Retail ​ 344,241 ​ 358,322 ​ Total Cost of Goods Sold ​ $ 1,087,631 ​ $ 1,127,617 ​ ​ The following table highlights restaurant cost of goods sold as a percentage of restaurant revenue for the past two years: ​ ​ ​ ​ ​ ​ ​ 2024 2023 Restaurant Cost of Goods Sold ​ 26.6 % 28.1 % ​ The decrease in restaurant cost of goods sold as a percentage of restaurant revenue in 2024 as compared to 2023 was primarily the result of our menu price increase referenced above.
Borrowing Capacity, Debt Covenants and Notes On June 17, 2022, we entered into a five-year $700,000 revolving credit facility (the “2022 Revolving Credit Facility”) with substantially the same terms and financial covenants as our previous amended $800,000 revolving credit facility (the “2019 Revolving Credit Facility”).
Borrowing Capacity, Debt Covenants and Notes On June 17, 2022, we entered into a five-year $700,000 revolving credit facility (the “2022 Revolving Credit Facility”). The 2022 Revolving Credit Facility also contains an option for the Company to increase the revolving credit facility by $200,000.
We intend to fund our capital expenditures with cash generated by operations and cash on hand as the result of borrowings under our revolving credit facility, as necessary.
This estimate also includes the acquisition of sites and construction costs of two new Cracker Barrel stores and three to four MSBC locations that we plan to open during 2025. We intend to fund our capital expenditures with cash generated by operations and cash on hand as the result of borrowings under our revolving credit facility, as necessary.
(2) Average weekly sales are calculated by dividing net sales by operating weeks and include all stores except for MSBC. (3) Comparable store sales and traffic consist of sales of stores open at least six full quarters at the beginning of the period and are measured on comparable calendar weeks. Comparable store sales and traffic exclude MSBC.
(3) Comparable store sales and traffic consist of sales of stores open at least six full quarters at the beginning of the period and are measured on comparable calendar weeks. Comparable store sales and traffic exclude MSBC. ​ Total revenue in 2024 increased 0.8% as compared to 2023.
In the fourth quarter of 2022, we were authorized by our Board of Directors to repurchase shares of the Company’s outstanding common stock at management’s discretion up to a total value of $200,000 with such authorization to expire on June 2, 2023; this authorization replaced the previous unused portion of the previous $100,000 authorization and expired on June 2, 2023.
On June 02, 2023, the Board of Directors renewed our authorization to repurchase shares of the Company’s outstanding common stock at management’s discretion up to a total value of $200,000, for an additional year; this authorization has expired. We did not repurchase any shares of our common stock in 2024.
Impairment and store closing costs consisted of the following: 2023 Impairment $ 11,692 Store closing costs 2,307 Total $ 13,999 Interest Expense The following table highlights interest expense for the past three years: 2023 2022 2021 Interest expense $ 17,006 $ 9,620 $ 56,108 The year-to-year increase in 2023 as compared to 2022 resulted primarily from higher weighted average debt levels during 2023 and higher weighted average interest rates under our revolving credit facility.
Operating income in 2024 benefited from lower commodity inflation. 42 Table of Contents Interest Expense, Net The following table highlights interest expense for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Interest expense, net ​ $ 20,933 ​ $ 17,006 ​ ​ The year-to-year increase in 2024 as compared to 2023 resulted primarily from higher weighted average debt levels and higher weighted average interest rates under our revolving credit facility.
Assumptions used in determining our incremental borrowing rate include our implied credit rating and an estimate of secured borrowing rates based on comparable market data. We assess the impairment of the right-of-use asset at the asset group level whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.
Assumptions used in determining our incremental borrowing rate include our implied credit rating and an estimate of secured borrowing rates based on comparable market data.
We included long-term agreements and certain retail purchase orders for services and operating needs that can be cancelled with more than 60 days’ notice without penalty only through the term of the notice.
This estimate of our purchase obligations (i) excludes contracts that do not contain minimum purchase obligations and long-term agreements for services and operating needs that can be cancelled within 60 days without penalty, and (ii) includes long-term agreements and certain retail purchase orders for services and operating needs that can be cancelled (A) with more than 60 days’ notice without penalty only through the term of the notice period and (B) only in the event of an uncured material breach or with a penalty through the entire term of the contract.
Our comparable store restaurant sales increase in 2023 as compared to 2022 resulted from an average check increase of 9.8% (including an 8.6% average menu price increase) partially offset by a decrease in guest traffic of 3.5%. Off-premise sales represented approximately 20% of restaurant sales volumes in both 2023 and 2022.
Off-premise sales represented approximately 20% of restaurant sales volumes in 2024 and 2023. Our retail sales are made primarily to our restaurant guests. The decrease in our comparable store retail sales in 2024 as compared to 2023 resulted primarily from the decrease in guest traffic.
General and Administrative Expenses The following table highlights general and administrative expenses as a percentage of total revenue for the past three years: 2023 2022 2021 General and administrative expenses 5.0 % 4.8 % 5.2 % 37 Table of Contents The year-to-year percentage change in 2023 as compared to 2022 resulted from higher corporate-level incentive compensation resulting from better performance against financial objectives in 2023 as compared to 2022.
General and Administrative Expenses The following table highlights general and administrative expenses as a percentage of total revenue for the past two years: ​ ​ ​ ​ ​ ​ ​ 2024 2023 General and administrative expenses 6.0 % 5.0 % ​ ​ 41 Table of Contents The year-to-year percentage change in 2024 as compared to 2023 resulted primarily from the following: ​ ​ ​ ​ ​ ​ 2024 Compared to 2023 ​ ​ ​ Increase as a Percentage ​ ​ of Total Revenue Professional fees ​ 0.6 % Payroll and related expense 0.2 % Incentive compensation expense 0.1 % The increase in professional fees as a percentage of total revenue in 2024 as compared to 2023 resulted primarily from the costs associated with the Company’s strategic transformation plan.
We were in compliance with the 2022 Revolving Credit Facility’s financial covenants at July 28, 2023, and we expect to be in compliance with the 2022 Revolving Credit Facility’s financial covenants for the remaining term of the facility. On June 18, 2021, the Company issued and sold $300,000 in aggregate principal amount of 0.625% Convertible Senior Notes due 2026.
We were in compliance with the 2022 Revolving Credit Facility’s financial covenants at August 02, 2024, and we expect to be in compliance with the 2022 Revolving Credit Facility’s financial covenants for the remaining term of the facility.
The following table highlights retail cost of goods sold as a percentage of retail revenue for the past three years: 2023 2022 2021 Retail Cost of Goods Sold 51.1 % 49.0 % 50.1 % 35 Table of Contents The year-to-year percentage change in 2023 as compared to 2022 resulted primarily from the following: 2023 Compared to 2022 Increase as a Percentage of Total Retail Revenue Markdowns 1.7 % Freight expense 0.5 % The increase in retail cost of goods sold as a percentage of retail revenue in 2023 as compared to 2022 resulted primarily from higher markdowns and higher freight expense.
The following table highlights retail cost of goods sold as a percentage of retail revenue for the past two years: ​ ​ ​ ​ ​ ​ ​ 2024 2023 Retail Cost of Goods Sold ​ 50.9 % 51.1 % ​ Retail cost of goods sold as a percentage of retail revenue remained relatively constant in 2024 as compared to 2023.
The following table highlights other store operating expenses as a percentage of total revenue for the past three years: 2023 2022 2021 Other store operating expenses 23.2 % 23.2 % 24.0 % Other store operating expenses as a percentage of total revenue in 2023 as compared to 2022 remained flat at 23.2%.
The following table highlights other store operating expenses as a percentage of total revenue for the past two years: ​ ​ ​ ​ ​ ​ ​ 2024 2023 Other store operating expenses 24.0 % 23.2 % ​ The increase in other store operating expenses as a percentage of total revenue in 2024 as compared to 2023 resulted primarily from the increase in advertising expense due to higher media spending and costs associated with our new customer loyalty program, Cracker Barrel Rewards.
The increase in capital expenditures in 2023 from 2022 resulted primarily from higher capital expenditures for existing stores and higher capital expenditures for strategic initiatives, including investments in digital and technology infrastructure and the development of a loyalty program.
The increase in capital expenditures in 2024 from 2023 resulted primarily from higher capital expenditures for strategic initiatives, including costs associated with our customer loyalty program, Cracker Barrel Rewards.
Additionally, on August 29, 2023, our Board of Directors declared a dividend of $1.30 per share payable on November 7, 2023 to shareholders of record on October 20, 2023.
Additionally, during the first quarter of 2025, the Board declared a dividend of $0.25 per share payable on November 13, 2024 to shareholders of record as of October 18, 2024.
(b) Our 2022 Revolving Credit Facility expires on June 17, 2027. Using our weighted average interest rate of 6.79% at July 28, 2023 and the outstanding borrowings at July 28, 2023, we anticipate having interest payments of $8,398, $16,478 and $7,243 in 2024, 2025-2026 and 2027, respectively.
Using our weighted average interest rate of 7.19% at August 02, 2024 and the outstanding borrowings at August 02, 2024, we anticipate having interest payments of $13,080, in 2025.
The decrease in our comparable store retail sales in 2023 as compared to 2022 resulted primarily from the decrease in guest traffic partially offset by strong performance in the apparel merchandise category.
Total revenue in 2024 benefited from the additional week of 2024, which resulted in an increase in revenue of $62,800. Our comparable store restaurant sales decrease in 2024 as compared to 2023 resulted primarily from the guest traffic decrease partially offset by the average check increase. The average check increase included an average menu increase of 4.9%.
Changes in these assumptions and management judgments may produce materially different amounts in the recognition of the right-of-use assets and lease liabilities. Additionally, any loss resulting from an impairment of the right-of-use assets is recognized by a charge to income, which could be material.
Additionally, any loss resulting from an impairment of the right-of-use assets is recognized by a charge to income, which could be material. In 2024, we recorded an impairment charge of $1,832 related to a right-of-use asset for a Cracker Barrel location. This amount is included in the impairment and store closing costs line item on the Consolidated Statement of Income.
The year-to-year percentage change in 2022 as compared to 2021 resulted from lower incentive compensation. The decrease in incentive compensation as a percentage of total revenue in 2022 as compared to 2021 was primarily the result of lower performance against financial objectives in 2022 as compared to 2021.
The increase in incentive compensation as a percentage of total revenue in 2024 as compared to 2023 resulted primarily from Chief Executive Officer (“CEO”) transition costs incurred in 2024.
The decreases in our effective tax rate in 2023 as compared to 2022 and in 2022 as compared to 2021 reflect the impact of higher tax credits on lower income before income tax.
The decrease in our effective tax rate from 2023 to 2024 reflects the impact of tax credits on lower income before tax as well as favorable audit settlements. We presently expect our effective tax rate for 2025 to be approximately (7%) to (11%).
The following table highlights our share repurchases for the last three years: 2023 2022 2021 Shares of common stock repurchased 171,792 1,248,184 232,543 Cost of shares repurchased $ 17,449 $ 131,542 $ 35,000 Working Capital In the restaurant industry, substantially all sales are either for cash or third-party credit card.
In 2023, the Company repurchased 171,792 shares of its common stock in the open market at an aggregate cost of $17,449. 46 Table of Contents Working Capital In the restaurant industry, substantially all payments received are made by credit card, debit card or cash.
(d) Includes base lease terms and certain optional renewal periods for which, at the inception of the lease, it is reasonably certain that we will exercise. (e) Purchase obligations consist of purchase orders for food and retail merchandise; purchase orders for capital expenditures, supplies, other operating needs and other services; and commitments under contracts for maintenance needs and other services.
Purchase Obligations We enter into purchase orders for food and retail merchandise; purchase orders for capital expenditures, supplies, other operating needs and other services; and commitments under contracts for maintenance needs and other services in the normal course of business. Our estimate as of August 02, 2024, for these purchase obligations is $141,446, of which $107,485 is short-term.
In 2022, we paid regular dividends of $4.90 per share and declared a dividend of $1.30 per share that was subsequently paid on August 5, 2022 to shareholders of record on July 15, 2022.
As part of this shift to increase investment in our business, the Board of Directors reduced the quarterly dividend and declared a dividend of $0.25 per share that was subsequently paid on August 6, 2024 to shareholders of record on July 19, 2024.
In 2023 and 2022, we experienced inflationary conditions with respect to the cost for food, ingredients, retail merchandise, transportation, distribution, labor and utilities resulting, in part, from economic pressures related to the COVID-19 pandemic. 33 Table of Contents RESULTS OF OPERATIONS The following table highlights operating results over the past three years: Relationship to Total Revenue 2023 2022 2021 Total revenue 100.0 % 100.0 % 100.0 % Cost of goods sold (exclusive of depreciation and rent) 32.8 32.1 30.7 Labor and other related expenses 35.1 35.2 34.8 Other store operating expenses 23.2 23.2 24.0 General and administrative 5.0 4.8 5.2 Gain on sale and leaseback transactions — — (7.7 ) Impairment and store closing costs 0.4 — — Operating income 3.5 4.7 13.0 Interest expense 0.5 0.3 2.0 Income before income taxes 3.0 4.4 11.0 Provision for income taxes 0.1 0.4 2.0 Net income 2.9 4.0 9.0 Total Revenue The following table highlights the key components of revenue for the past three years: 2023 2022 2021 Revenue in dollars (1) : Restaurant $ 2,740,866 $ 2,565,628 $ 2,227,246 Retail 701,942 702,158 594,198 Total revenue $ 3,442,808 $ 3,267,786 $ 2,821,444 Total revenue percentage increase 5.4 % 15.8 % 11.8 % Total revenue by percentage relationships: Restaurant 79.6 % 78.5 % 78.9 % Retail 20.4 % 21.5 % 21.1 % Comparable number of stores 659 659 655 Comparable store sales averages per store: (1) Restaurant $ 4,047 $ 3,804 $ 3,312 Retail 1,049 1,052 890 Total $ 5,096 $ 4,856 $ 4,202 Restaurant average weekly sales (2) $ 77.7 $ 72.9 $ 63.4 Retail average weekly sales (2) 20.3 20.3 17.2 Average check increase 9.8 % 7.0 % 3.1 % Comparable restaurant guest traffic increase/(decrease) (3) (3.5 %) 8.0 % 5.3 % (1) Comparable store averages exclude MSBC.
While we continue to partially offset the impact of these inflationary pressures with menu price increases and operational improvements, there can be no assurance that such conditions will not adversely affect consumer demand or our cost structure in ways that we may be unable to manage without diminishing our profitability. 38 Table of Contents RESULTS OF OPERATIONS The following table highlights operating results over the past two years: ​ ​ ​ ​ ​ ​ Relationship to Total Revenue ​ 2024 2023 Total revenue 100.0 % 100.0 % Cost of goods sold (exclusive of depreciation and rent) 31.3 32.8 Labor and other related expenses 36.6 35.1 Other store operating expenses 24.0 23.2 General and administrative expenses 6.0 5.0 Impairment and store closing costs 0.7 0.4 Goodwill impairment 0.1 ​ — ​ Operating income 1.3 3.5 Interest expense, net 0.6 0.5 Income before income taxes 0.7 3.0 Provision for income taxes (income tax benefit) (0.5) 0.1 Net income 1.2 % 2.9 % ​ The following table sets forth the change in the number of stores in operation for the past two years: ​ ​ ​ ​ ​ 2024 2023 Net change in Company owned stores: ​ Cracker Barrel (2) ​ (4) MSBC 7 ​ 8 Stores in operation at end of the period: ​ ​ ​ Cracker Barrel 658 ​ 660 MSBC 66 ​ 59 Total stores at end of period 724 ​ 719 Total Revenue The following table highlights the key components of revenue for the past two years: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Revenue in dollars: (1) ​ ​ ​ ​ ​ Restaurant $ 2,794,128 ​ $ 2,740,866 ​ Retail ​ 676,634 ​ 701,942 ​ Total revenue $ 3,470,762 ​ $ 3,442,808 ​ Total revenue percentage increase (1) ​ 0.8 % 5.4 % Total revenue by percentage relationships: ​ ​ ​ ​ Restaurant ​ 80.5 % 79.6 % Retail ​ 19.5 % 20.4 % Average store volumes (1)(2) : ​ ​ ​ ​ ​ ​ ​ Restaurant ​ $ 4,133.0 ​ $ 4,040.2 ​ Retail ​ ​ 1,024.3 ​ ​ 1,058.2 ​ Total revenue ​ $ 5,157.3 ​ $ 5,098.4 ​ Comparable store sales increase (decrease) (3) : ​ ​ ​ ​ Restaurant ​ (0.1) % ​ 6.3 % Retail ​ (5.5) % ​ (0.4) % Restaurant and retail ​ (1.2) % ​ 4.9 % Average check increase ​ 4.9 % 9.8 % Comparable restaurant guest traffic decrease (3) : ​ (5.0) % (3.5) % ​ (1) 2024 consists of 53 weeks while the other periods consist of 52 weeks. 39 Table of Contents (2) Average store volumes include sales of all stores except for MSBC.
During 2023, we recorded impairment charges of $11,692 as a result of the deterioration in operating performance of six Cracker Barrel locations. 43 Table of Contents Insurance Reserves We self-insure a significant portion of our expected workers’ compensation and general liability programs.
During 2024 and 2023, we recorded impairment charges of $15,616 and $11,692, respectively, for long-lived assets due to the deterioration in operating performance of six Cracker Barrel locations and thirteen MSBC locations in 2024 and six Cracker Barrel locations in 2023.
The increase in store hourly labor expense as a percentage of total revenue in 2023 as compared to 2022 resulted primarily from wage inflation exceeding menu price increases and investments in additional labor hours to support the guest experience.
The increase in payroll and related expense as a percentage of total revenue in 2024 as compared to 2023 resulted primarily from severance costs related to corporate restructuring and Chief Executive Officer transition costs incurred in 2024.
Our standby letters of credit reduce our borrowing availability under our revolving credit facility. 39 Table of Contents Cash Generated from Operations The increase in net cash flow provided by operating activities in 2023 as compared to 2022 primarily reflected lower retail inventory partially offset by the timing of payments for accounts payable and certain taxes.
Our ability to draw on our 2022 Revolving Credit Facility is subject to the satisfaction of the provisions of the credit facility, as amended, and we believe we will be able to refinance our Revolving Credit Facility and other debt instruments prior their maturity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Generated from Operations The decrease in net cash flow provided by operating activities in 2024 as compared to 2023 resulted primarily from lower net income and a lower decrease in retail inventory levels.
In 2021, we completed a sale and leaseback transaction. The decrease in proceeds from sale of property and equipment in 2022 from 2021 resulted from the sale and leaseback transaction in 2021. See Note 8 to the Consolidated Financial Statements for additional information regarding the sale and leaseback transaction.
For additional information regarding our 2022 Revolving Credit Facility and the Notes, see Note 4 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
The following table highlights our working capital deficit: 2023 2022 2021 Working capital deficit $ (206,679 ) $ (185,048 ) $ (111,666 ) The change in working capital at July 28, 2023 compared to July 29, 2022 primarily reflected the decrease in retail inventory levels and the decrease in cash partially offset by the timing of payments for certain taxes.
Many other operating expenses have normal trade terms and certain expenses such as certain taxes and some benefits are deferred for longer periods of time. ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 Working capital deficit ​ $ (175,993) ​ $ (206,679) The change in working capital at August 02, 2024 compared to July 28, 2023 primarily reflected the decrease in our dividend payable as a result of our reduction of our quarterly dividend and the timing of payments for income taxes.
Removed
On October 19, 2019, the Company acquired 100% ownership of Maple Street Biscuit Company (“MSBC”), a breakfast and lunch fast casual concept. As of September 13, 2023, the Company operated 59 MSBC locations in ten states.
Added
The following MD&A includes a discussion of 2024 and 2023 items and year-to-year comparisons between the years ended August 02, 2024 and July 28, 2023. Discussion of 2022 items and year-to-year comparisons between the years ended July 28, 2023 and July 29, 2022 that are not included in this MD&A can be found in “Part II, Item 7.
Removed
Our long-term strategy remains centered on driving sustainable sales growth, continued business model improvements, building profitable Cracker Barrel and MSBC stores, and ultimately driving shareholder returns.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended July 28, 2023, filed with the SEC on September 26, 2023. 35 Table of Contents EXECUTIVE OVERVIEW Cracker Barrel Old Country Store, Inc.
Removed
Our strategic priorities include the following: • Delivering an exceptional guest experience; • Emphasizing and protecting our strong value proposition; • Accelerating frequency of visits among our growth segments; and • Enhancing our business model through our cost savings program and investing in technology.
Added
Our long-term strategy is anchored on three overarching business imperatives: driving relevancy, delivering food and experiences guests love, and growing profitability.
Removed
External Impacts to Our Operating Environment Our operating results have been impacted by the COVID-19 pandemic and other macroeconomic conditions.
Added
We believe there are significant challenges in the macroeconomic outlook for the coming quarters, including continued inflationary pressures, higher interest rates, higher consumer debt levels and lower savings rates, as well as the potential uncertainty associated with the geopolitical environment and the U.S. presidential election, among other factors.
Removed
During 2021, our business began recovering from the COVID-19 pandemic, but we continued to see negative impacts on our sales and traffic as a result of both changes in consumer behavior and federal, state and local governmental authorities’ continuation of various restrictions on travel, group gatherings and dine-in services.
Added
However, despite these challenges, we remain focused on delivering long-term growth and returns for shareholders.
Removed
Dining room service was operational to varying degrees, yet most locations were impacted at times by capacity restrictions, social distancing guidelines and decreased consumer demand for in-person dining. In 2022, the Company continued to recover from the COVID-19 pandemic; however, we believe outbreaks of new variants adversely impacted consumer demand in 2022.
Added
On May 16, 2024, we announced details of our strategic transformation plan, which was already underway and is built on the following five pillars of our strategy: ● Refining the brand : evolving the brand across all touchpoints including refining and strengthening our positioning to best reach existing and new guests. ● Enhancing the menu : introducing menu innovation focused on craveability and traffic drivers, streamlining processes to improve execution, and optimizing strategic pricing to protect value and improve profitability. ● Evolving the store and guest experience : delivering an exceptional guest experience through operational excellence and improved store design and atmosphere.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+0 added−1 removed6 unchanged
The following table highlights the five food categories which accounted for the largest shares of our food purchases in 2023 and 2022: Percentage of Food Purchases 2023 2022 Poultry 14% 12% Fruits and vegetables 14% 12% Dairy (including eggs) 13% 11% Beef 11% 15% Pork 10% 12% 45 Table of Contents Other categories affected by the commodities markets, such as grains and seafood, may each account for as much as 8% of our food purchases.
The following table highlights the five food categories which accounted for the largest shares of our food purchases in 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Food Purchases ​ 2024 ​ 2023 Fruits and vegetables 14 % 14 % Poultry 13 % 14 % Dairy (including eggs) 13 % 13 % Beef 13 % 11 % Pork 10 % 10 % ​ 50 Table of Contents Other categories affected by the commodities markets, such as grains and seafood, may each account for as much as 8% of our food purchases.
From time to time, competitive circumstances, or judgments about consumer acceptance of price increases, may limit menu price flexibility, and in those circumstances, increases in commodity prices can result in lower margins. In 2022 and 2023, we continued to partially offset commodity pressures through menu price increases and operational improvements. 46 Table of Contents
From time to time, competitive circumstances, or judgments about consumer acceptance of price increases, may limit menu price flexibility, and in those circumstances, increases in commodity prices can result in lower margins. We continue to partially offset commodity pressures through menu price increases and operational improvements. ​ ​ 51 Table of Contents
Subject to the movement in the Company’s common stock price, the Company could be exposed to credit risk arising out of the net settlement of the Convertible Note Hedge Transactions and the Warrant Transactions in its favor.
In 2021, the Company issued the Notes and entered into the Convertible Note Hedge Transactions and the Warrant Transactions with the Hedge Counterparties. Subject to the movement in the Company’s common stock price, the Company could be exposed to credit risk arising out of the net settlement of the Convertible Note Hedge Transactions and the Warrant Transactions in its favor.
At July 28, 2023, the weighted average interest rate of our outstanding $120,000 borrowings was 6.79%. At July 29, 2022, the weighted average interest rate of our outstanding $130,000 borrowings was 3.49%. The impact of a one-percentage point increase in the $120,000 of our outstanding borrowings at July 28, 2023 is approximately $1,200. Credit Risk.
At July 28, 2023, the weighted average interest rate of our outstanding $120,000 borrowings was 6.79%. The impact of a one-percentage point increase in the $180,000 of our outstanding borrowings at August 02, 2024, is approximately $1,800. Credit Risk.
At July 28, 2023 and July 29, 2022, our outstanding borrowings totaled $120,000 and $130,000, respectively (see Note 4 to our Consolidated Financial Statements).
At August 02, 2024 and July 28, 2023, our outstanding borrowings totaled $180,000 and $120,000, respectively (see Note 4 to our Consolidated Financial Statements).
Our policy has been to manage interest cost using a mix of fixed and variable rate debt (see Notes 4, 5 and 8 to our Consolidated Financial Statements). Additionally, in the fourth quarter of 2021, we issued and sold the Notes, which bear cash interest at a fixed rate of 0.625% per annum.
Our policy has been to manage interest cost using a mix of fixed and variable rate debt (see Note 4 to our Consolidated Financial Statements). Additionally, we have Notes, which bear cash interest at a fixed rate of 0.625% per annum. At August 02, 2024, the weighted average interest rate of our outstanding $180,000 borrowings was 7.19%.
Loans under the 2022 Revolving Credit Facility bear interest, at our election, either at the prime rate or a rate 0.5% in excess of the Federal Funds Rate or a rate 1.0% in excess of one-month Term Secured Overnight Financing Rate (SOFR), in each case plus an applicable margin, or the one-, three-, or six-month per annum Term SOFR plus an applicable margin.
In accordance with the 2022 Revolving Credit Facility, outstanding borrowings bear interest, at our election, either at (1) the Term Secured Overnight Financing Rate (SOFR) or (2) a base rate equal to the greatest of (i) the prime rate, (ii) a rate that is 0.5% in excess of the Federal Funds Rate, and (iii) Term SOFR plus 1.0%, in each case plus an applicable margin based on the Company’s consolidated total leverage ratio.
Removed
In June 2021, the Company issued the Notes and entered into the Convertible Note Hedge Transactions and the Warrant Transactions with the Hedge Counterparties.

Other CBRL 10-K year-over-year comparisons