NASDAQ:CBRL Cracker Barrel Old Country Store Q3 2025 Earnings Report $60.50 -2.51 (-3.98%) Closing price 06/27/2025 04:00 PM EasternExtended Trading$60.62 +0.12 (+0.19%) As of 06/27/2025 07:44 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Cracker Barrel Old Country Store EPS ResultsActual EPS$0.58Consensus EPS $0.17Beat/MissBeat by +$0.41One Year Ago EPS$0.88Cracker Barrel Old Country Store Revenue ResultsActual Revenue$821.10 millionExpected Revenue$824.65 millionBeat/MissMissed by -$3.55 millionYoY Revenue Growth+0.50%Cracker Barrel Old Country Store Announcement DetailsQuarterQ3 2025Date6/5/2025TimeBefore Market OpensConference Call DateThursday, June 5, 2025Conference Call Time11:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Cracker Barrel Old Country Store Q3 2025 Earnings Call TranscriptProvided by QuartrJune 5, 2025 ShareLink copied to clipboard.Key Takeaways Cracker Barrel delivered its fourth consecutive quarter of positive comparable store restaurant sales and reported adjusted EBITDA of $48.1 million in Q3, exceeding expectations and underscoring progress on its transformation plan. Phase one of the back-of-house optimization rolled out system-wide, simplifying processes to boost quality and profitability, while reducing hourly turnover by ~14 percentage points and increasing internal net sentiment by 2.3 percent. Cracker Barrel Rewards reached its fiscal ’25 target of 8 million members, now driving over one-third of tracked sales, and AI-driven personalization tests have yielded a mid-single-digit lift in average revenue per member. Tariff pressures remain a headwind—approximately one-third of retail products are China-sourced—and management expects a ~$5 million Q4 EBITDA impact, with mitigation through vendor negotiations, alternate sourcing and pricing adjustments. The company maintained its fiscal ’25 revenue outlook of $3.45–3.50 billion, raised full-year adjusted EBITDA guidance to $215–225 million, anticipates mid-2 percent commodity and wage inflation, ~$160–170 million in CapEx and declared a $0.25/share quarterly dividend. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallCracker Barrel Old Country Store Q3 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipantsPresentationSkip to Participants Operator00:00:00Good morning, everyone, and welcome to the Cracker Barrel Fiscal twenty twenty five Third Quarter Conference Call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touch tone telephones. Operator00:00:27Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Adam Hannan, Director of Investor Relations. Sir, please go ahead. Adam HananDirector - IR at Cracker Barrel Old Country Store00:00:39Thank you. Good morning, and welcome to Cracker Barrel's third quarter fiscal twenty twenty five conference call and webcast. This morning, we issued a press release announcing our third quarter results. In this press release and on this call, we will refer to non GAAP financial measures such as adjusted EBITDA for the third quarter ended 05/02/2025. Please refer to the footnotes in our press release for further details about these metrics. Adam HananDirector - IR at Cracker Barrel Old Country Store00:01:05The company believes these measures provide investors with an enhanced understanding of the company's financial performance. This information is not intended to be considered in isolation or as a substitute for net income or earnings per share information prepared in accordance with GAAP. The last pages of the press release include reconciliations from the non GAAP information to the GAAP financials. On the call with me this morning are Cracker Barrel's President and CEO, Julie Massino and Senior Vice President and CFO, Craig Pomels. Julie and Craig will provide a review of the business, financials and outlook. Adam HananDirector - IR at Cracker Barrel Old Country Store00:01:39We will then open up the call for questions. On this call, statements may be made by management of their beliefs and expectations regarding the company's future operating results or expected future events. These are known as forward looking statements, which involve risks and uncertainties that in many cases are beyond management's control and may cause actual results to differ materially from expectations. We caution our listeners and readers in considering forward looking statements and information. Many of the factors that could affect results are summarized in the cautionary description of risks and uncertainties found at the end of the press release and are described in detail in our reports that we file with or furnish to the SEC. Adam HananDirector - IR at Cracker Barrel Old Country Store00:02:19Finally, the information shared on this call is valid as of today's date, and the company undertakes no obligation to update it except as may be required under applicable law. I'll now turn the call over to Cracker Barrel's President and CEO, Julie Massino. Julie? Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:02:33Good morning and thank you for joining us. We were pleased with our third quarter performance, which included positive comparable store restaurant sales for the fourth consecutive quarter and adjusted EBITDA that exceeded our expectations. These results further underscore that our transformation plan is working. I'll do a quick recap of some Q3 highlights and then speak to the exciting ways our plan is coming together in Q4. As these initiatives exemplify how we're evolving the brand by leaning into what makes Cracker Barrel great and doing so in a refined way that appeals to both existing and new guests alike. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:03:12We're excited about our progress and our teams are energized. Looking back at Q3, the quarter started soft. So we took actions to support the top line and tightly manage our expenses without limiting our ability to deliver our important fourth quarter initiative. I'm proud of how the team responded to these challenges. Their agility, discipline and strong ability to manage the business helped deliver a solid quarter. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:03:39From a culinary perspective, our spring promotion featured two shrimp dishes, a bold Louisiana style shrimp skillet and a comforting shrimp and grits skillet. We also expanded our pancake platform by introducing innovative new flavors and options across various price points as part of our broader barbell strategy. From an operational perspective, we remain focused on strong execution and the metrics that matter. For example, compared to the prior year quarter, hourly turnover improved by approximately 14 percentage points and our internal net sentiment scores increased 2.3%. During the quarter, we implemented phase one of our back of house optimization initiative to the full system. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:04:28As a reminder, this phase is focused on process simplification to improve quality and profitability while also making jobs easier and more enjoyable. We've been pleased with the results and employee feedback has also been very positive as team members find the new processes easier to execute. Let's talk about Q4. There's a lot going on that we're excited about. Our Q4 work demonstrates the complementary nature of our strategic pillars and provides compelling examples of how we're bringing our strategy to life. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:05:04A big focus in recent months has been our brand refinement work, which will continue to gather steam in Q4 before officially launching in August. Brand refinement means evolving our brand across all touch points and creating deeper, more meaningful engagement with our guests. In addition to the updated look and feel that we've been incorporating into our advertising, we are showing up authentically in places where our existing and new guests are. An example of this is our partnership with Speedway Motorsports and the success of the Cracker Barrel four hundred, the NASCAR race we sponsored this past Sunday just down the road from our home office. There's strong overlap with Cracker Barrel guests and NASCAR fans and our brands have much in common. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:05:48Both are highly experiential and put country hospitality and people at the heart of everything we do. The Cracker Barrel four hundred is more than a race. It marks the launch of a key partnership and throughout the summer, NASCAR fans expect activations at Speedway Motorsports destinations across the country. The Cracker Barrel four hundred was a big moment in and of itself, but it is also a piece of our overall strategy and integrated marketing campaign to promote the much anticipated return of campfire meals. We heard loud and clear from both guests and employees that they deeply missed these unique and delicious foil wrapped meals that are packed with hearty proteins, seasoned vegetables and a rich broth. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:06:32We brought them back for the first time since 2018 and made them even better. We've elevated the flavors, improved the quality and made them easier for the kitchen to execute. In addition to the returning favorites of beef and chicken, we've added a new shrimp and andouille sausage offering starting at the great value price point of $10.99 To support Campfire, we've invested in advertising and our integrated marketing campaign also reflects our ongoing brand refinements, including a refreshed look and feel that showcases the quality and appeal of our delicious food. We're also evolving how we show up in social media and are working with creators to tap into conversations as part of our efforts to connect authentically with our guests. Cracker Barrel Rewards is another way we're deepening our engagement with guests and driving frequency. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:07:24To jumpstart the Campfire menu promotion and reward our loyalty members, we gave them early access to our new decadent S'mores Brownie Skillet and will continue to give early access to provide value to our members. We recently achieved our fiscal twenty five year target of acquiring 8,000,000 members and over one third of tracked sales are now associated with loyalty members. Cracker Barrel Rewards continues to deliver incremental sales and traffic and looking ahead, we're focused on enhancing our personalization capabilities to further drive incrementality. As a part of this, we've been testing advanced personalization for Cracker Barrel rewards using an AI driven learning model. We are encouraged by the results as it's driven a mid single digit lift in average revenue per member compared to control. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:08:15We're also using AI in other ways as part of our broader efforts to improve efficiency and effectiveness by leveraging technology. Our traffic forecasting utilizes machine learning, which has improved accuracy at the store level and enhanced our ability to manage labor. Our entry filter for guest relations, or kind of how we triage inbounds, is powered by AI, which speeds up time to resolution and more quickly puts guests in touch with a live representative. And finally, we're using machine learning to bolster our cybersecurity. These are just a few examples and we continue to evaluate opportunities to incorporate AI based technology into our toolkit to positively impact the business. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:08:57Before turning it over to Craig, I'd like to comment on the tariff situation. For context, approximately one third of our retail products are sourced directly from vendors in China. In addition to this direct exposure, we also have indirect exposure related to product that we purchase through domestic vendors that is also sourced from China. Our approach to mitigate the tariff impacts includes first, aggressively negotiating with vendors second, alternate sourcing and third, pricing. As we have mentioned, we have been in the process of updating our retail strategy and we are also accelerating initiatives from this such as rationalizing SKUs, reducing the number of seasonal themes, adjusting our seasonal promotional strategy. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:09:42All of these will also help mitigate the impact of tariffs. The situation remains dynamic and we intend to provide more specifics in September when we report Q4 earnings and share our fiscal year twenty twenty six guidance, at which time we expect to have a higher degree of certainty on the net impacts related to tariffs and the timing of our mitigation efforts. I want to wrap up my prepared remarks with a few key points. First, we acknowledge that there's a lot going on in the macroeconomic environment, but our teams are keenly focused on executing the business today while transforming for the future. Second, we're leaning into what guests love about Cracker Barrel and we're evolving to drive our business forward. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:10:21Our Q4 initiatives are a great example of this and there's much more to come. Third, guests are choosing us, and we've delivered four consecutive quarters of positive comparable store restaurant sales growth. Because of this momentum, we were able again to raise our guidance, and Q4 is off to a strong start. Finally, as a reminder, all of this work is anchored on our three business imperatives of driving relevancy, which is market share, delivering food and experiences guests love and growing profitability. We remain confident in our plan and our ability to execute, and achieving these imperatives will drive significant long term value creation. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:11:03I'll now turn it over to Craig to review our financials and provide our outlook. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:11:08Thank you, Julie, and good morning, everyone. We're now three quarters into our fiscal year, and we continue to make progress against our transformation plan. Although traffic started soft in February, we saw improving trends in March and into April, which also benefited from a strong Easter. Overall, our third quarter performance exceeded our expectations and allowed us to raise our annual guidance. For Q3, we reported total revenue of $821,100,000 which was up 0.5% from the prior year quarter. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:11:46Restaurant revenue increased 1.2% to $679,300,000 and retail revenue decreased 2.7% to $141,800,000 Comparable store restaurant sales grew by 1%, while comparable store retail sales decreased by 3.8%. Pricing for the quarter was approximately 4.9%. Our quarterly pricing consisted of 1.5% carry forward pricing from fiscal twenty twenty four and three point four percent new pricing from fiscal twenty twenty five. Off premise sales were 19.1% of restaurant sales compared to 18.9% in the prior year. Moving on to our third quarter expenses. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:12:45Total cost of goods sold in the quarter was 30.1% of total revenue versus 30% in the prior year. Restaurant cost of goods sold was 26.2% of restaurant sales versus 25.9% in the prior year. This 30 basis point increase was primarily driven by menu mix and commodity inflation, partially offset by menu pricing. Commodity inflation was approximately 2.9%, driven principally by higher beef, egg and pork prices, partially offset by lower produce and poultry prices. As we discussed on the last earnings call, although we are fully contracted on egg prices, one of our vendors lost capacity due to an avian influenza outbreak. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:13:39And as a result, we had to purchase some eggs on the spot market during the quarter. However, egg prices moderated, which reduced the overall cost impact. Retail cost of goods sold was 48.9% of retail sales versus 49% in the prior year. This 10 basis point decrease was primarily driven by higher vendor allowances, partially offset by higher markdowns. Our inventories at quarter end were $168,700,000 compared to $175,300,000 in the prior year. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:14:22Labor and related expenses were 37.1% of revenue compared to 37.8% in the prior year. This 70 basis points decrease was primarily driven by menu pricing and improved productivity, partially offset by wage inflation of approximately 1.9%. One of the drivers of our improved productivity was our back of house optimization initiative. We rolled this out early in the quarter, and we are pleased that we are achieving our savings targets. Other operating expenses were 25.3% of revenue compared to 24.5% in the prior year. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:15:07This 80 basis point increase was primarily driven by higher advertising expense and higher depreciation. General and administrative expenses were 5.6% of revenue compared to adjusted general and administrative expenses of 5.4% in the prior year. This 20 basis point increase was primarily driven by investments to support our strategic transformation initiative. Net interest expense was $5,000,000 compared to net interest expense of $5,200,000 in the prior year. This decrease was primarily the result of lower average interest rates, partially offset by higher debt levels. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:15:54Our GAAP income taxes were a $2,700,000 credit flowing from GAAP earnings before taxes. Adjusted income taxes were a $2,500,000 credit. GAAP earnings per diluted share were $0.56 and adjusted earnings per diluted share were $0.58 Adjusted EBITDA was $48,100,000 or 5.9% of total revenue, compared to $47,900,000 or 5.9% of total revenue in the prior year. Now, turning to capital allocation and our balance sheet. In the third quarter, we invested $36,600,000 in capital expenditures. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:16:42We ended the quarter with 4 and $89,400,000 in total debt. As we disclosed in May, we updated our revolver and added additional debt capacity through a delayed draw term loan or DDTL. The combination of the new revolver and the DDTL increases our debt capacity to $800,000,000 compared to $700,000,000 under the previous revolver and provides flexibility to execute our plans, including the refinancing of our 300,000,000 convertible loan that matures in June of twenty twenty six. Lastly, as announced in today's press release, the board declared a quarterly dividend of $0.25 per share payable on 08/13/2025 to shareholders of record on 07/18/2025. Now moving to our outlook. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:17:42As we move into the final quarter of the first year of our transformation plan, we're pleased with the progress that we're making, as evidenced by our results. And we're encouraged by the strong start to Q4, driven by our Campfire promotion. Additionally, our teams have done an excellent job working to mitigate the impact of tariffs. We anticipate the net tariff impact to Q4 EBITDA will be approximately $5,000,000 And as Julie stated, we will have more to share in September on the impact for fiscal twenty twenty six. Turning to our guidance for fiscal twenty twenty five, we expect the following: total revenue of $3,450,000,000 to $3,500,000,000 pricing of approximately 5% commodity inflation in the mid 2% range, and hourly wage inflation in the mid 2% range. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:18:45We increased our EBITDA outlook, and now anticipate full year adjusted EBITDA of approximately $215,000,000 to $225,000,000 which includes the previously mentioned $5,000,000 tariff impact. We expect a full year GAAP effective tax rate of negative 17% to negative 11%, and an adjusted effective tax rate of negative 6% to 0%. Lastly, we anticipate capital expenditures of approximately $160,000,000 to $170,000,000 In closing, we continue to make great progress. We remain confident in our plans and are focused on delivering a strong finish to fiscal twenty twenty five to set us up for an important fiscal twenty twenty six. With that, I'll now turn the call over to the operator for questions. Operator00:19:45Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press and then one using a touch tone telephone. To withdraw your questions, you may press and 2. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Our first question today comes from Jeff Farmer from Gordon Haskett. Please go ahead with your question. Jeff farmerManaging Director at Gordon Haskett Research Advisors00:20:19Thanks and good morning. You guys noted that Q4 is off to a strong start, but what does that mean in the context of the plus 1% restaurant same store sales number that you reported in Q3? Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:20:35Hi, Jeff, I can start on that one. And yes, we're definitely seeing an improvement trends as we have kind of went through Q3 and into Q4. Our third quarter, as we noted on the last call, February started out a bit challenged as a result of both weather and some consumer uncertainty. Then we saw improvements into March and into April. And then we're particularly pleased that that improvement continued further into Q4. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:21:07So we're not giving an exact number other than to say that we're pleased with the Campfire promotion and it's resonating with guests. Jeff farmerManaging Director at Gordon Haskett Research Advisors00:21:14Okay. And then just a quick follow-up. Again, I think you mentioned tightly managing expenses in Q3. Can you just provide a little bit more detail on what you're doing there on the expense line? Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:21:28Absolutely. I'll take that one as well. Yes. So given that Q3 started out challenged in February in particular, we timed expenses in a number of areas, particularly around G and A. There were some discretionary items in terms of projects that we were able to adjust and just generally, you know, in discretionary areas reduced our expense. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:21:54So as we think about G and A, we would expect that our G and A leveling Q4 will more closely resemble the G and A level that we had in Q1 and Q2. But that also includes this Q4 number will also include some of the shifting that we did with projects out of Q3. So some G and A tightening in Q3 and Q4 inclusive of all of that will be more in line with Q1 and Q2. Okay, thank you. Operator00:22:34Our next question comes from Todd Brooks from The Benchmark Company. Please go ahead with your question. Todd BrooksEquity Research Analyst at The Benchmark Company LLC00:22:40Hey, thanks for taking my questions. Just following up on Jeff's last question, Craig, as you start to think about you gave us a framework for Q4 G and A, but there's also some catch up in there. So how do we think about as we're looking to the out year, G and A as a percent of sales relative to the levels that you'll see in Q4 that you saw in the first half of this year? Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:23:05Hi, Todd. I think we will need to we'll give some more color on that into on the September call. I mean, keep in mind, we've shared before that fiscal twenty five is an investment year and our intention is, as we work through the transformation plan, that G and A will return as a percent of sales will return to closer to its historical levels. And we'll give some more color on that in September. Todd BrooksEquity Research Analyst at The Benchmark Company LLC00:23:35Okay, great. And then two questions on pricing. Can you share you gave us what the pricing was in fiscal Q3, but can you tell us what average check was or maybe size what mix benefit or drag may have been in the quarter? And then the second question on pricing. I think you talked about using 5% now in the fiscal fourth quarter. Todd BrooksEquity Research Analyst at The Benchmark Company LLC00:23:56I think prior you were talking about 4%. Is that reflective of an element of pricing that needed to be taken to help offset the $5,000,000 in tariff pressure? Thanks. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:24:08Todd, I'll start with the second part first. Really, pricing guidance is we're providing annual guidance in that regard, and it's essentially unchanged from what we said before, which is approximately 5%. And then in terms of the overall check dynamic, the check was up 6.6% for the quarter. That includes 4.9% of pricing, 1.7% of mix. So a couple encouraging things there, know, past calls we've talked a lot about the barbell pricing strategy and just kind of the data driven approach to pricing. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:24:47And so we're really pleased that we're able to continue to see our pricing flow through and also continue to deliver that positive mix, which really benefits from a lot of the items that were added to the top of the barbell. You know, we have the steak and shrimp entree and the pot roast, and hash brown casserole Shepherd's pie. So those items have really worked hard for us and the flow through on the price also continues to demonstrate that the pricing strategy continues to work well for us. Todd BrooksEquity Research Analyst at The Benchmark Company LLC00:25:18And one follow-up and then I'll jump back in queue. You talked about the success of Campfire across quarter to date. If we're thinking about the mix impact of Campfire, if it's performing very strongly, would you are you anticipating a strong of a mix result in the fourth quarter? How should we be thinking about mix? Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:25:37I think as we move into Q4, we're going to start to comp more favorable mix from the prior year. So we would expect that our mix contribution will moderate some as we move into Q4, in part as a function of what we're comping on. Todd BrooksEquity Research Analyst at The Benchmark Company LLC00:25:56Okay, great. Thanks. Operator00:26:02Our next question comes from Jake Bartlett from Truist Securities. Please go ahead with your question. Jake BartlettSenior Equity Research Analyst at Truist Securities00:26:08Great. Thanks for taking my questions. My first was on guidance. And Craig, I'm wondering, you raised your EBITDA guidance but kept your sales guidance. I think there's, as you mentioned, an incremental $5,000,000 headwind from tariffs. Jake BartlettSenior Equity Research Analyst at Truist Securities00:26:22So what has changed or what are the drivers of improved outlook for margins versus the sustained outlook for sales? Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:26:33We're pleased on a number of fronts. We talked a little bit about the menu mix and the benefits of that. We continue to be pleased with the gains that we're seeing on labor. As an example, we have the labor wage inflation is benefiting from some of the improvements that we have made across the business, things like turnover, the back of house initiative rolled out in the third quarter. But embedded in that where we have some training costs and so on, so as we move into Q4, we'll get a, you know, more of a full benefit from that in into Q4. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:27:12So a number of the really a lot of the initiatives that we've been working on over the year are kind of starting to come to life in Q4. And so we're excited about the progress there. In spite of, you know, kind of a bit of a challenging backdrop, we think we're making good progress. Jake BartlettSenior Equity Research Analyst at Truist Securities00:27:33Okay, so it sounds like you're getting more labor leverage or some of those initiatives is offsetting the pressure you're expecting from the tariffs? Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:27:44Yeah, there are lot of moving pieces there. The tariffs is a $5,000,000 headwind for sure. But again, and the tariffs we didn't plan for at the beginning of the year, it's relatively we've been working on it here for quite a few months and the team has done a great job with that. But we also have a little bit of favorability in Q4 versus our prior thinking related to eggs. So that's a little bit of a partial offset to some of the headwinds from tariffs. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:28:18But I think the underlying kind of structural improvement kind of goes along with what Julie has been talking about here as a part of the transformation plan, which is, year one is a test and learn investment year. And we are bringing out to life now a lot of the things that we've been testing and learning and investing in. And so you're starting to see the benefit of the broader strategic work come to life, in particular as it relates to labor in this case. Jake BartlettSenior Equity Research Analyst at Truist Securities00:28:48Okay, and then another question on the tariffs, the $5,000,000 impact that you're seeing. Given your turnover of inventory, I guess I would have expected the real impact to start a little bit later and so not actually to hit much of the fourth quarter. So how do we think of that $5,000,000 impact? Is that directly or is, are your costs fully impacted by tariffs at this point in the fourth quarter? What are the mitigating you've talked about mitigating efforts? Jake BartlettSenior Equity Research Analyst at Truist Securities00:29:19What are they? Are there any in place in the fourth quarter? For instance, are you increasing retail prices to help offset the tariffs? Are you shifting away from the China supply? What are you doing in the fourth quarter? Jake BartlettSenior Equity Research Analyst at Truist Securities00:29:32And should we think of is it fair to think of that $5,000,000 as a good run rate as we think about 26,000,000 so $20,000,000 for the year? Or is it just way too early to tell at this point? Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:29:46Hey, Jake, I'll start and then I'll let Craig jump in because I'm sure I won't get all of that. It's an excellent question, right? So let me back up a little bit, right? The teams have been thinking about tariffs for months, right? This is a topic on the campaign trail. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:30:00Frankly, we have been working on a similar transformation for the retail business that we've been doing on the restaurant side. So really relooking at the strategy there, what are the pieces of the business that require a little bit of reinvention and what will that look like? And so thinking about that strategy and where we're going, there have been a couple of key things that the tariff situation have actually enabled us to accelerate. One of the key tenants of what we're looking at from a retail strategy is the number of SKUs that we have, the number of themes that we have, and the timing of when they hit the floor. We've been known to put Christmas and Halloween out quite early, and so we're readjusting some of that timing to really be more in time with where consumer needs state and demand is. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:30:47And so we've got a lot of moving pieces while this tariff thing is coming in. So the team's been really working for a while now on rationalizing SKUs, thinking about those themes, thinking about the timing, and moving all of those pieces. Now, specifically against the way tariffs are at the moment, and remember ninety days ago when we were sitting here it looked really different than where we're sitting today, and time continues to be a very big factor in all of this. But we actually have to keep going because we have a business to run. So the teams are really working with vendors. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:31:17Our vendor partners have been tremendous through this exercise. We've been able to negotiate with them. They're negotiating with their factories. We've been alternate sourcing for a while. Are there different parts of the world where some of these goods can come from? Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:31:30And then as a last lever and look, pricing is an option. But we're being very thoughtful about pricing because this business is so discretionary. And we know from work that we've done around the transformation that value is important in this business just like it is in our restaurant business. So we'll have more to share about how to think about 2026 and tariffs September, because we'll present our annual guidance and Jake and we'll go like a couple of clicks deeper on it at that point in time. But know that the teams are really working as we push our strategy forward, absorb this tariff situation and continue to just check and adjust against it. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:32:04I'm actually very pleased about how we've been able to absorb the impact so far here in fiscal twenty twenty five and what that looks like as we move forward. I don't know Craig, if there's anything you would add. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:32:15No, I think that's right. The team is doing a good job and it's dynamic and they continue to adjust and, you know, maybe one thing to just consider is, you know, there's an average inventory turn in there. But there's some things that are turning faster, and some things are a little bit longer. And then there are decisions that we're making now that are kind of in anticipation of the tariff impact in the future. So the big takeaway for us is while that's out there, the team has been working on this for months, they've made great progress and we anticipate even more progress. Jake BartlettSenior Equity Research Analyst at Truist Securities00:32:53Great, I appreciate it. Operator00:32:57Our next question comes from Brian Mulan from Piper Sandler. Please go ahead with your question. Brian MullanDirector & Senior Research Analyst at Piper Sandler Companies00:33:04Thank you. Question back to phase one of the back of the house optimization initiative. You know, just understanding the benefits are probably only just starting now in in fiscal q four. Can you just talk about or help us understand, do you anticipate a permanent reduction in labor hours in the back of the house as a result of this phase? And do those fall to the bottom line or do those get maybe reinvested into another area of the business? Brian MullanDirector & Senior Research Analyst at Piper Sandler Companies00:33:28And then related to that, I think there's a Phase II and then a Phase III that we will see over the next couple of years. Can you remind us what those phases are related to and when you transition into the second phase? Thank you. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:33:40Sure. Brian, I'll start and then I'll let Craig handle a couple of the specifics there on the movement of the savings. The goal, remember, of this entire work stream is to improve the quality of our food because we're mainly a restaurant business and make sure that we're always serving our delicious scratch made food, but making it easier for the teams to do that consistently and making the jobs more enjoyable. We've got a lot of processes in the back of the house that haven't changed a lot in a long time. That's really the genesis of this work. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:34:11As we got into it, as part of the transformation agenda, we've broken this work into three phases. This first phase that we launched in Q3 and so you're right to think that not all of the benefit is there, and I'll let Craig talk about that in a moment the first phase is really focused on some of those processes and changing the way that we actually make the food to improve the quality and make the jobs easier. So that's kind of Phase one. Phase two is about how do we take that even further by bringing in some ingredients that are already pre chopped and pre sliced and things like that, because today we do all of that by hand, or most of it by hand. And then phase three is, gosh, equipment has changed so much in the last few decades. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:34:50Are there equipment solutions that would also make it easier for our cooks and our prep cooks to do their work easier? So those three phases will phase out over the remaining years of the transformation. This phase one, I'll let Craig talk about how it's flowing through, but we're real pleased so far with the early days of this. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:35:08Yeah, I'll take the second part of that. We do expect the back of house initiative to flow through. Again, we didn't get the full benefit of that Q3 because there were some learning curve training and so on. We do expect more of a benefit in Q4 and into 2026. We've talked and we just talked a lot about 2025 being an investment year and a test and learn year. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:35:34So we do expect to get the benefit of this initiative on a more of a run rate basis as we finish up Q4 and into fiscal twenty twenty six. And it's really a part of that broader 50,000,000 to $60,000,000 cost save that we've talked about. Now as we go into back of house phase two, we expect to see some overall benefit to our total prime cost. But you might end up with a little bit of shift in between buckets there. A part of the plan here is to, in a more permanent way, improve the ease of operating the back of house and the consistency and the quality as well as the cost in a permanent structural way. Brian MullanDirector & Senior Research Analyst at Piper Sandler Companies00:36:23Thank you. That's great color. And then I just want to ask about remodeling initiative. You've called fiscal 'twenty five a test and learn year. So can you just talk about what you've learned thus far this year in terms of the different approaches you've taken with some of the projects? Brian MullanDirector & Senior Research Analyst at Piper Sandler Companies00:36:37And if you'd be willing to talk about your plans for fiscal twenty twenty six or how you're thinking about a number of stores or maybe CapEx? Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:36:46It's never a call until somebody asks us about remodels. So thanks for the question, Brian. As we've discussed, this has really been a year of testing and learning and so we are saving this topic for September. So we will talk a lot about it in September, really what we've learned in this year and what we continue to learn because honestly we're not done learning. We are really continuing to transform the organization to be one that's more agile and really to just continuously learn and improve as we go forward. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:37:17We've launched a new version of a remodel. Remember, we've got 20 remodels and 20 refreshes that as of right now are complete in the system. And we continue to be really pleased with what we're learning there, the impact that it's having on the system. Employees have given us great feedback about working in those newly remodeled and refreshed stores and guests continue to tell us that they're lighter, brighter, more welcoming and they're enjoying them as well. But at the April, we launched a new version of a remodel as well. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:37:47And so it's early, early days of that. We're very pleased with the early results of that. We've taken retail into a different way in this remodel as well. So there's just a lot to learn. And as you can imagine, it's only been thirty days of that. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:38:00That's really why we want to wait and have the conversation in September. We'll talk about how it's informing our '26 and beyond plan and really what we've learned to date as we continue to learn on this topic. Brian MullanDirector & Senior Research Analyst at Piper Sandler Companies00:38:11Okay. Thank you. Operator00:38:15And our next question comes from Sarah Sanatore from Bank of America. Please go ahead with your question. Sara SenatoreSenior Research Analyst at Bank of America00:38:20Thank you. I wanted to go back to the sort of traffic trends. I know that you had said that they started off soft in February and then improved. But I guess as you think about all these initiatives, you said consumers or customers are choosing Cracker Barrel, but the traffic is still pretty negative. So I guess maybe you could help me understand is this kind of a process where there are certain kinds of transactions that you're intentionally perhaps losing and then in lieu of Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:38:50that you're getting perhaps some more profitable transactions at the higher end of the barbell? And then with respect to the any kind of color on the trends across demographic groups? I know last quarter you had said you're actually seeing some better performance among 55 and up consumers. So does that continue? And does that say anything about kind of the efficacy of some of the traffic driving initiatives? Thanks. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:39:17Hi, Sarah, it's Craig. I'll start and I think Julie and I will share this one. The I think the thing I would keep in mind on the traffic for the quarter is there are pretty sizable differences in terms of, let's say, versus April. And so I would just keep that in mind. February was particularly challenged, the weather was tough, the macro uncertainty, there was a lot of news was elevated, but we've been pleased with the progress throughout the quarter. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:39:49And we've been pleased with the way that the fourth quarter has started. So we, you know, the work that we're doing here is really about bringing Hyperbarrel back profit double growth. And that includes traffic. And we think even though the overall quarter was challenged from a traffic perspective, we think the underlying trend is something that we're happy with. In terms of the demographic trends, would say it was pretty steady. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:40:21There wasn't a big standout across the entire quarter. Our over 50 five cohorts performed similarly to our 55 cohorts, our 60 ks, over 60 ks income cohort performed similarly to our 60. I think the takeaway for us on the quarter is more about how the quarter developed and how the fourth quarter has started. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:40:49No, I think that's right. I think remember, we said this is an investment year and this is a three year plan and it's not going to be a straight line. There's going to be some bumps along the way, some of which you can anticipate, some of which you can't. I don't think anybody thought the macros would do what they did in February. I don't think anybody thought the weather would be as bad as it was on top of that. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:41:09So I'm real pleased with how we have actually managed through this quarter given some of those real strong headwinds at the beginning of the quarter. And then to Craig's point, I think, Sarah, we continue to be very optimistic and confident in the long term trends that we're seeing underneath the business. So I think Q3 is a little bit of a speed bump in kind of what's been a good year for us so far in terms of changing those trends and bending the curves that we need to bend to keep this transformation on track and take the brand where it needs to go long term. Sara SenatoreSenior Research Analyst at Bank of America00:41:40Thank you. Operator00:41:45And ladies and gentlemen, with that, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Julie Massino for closing remarks. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:41:56Thank you. I want to start with a huge thank you to the teams in our six fifty eight stores who bring the Cracker Barrel country hospitality to life every day for our guests. The executive team, the board and I really appreciate your smiles and hard work in what was I know a difficult quarter. And to everyone else on the call today, thank you for joining us today. Our plan is working and we are excited about what's ahead. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:42:19We appreciate your interest in the brand and we look forward to giving you our next update in September. Operator00:42:26Ladies and gentlemen, that does conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.Read moreParticipantsExecutivesAdam HananDirector - IRJulie Felss MasinoPresident & CEOCraig PommellsSVP and CFOAnalystsJeff farmerManaging Director at Gordon Haskett Research AdvisorsTodd BrooksEquity Research Analyst at The Benchmark Company LLCJake BartlettSenior Equity Research Analyst at Truist SecuritiesBrian MullanDirector & Senior Research Analyst at Piper Sandler CompaniesSara SenatoreSenior Research Analyst at Bank of AmericaPowered by Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Cracker Barrel Old Country Store Earnings HeadlinesCracker Barrel Old Country Store (CBRL) is a Great Momentum Stock: Should You Buy? - NasdaqJune 24, 2025 | nasdaq.comCracker Barrel Old Country Store Inc. Research & Ratings | CBRL | Barron'sJune 24, 2025 | barrons.comA new rule goes live in July — and the banks are quietly cashing inA major change is quietly going into effect this July — and Wall Street is already positioning for it. Big Banks have found a way to use a new asset as if it were cash. Not stocks. Not bonds. Not even the U.S. dollar. They now trust this asset more than the traditional financial system itself.June 29 at 2:00 AM | American Alternative (Ad)Cracker Barrel Old Country Store (NASDAQ:CBRL) Stock Price Crosses Above 200 Day Moving Average - What's Next?June 24, 2025 | americanbankingnews.comBIGLARI CAPITAL CORP. Reduces Stake in Cracker Barrel Old Country Store Inc.June 16, 2025 | gurufocus.comCracker Barrel Issues $345M Convertible Senior NotesJune 16, 2025 | tipranks.comSee More Cracker Barrel Old Country Store Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Cracker Barrel Old Country Store? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Cracker Barrel Old Country Store and other key companies, straight to your email. Email Address About Cracker Barrel Old Country StoreCracker Barrel Old Country Store (NASDAQ:CBRL) develops and operates the Cracker Barrel Old Country Store concept in the United States. Its Cracker Barrel stores consist of restaurants with a gift shop. The company's restaurants serve breakfast, lunch, and dinner daily, as well as dine-in, pick-up, and delivery services. Its gift shop offers various decorative and functional items, such as rocking chairs, seasonal gifts, apparel, toys, food, cookware, and various other gift items, as well as various candies, preserves, and other food items. The company was incorporated in 1969 and is headquartered in Lebanon, Tennessee.View Cracker Barrel Old Country Store ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Smith & Wesson Stock Falls on Earnings Miss, Tariff WoesWhat to Expect From the Q2 Earnings Reporting CycleBroadcom Slides on Solid Earnings, AI Outlook Still StrongFive Below Pops on Strong Earnings, But Rally May StallRed Robin's Comeback: Q1 Earnings Spark Investor HopesOllie’s Q1 Earnings: The Good, the Bad, and What’s NextBroadcom Earnings Preview: AVGO Stock Near Record Highs Upcoming Earnings Bank of America (7/14/2025)America Movil (7/15/2025)Bank of New York Mellon (7/15/2025)Citigroup (7/15/2025)JPMorgan Chase & Co. 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PresentationSkip to Participants Operator00:00:00Good morning, everyone, and welcome to the Cracker Barrel Fiscal twenty twenty five Third Quarter Conference Call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touch tone telephones. Operator00:00:27Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Adam Hannan, Director of Investor Relations. Sir, please go ahead. Adam HananDirector - IR at Cracker Barrel Old Country Store00:00:39Thank you. Good morning, and welcome to Cracker Barrel's third quarter fiscal twenty twenty five conference call and webcast. This morning, we issued a press release announcing our third quarter results. In this press release and on this call, we will refer to non GAAP financial measures such as adjusted EBITDA for the third quarter ended 05/02/2025. Please refer to the footnotes in our press release for further details about these metrics. Adam HananDirector - IR at Cracker Barrel Old Country Store00:01:05The company believes these measures provide investors with an enhanced understanding of the company's financial performance. This information is not intended to be considered in isolation or as a substitute for net income or earnings per share information prepared in accordance with GAAP. The last pages of the press release include reconciliations from the non GAAP information to the GAAP financials. On the call with me this morning are Cracker Barrel's President and CEO, Julie Massino and Senior Vice President and CFO, Craig Pomels. Julie and Craig will provide a review of the business, financials and outlook. Adam HananDirector - IR at Cracker Barrel Old Country Store00:01:39We will then open up the call for questions. On this call, statements may be made by management of their beliefs and expectations regarding the company's future operating results or expected future events. These are known as forward looking statements, which involve risks and uncertainties that in many cases are beyond management's control and may cause actual results to differ materially from expectations. We caution our listeners and readers in considering forward looking statements and information. Many of the factors that could affect results are summarized in the cautionary description of risks and uncertainties found at the end of the press release and are described in detail in our reports that we file with or furnish to the SEC. Adam HananDirector - IR at Cracker Barrel Old Country Store00:02:19Finally, the information shared on this call is valid as of today's date, and the company undertakes no obligation to update it except as may be required under applicable law. I'll now turn the call over to Cracker Barrel's President and CEO, Julie Massino. Julie? Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:02:33Good morning and thank you for joining us. We were pleased with our third quarter performance, which included positive comparable store restaurant sales for the fourth consecutive quarter and adjusted EBITDA that exceeded our expectations. These results further underscore that our transformation plan is working. I'll do a quick recap of some Q3 highlights and then speak to the exciting ways our plan is coming together in Q4. As these initiatives exemplify how we're evolving the brand by leaning into what makes Cracker Barrel great and doing so in a refined way that appeals to both existing and new guests alike. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:03:12We're excited about our progress and our teams are energized. Looking back at Q3, the quarter started soft. So we took actions to support the top line and tightly manage our expenses without limiting our ability to deliver our important fourth quarter initiative. I'm proud of how the team responded to these challenges. Their agility, discipline and strong ability to manage the business helped deliver a solid quarter. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:03:39From a culinary perspective, our spring promotion featured two shrimp dishes, a bold Louisiana style shrimp skillet and a comforting shrimp and grits skillet. We also expanded our pancake platform by introducing innovative new flavors and options across various price points as part of our broader barbell strategy. From an operational perspective, we remain focused on strong execution and the metrics that matter. For example, compared to the prior year quarter, hourly turnover improved by approximately 14 percentage points and our internal net sentiment scores increased 2.3%. During the quarter, we implemented phase one of our back of house optimization initiative to the full system. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:04:28As a reminder, this phase is focused on process simplification to improve quality and profitability while also making jobs easier and more enjoyable. We've been pleased with the results and employee feedback has also been very positive as team members find the new processes easier to execute. Let's talk about Q4. There's a lot going on that we're excited about. Our Q4 work demonstrates the complementary nature of our strategic pillars and provides compelling examples of how we're bringing our strategy to life. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:05:04A big focus in recent months has been our brand refinement work, which will continue to gather steam in Q4 before officially launching in August. Brand refinement means evolving our brand across all touch points and creating deeper, more meaningful engagement with our guests. In addition to the updated look and feel that we've been incorporating into our advertising, we are showing up authentically in places where our existing and new guests are. An example of this is our partnership with Speedway Motorsports and the success of the Cracker Barrel four hundred, the NASCAR race we sponsored this past Sunday just down the road from our home office. There's strong overlap with Cracker Barrel guests and NASCAR fans and our brands have much in common. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:05:48Both are highly experiential and put country hospitality and people at the heart of everything we do. The Cracker Barrel four hundred is more than a race. It marks the launch of a key partnership and throughout the summer, NASCAR fans expect activations at Speedway Motorsports destinations across the country. The Cracker Barrel four hundred was a big moment in and of itself, but it is also a piece of our overall strategy and integrated marketing campaign to promote the much anticipated return of campfire meals. We heard loud and clear from both guests and employees that they deeply missed these unique and delicious foil wrapped meals that are packed with hearty proteins, seasoned vegetables and a rich broth. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:06:32We brought them back for the first time since 2018 and made them even better. We've elevated the flavors, improved the quality and made them easier for the kitchen to execute. In addition to the returning favorites of beef and chicken, we've added a new shrimp and andouille sausage offering starting at the great value price point of $10.99 To support Campfire, we've invested in advertising and our integrated marketing campaign also reflects our ongoing brand refinements, including a refreshed look and feel that showcases the quality and appeal of our delicious food. We're also evolving how we show up in social media and are working with creators to tap into conversations as part of our efforts to connect authentically with our guests. Cracker Barrel Rewards is another way we're deepening our engagement with guests and driving frequency. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:07:24To jumpstart the Campfire menu promotion and reward our loyalty members, we gave them early access to our new decadent S'mores Brownie Skillet and will continue to give early access to provide value to our members. We recently achieved our fiscal twenty five year target of acquiring 8,000,000 members and over one third of tracked sales are now associated with loyalty members. Cracker Barrel Rewards continues to deliver incremental sales and traffic and looking ahead, we're focused on enhancing our personalization capabilities to further drive incrementality. As a part of this, we've been testing advanced personalization for Cracker Barrel rewards using an AI driven learning model. We are encouraged by the results as it's driven a mid single digit lift in average revenue per member compared to control. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:08:15We're also using AI in other ways as part of our broader efforts to improve efficiency and effectiveness by leveraging technology. Our traffic forecasting utilizes machine learning, which has improved accuracy at the store level and enhanced our ability to manage labor. Our entry filter for guest relations, or kind of how we triage inbounds, is powered by AI, which speeds up time to resolution and more quickly puts guests in touch with a live representative. And finally, we're using machine learning to bolster our cybersecurity. These are just a few examples and we continue to evaluate opportunities to incorporate AI based technology into our toolkit to positively impact the business. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:08:57Before turning it over to Craig, I'd like to comment on the tariff situation. For context, approximately one third of our retail products are sourced directly from vendors in China. In addition to this direct exposure, we also have indirect exposure related to product that we purchase through domestic vendors that is also sourced from China. Our approach to mitigate the tariff impacts includes first, aggressively negotiating with vendors second, alternate sourcing and third, pricing. As we have mentioned, we have been in the process of updating our retail strategy and we are also accelerating initiatives from this such as rationalizing SKUs, reducing the number of seasonal themes, adjusting our seasonal promotional strategy. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:09:42All of these will also help mitigate the impact of tariffs. The situation remains dynamic and we intend to provide more specifics in September when we report Q4 earnings and share our fiscal year twenty twenty six guidance, at which time we expect to have a higher degree of certainty on the net impacts related to tariffs and the timing of our mitigation efforts. I want to wrap up my prepared remarks with a few key points. First, we acknowledge that there's a lot going on in the macroeconomic environment, but our teams are keenly focused on executing the business today while transforming for the future. Second, we're leaning into what guests love about Cracker Barrel and we're evolving to drive our business forward. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:10:21Our Q4 initiatives are a great example of this and there's much more to come. Third, guests are choosing us, and we've delivered four consecutive quarters of positive comparable store restaurant sales growth. Because of this momentum, we were able again to raise our guidance, and Q4 is off to a strong start. Finally, as a reminder, all of this work is anchored on our three business imperatives of driving relevancy, which is market share, delivering food and experiences guests love and growing profitability. We remain confident in our plan and our ability to execute, and achieving these imperatives will drive significant long term value creation. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:11:03I'll now turn it over to Craig to review our financials and provide our outlook. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:11:08Thank you, Julie, and good morning, everyone. We're now three quarters into our fiscal year, and we continue to make progress against our transformation plan. Although traffic started soft in February, we saw improving trends in March and into April, which also benefited from a strong Easter. Overall, our third quarter performance exceeded our expectations and allowed us to raise our annual guidance. For Q3, we reported total revenue of $821,100,000 which was up 0.5% from the prior year quarter. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:11:46Restaurant revenue increased 1.2% to $679,300,000 and retail revenue decreased 2.7% to $141,800,000 Comparable store restaurant sales grew by 1%, while comparable store retail sales decreased by 3.8%. Pricing for the quarter was approximately 4.9%. Our quarterly pricing consisted of 1.5% carry forward pricing from fiscal twenty twenty four and three point four percent new pricing from fiscal twenty twenty five. Off premise sales were 19.1% of restaurant sales compared to 18.9% in the prior year. Moving on to our third quarter expenses. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:12:45Total cost of goods sold in the quarter was 30.1% of total revenue versus 30% in the prior year. Restaurant cost of goods sold was 26.2% of restaurant sales versus 25.9% in the prior year. This 30 basis point increase was primarily driven by menu mix and commodity inflation, partially offset by menu pricing. Commodity inflation was approximately 2.9%, driven principally by higher beef, egg and pork prices, partially offset by lower produce and poultry prices. As we discussed on the last earnings call, although we are fully contracted on egg prices, one of our vendors lost capacity due to an avian influenza outbreak. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:13:39And as a result, we had to purchase some eggs on the spot market during the quarter. However, egg prices moderated, which reduced the overall cost impact. Retail cost of goods sold was 48.9% of retail sales versus 49% in the prior year. This 10 basis point decrease was primarily driven by higher vendor allowances, partially offset by higher markdowns. Our inventories at quarter end were $168,700,000 compared to $175,300,000 in the prior year. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:14:22Labor and related expenses were 37.1% of revenue compared to 37.8% in the prior year. This 70 basis points decrease was primarily driven by menu pricing and improved productivity, partially offset by wage inflation of approximately 1.9%. One of the drivers of our improved productivity was our back of house optimization initiative. We rolled this out early in the quarter, and we are pleased that we are achieving our savings targets. Other operating expenses were 25.3% of revenue compared to 24.5% in the prior year. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:15:07This 80 basis point increase was primarily driven by higher advertising expense and higher depreciation. General and administrative expenses were 5.6% of revenue compared to adjusted general and administrative expenses of 5.4% in the prior year. This 20 basis point increase was primarily driven by investments to support our strategic transformation initiative. Net interest expense was $5,000,000 compared to net interest expense of $5,200,000 in the prior year. This decrease was primarily the result of lower average interest rates, partially offset by higher debt levels. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:15:54Our GAAP income taxes were a $2,700,000 credit flowing from GAAP earnings before taxes. Adjusted income taxes were a $2,500,000 credit. GAAP earnings per diluted share were $0.56 and adjusted earnings per diluted share were $0.58 Adjusted EBITDA was $48,100,000 or 5.9% of total revenue, compared to $47,900,000 or 5.9% of total revenue in the prior year. Now, turning to capital allocation and our balance sheet. In the third quarter, we invested $36,600,000 in capital expenditures. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:16:42We ended the quarter with 4 and $89,400,000 in total debt. As we disclosed in May, we updated our revolver and added additional debt capacity through a delayed draw term loan or DDTL. The combination of the new revolver and the DDTL increases our debt capacity to $800,000,000 compared to $700,000,000 under the previous revolver and provides flexibility to execute our plans, including the refinancing of our 300,000,000 convertible loan that matures in June of twenty twenty six. Lastly, as announced in today's press release, the board declared a quarterly dividend of $0.25 per share payable on 08/13/2025 to shareholders of record on 07/18/2025. Now moving to our outlook. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:17:42As we move into the final quarter of the first year of our transformation plan, we're pleased with the progress that we're making, as evidenced by our results. And we're encouraged by the strong start to Q4, driven by our Campfire promotion. Additionally, our teams have done an excellent job working to mitigate the impact of tariffs. We anticipate the net tariff impact to Q4 EBITDA will be approximately $5,000,000 And as Julie stated, we will have more to share in September on the impact for fiscal twenty twenty six. Turning to our guidance for fiscal twenty twenty five, we expect the following: total revenue of $3,450,000,000 to $3,500,000,000 pricing of approximately 5% commodity inflation in the mid 2% range, and hourly wage inflation in the mid 2% range. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:18:45We increased our EBITDA outlook, and now anticipate full year adjusted EBITDA of approximately $215,000,000 to $225,000,000 which includes the previously mentioned $5,000,000 tariff impact. We expect a full year GAAP effective tax rate of negative 17% to negative 11%, and an adjusted effective tax rate of negative 6% to 0%. Lastly, we anticipate capital expenditures of approximately $160,000,000 to $170,000,000 In closing, we continue to make great progress. We remain confident in our plans and are focused on delivering a strong finish to fiscal twenty twenty five to set us up for an important fiscal twenty twenty six. With that, I'll now turn the call over to the operator for questions. Operator00:19:45Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press and then one using a touch tone telephone. To withdraw your questions, you may press and 2. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Our first question today comes from Jeff Farmer from Gordon Haskett. Please go ahead with your question. Jeff farmerManaging Director at Gordon Haskett Research Advisors00:20:19Thanks and good morning. You guys noted that Q4 is off to a strong start, but what does that mean in the context of the plus 1% restaurant same store sales number that you reported in Q3? Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:20:35Hi, Jeff, I can start on that one. And yes, we're definitely seeing an improvement trends as we have kind of went through Q3 and into Q4. Our third quarter, as we noted on the last call, February started out a bit challenged as a result of both weather and some consumer uncertainty. Then we saw improvements into March and into April. And then we're particularly pleased that that improvement continued further into Q4. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:21:07So we're not giving an exact number other than to say that we're pleased with the Campfire promotion and it's resonating with guests. Jeff farmerManaging Director at Gordon Haskett Research Advisors00:21:14Okay. And then just a quick follow-up. Again, I think you mentioned tightly managing expenses in Q3. Can you just provide a little bit more detail on what you're doing there on the expense line? Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:21:28Absolutely. I'll take that one as well. Yes. So given that Q3 started out challenged in February in particular, we timed expenses in a number of areas, particularly around G and A. There were some discretionary items in terms of projects that we were able to adjust and just generally, you know, in discretionary areas reduced our expense. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:21:54So as we think about G and A, we would expect that our G and A leveling Q4 will more closely resemble the G and A level that we had in Q1 and Q2. But that also includes this Q4 number will also include some of the shifting that we did with projects out of Q3. So some G and A tightening in Q3 and Q4 inclusive of all of that will be more in line with Q1 and Q2. Okay, thank you. Operator00:22:34Our next question comes from Todd Brooks from The Benchmark Company. Please go ahead with your question. Todd BrooksEquity Research Analyst at The Benchmark Company LLC00:22:40Hey, thanks for taking my questions. Just following up on Jeff's last question, Craig, as you start to think about you gave us a framework for Q4 G and A, but there's also some catch up in there. So how do we think about as we're looking to the out year, G and A as a percent of sales relative to the levels that you'll see in Q4 that you saw in the first half of this year? Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:23:05Hi, Todd. I think we will need to we'll give some more color on that into on the September call. I mean, keep in mind, we've shared before that fiscal twenty five is an investment year and our intention is, as we work through the transformation plan, that G and A will return as a percent of sales will return to closer to its historical levels. And we'll give some more color on that in September. Todd BrooksEquity Research Analyst at The Benchmark Company LLC00:23:35Okay, great. And then two questions on pricing. Can you share you gave us what the pricing was in fiscal Q3, but can you tell us what average check was or maybe size what mix benefit or drag may have been in the quarter? And then the second question on pricing. I think you talked about using 5% now in the fiscal fourth quarter. Todd BrooksEquity Research Analyst at The Benchmark Company LLC00:23:56I think prior you were talking about 4%. Is that reflective of an element of pricing that needed to be taken to help offset the $5,000,000 in tariff pressure? Thanks. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:24:08Todd, I'll start with the second part first. Really, pricing guidance is we're providing annual guidance in that regard, and it's essentially unchanged from what we said before, which is approximately 5%. And then in terms of the overall check dynamic, the check was up 6.6% for the quarter. That includes 4.9% of pricing, 1.7% of mix. So a couple encouraging things there, know, past calls we've talked a lot about the barbell pricing strategy and just kind of the data driven approach to pricing. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:24:47And so we're really pleased that we're able to continue to see our pricing flow through and also continue to deliver that positive mix, which really benefits from a lot of the items that were added to the top of the barbell. You know, we have the steak and shrimp entree and the pot roast, and hash brown casserole Shepherd's pie. So those items have really worked hard for us and the flow through on the price also continues to demonstrate that the pricing strategy continues to work well for us. Todd BrooksEquity Research Analyst at The Benchmark Company LLC00:25:18And one follow-up and then I'll jump back in queue. You talked about the success of Campfire across quarter to date. If we're thinking about the mix impact of Campfire, if it's performing very strongly, would you are you anticipating a strong of a mix result in the fourth quarter? How should we be thinking about mix? Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:25:37I think as we move into Q4, we're going to start to comp more favorable mix from the prior year. So we would expect that our mix contribution will moderate some as we move into Q4, in part as a function of what we're comping on. Todd BrooksEquity Research Analyst at The Benchmark Company LLC00:25:56Okay, great. Thanks. Operator00:26:02Our next question comes from Jake Bartlett from Truist Securities. Please go ahead with your question. Jake BartlettSenior Equity Research Analyst at Truist Securities00:26:08Great. Thanks for taking my questions. My first was on guidance. And Craig, I'm wondering, you raised your EBITDA guidance but kept your sales guidance. I think there's, as you mentioned, an incremental $5,000,000 headwind from tariffs. Jake BartlettSenior Equity Research Analyst at Truist Securities00:26:22So what has changed or what are the drivers of improved outlook for margins versus the sustained outlook for sales? Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:26:33We're pleased on a number of fronts. We talked a little bit about the menu mix and the benefits of that. We continue to be pleased with the gains that we're seeing on labor. As an example, we have the labor wage inflation is benefiting from some of the improvements that we have made across the business, things like turnover, the back of house initiative rolled out in the third quarter. But embedded in that where we have some training costs and so on, so as we move into Q4, we'll get a, you know, more of a full benefit from that in into Q4. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:27:12So a number of the really a lot of the initiatives that we've been working on over the year are kind of starting to come to life in Q4. And so we're excited about the progress there. In spite of, you know, kind of a bit of a challenging backdrop, we think we're making good progress. Jake BartlettSenior Equity Research Analyst at Truist Securities00:27:33Okay, so it sounds like you're getting more labor leverage or some of those initiatives is offsetting the pressure you're expecting from the tariffs? Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:27:44Yeah, there are lot of moving pieces there. The tariffs is a $5,000,000 headwind for sure. But again, and the tariffs we didn't plan for at the beginning of the year, it's relatively we've been working on it here for quite a few months and the team has done a great job with that. But we also have a little bit of favorability in Q4 versus our prior thinking related to eggs. So that's a little bit of a partial offset to some of the headwinds from tariffs. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:28:18But I think the underlying kind of structural improvement kind of goes along with what Julie has been talking about here as a part of the transformation plan, which is, year one is a test and learn investment year. And we are bringing out to life now a lot of the things that we've been testing and learning and investing in. And so you're starting to see the benefit of the broader strategic work come to life, in particular as it relates to labor in this case. Jake BartlettSenior Equity Research Analyst at Truist Securities00:28:48Okay, and then another question on the tariffs, the $5,000,000 impact that you're seeing. Given your turnover of inventory, I guess I would have expected the real impact to start a little bit later and so not actually to hit much of the fourth quarter. So how do we think of that $5,000,000 impact? Is that directly or is, are your costs fully impacted by tariffs at this point in the fourth quarter? What are the mitigating you've talked about mitigating efforts? Jake BartlettSenior Equity Research Analyst at Truist Securities00:29:19What are they? Are there any in place in the fourth quarter? For instance, are you increasing retail prices to help offset the tariffs? Are you shifting away from the China supply? What are you doing in the fourth quarter? Jake BartlettSenior Equity Research Analyst at Truist Securities00:29:32And should we think of is it fair to think of that $5,000,000 as a good run rate as we think about 26,000,000 so $20,000,000 for the year? Or is it just way too early to tell at this point? Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:29:46Hey, Jake, I'll start and then I'll let Craig jump in because I'm sure I won't get all of that. It's an excellent question, right? So let me back up a little bit, right? The teams have been thinking about tariffs for months, right? This is a topic on the campaign trail. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:30:00Frankly, we have been working on a similar transformation for the retail business that we've been doing on the restaurant side. So really relooking at the strategy there, what are the pieces of the business that require a little bit of reinvention and what will that look like? And so thinking about that strategy and where we're going, there have been a couple of key things that the tariff situation have actually enabled us to accelerate. One of the key tenants of what we're looking at from a retail strategy is the number of SKUs that we have, the number of themes that we have, and the timing of when they hit the floor. We've been known to put Christmas and Halloween out quite early, and so we're readjusting some of that timing to really be more in time with where consumer needs state and demand is. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:30:47And so we've got a lot of moving pieces while this tariff thing is coming in. So the team's been really working for a while now on rationalizing SKUs, thinking about those themes, thinking about the timing, and moving all of those pieces. Now, specifically against the way tariffs are at the moment, and remember ninety days ago when we were sitting here it looked really different than where we're sitting today, and time continues to be a very big factor in all of this. But we actually have to keep going because we have a business to run. So the teams are really working with vendors. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:31:17Our vendor partners have been tremendous through this exercise. We've been able to negotiate with them. They're negotiating with their factories. We've been alternate sourcing for a while. Are there different parts of the world where some of these goods can come from? Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:31:30And then as a last lever and look, pricing is an option. But we're being very thoughtful about pricing because this business is so discretionary. And we know from work that we've done around the transformation that value is important in this business just like it is in our restaurant business. So we'll have more to share about how to think about 2026 and tariffs September, because we'll present our annual guidance and Jake and we'll go like a couple of clicks deeper on it at that point in time. But know that the teams are really working as we push our strategy forward, absorb this tariff situation and continue to just check and adjust against it. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:32:04I'm actually very pleased about how we've been able to absorb the impact so far here in fiscal twenty twenty five and what that looks like as we move forward. I don't know Craig, if there's anything you would add. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:32:15No, I think that's right. The team is doing a good job and it's dynamic and they continue to adjust and, you know, maybe one thing to just consider is, you know, there's an average inventory turn in there. But there's some things that are turning faster, and some things are a little bit longer. And then there are decisions that we're making now that are kind of in anticipation of the tariff impact in the future. So the big takeaway for us is while that's out there, the team has been working on this for months, they've made great progress and we anticipate even more progress. Jake BartlettSenior Equity Research Analyst at Truist Securities00:32:53Great, I appreciate it. Operator00:32:57Our next question comes from Brian Mulan from Piper Sandler. Please go ahead with your question. Brian MullanDirector & Senior Research Analyst at Piper Sandler Companies00:33:04Thank you. Question back to phase one of the back of the house optimization initiative. You know, just understanding the benefits are probably only just starting now in in fiscal q four. Can you just talk about or help us understand, do you anticipate a permanent reduction in labor hours in the back of the house as a result of this phase? And do those fall to the bottom line or do those get maybe reinvested into another area of the business? Brian MullanDirector & Senior Research Analyst at Piper Sandler Companies00:33:28And then related to that, I think there's a Phase II and then a Phase III that we will see over the next couple of years. Can you remind us what those phases are related to and when you transition into the second phase? Thank you. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:33:40Sure. Brian, I'll start and then I'll let Craig handle a couple of the specifics there on the movement of the savings. The goal, remember, of this entire work stream is to improve the quality of our food because we're mainly a restaurant business and make sure that we're always serving our delicious scratch made food, but making it easier for the teams to do that consistently and making the jobs more enjoyable. We've got a lot of processes in the back of the house that haven't changed a lot in a long time. That's really the genesis of this work. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:34:11As we got into it, as part of the transformation agenda, we've broken this work into three phases. This first phase that we launched in Q3 and so you're right to think that not all of the benefit is there, and I'll let Craig talk about that in a moment the first phase is really focused on some of those processes and changing the way that we actually make the food to improve the quality and make the jobs easier. So that's kind of Phase one. Phase two is about how do we take that even further by bringing in some ingredients that are already pre chopped and pre sliced and things like that, because today we do all of that by hand, or most of it by hand. And then phase three is, gosh, equipment has changed so much in the last few decades. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:34:50Are there equipment solutions that would also make it easier for our cooks and our prep cooks to do their work easier? So those three phases will phase out over the remaining years of the transformation. This phase one, I'll let Craig talk about how it's flowing through, but we're real pleased so far with the early days of this. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:35:08Yeah, I'll take the second part of that. We do expect the back of house initiative to flow through. Again, we didn't get the full benefit of that Q3 because there were some learning curve training and so on. We do expect more of a benefit in Q4 and into 2026. We've talked and we just talked a lot about 2025 being an investment year and a test and learn year. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:35:34So we do expect to get the benefit of this initiative on a more of a run rate basis as we finish up Q4 and into fiscal twenty twenty six. And it's really a part of that broader 50,000,000 to $60,000,000 cost save that we've talked about. Now as we go into back of house phase two, we expect to see some overall benefit to our total prime cost. But you might end up with a little bit of shift in between buckets there. A part of the plan here is to, in a more permanent way, improve the ease of operating the back of house and the consistency and the quality as well as the cost in a permanent structural way. Brian MullanDirector & Senior Research Analyst at Piper Sandler Companies00:36:23Thank you. That's great color. And then I just want to ask about remodeling initiative. You've called fiscal 'twenty five a test and learn year. So can you just talk about what you've learned thus far this year in terms of the different approaches you've taken with some of the projects? Brian MullanDirector & Senior Research Analyst at Piper Sandler Companies00:36:37And if you'd be willing to talk about your plans for fiscal twenty twenty six or how you're thinking about a number of stores or maybe CapEx? Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:36:46It's never a call until somebody asks us about remodels. So thanks for the question, Brian. As we've discussed, this has really been a year of testing and learning and so we are saving this topic for September. So we will talk a lot about it in September, really what we've learned in this year and what we continue to learn because honestly we're not done learning. We are really continuing to transform the organization to be one that's more agile and really to just continuously learn and improve as we go forward. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:37:17We've launched a new version of a remodel. Remember, we've got 20 remodels and 20 refreshes that as of right now are complete in the system. And we continue to be really pleased with what we're learning there, the impact that it's having on the system. Employees have given us great feedback about working in those newly remodeled and refreshed stores and guests continue to tell us that they're lighter, brighter, more welcoming and they're enjoying them as well. But at the April, we launched a new version of a remodel as well. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:37:47And so it's early, early days of that. We're very pleased with the early results of that. We've taken retail into a different way in this remodel as well. So there's just a lot to learn. And as you can imagine, it's only been thirty days of that. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:38:00That's really why we want to wait and have the conversation in September. We'll talk about how it's informing our '26 and beyond plan and really what we've learned to date as we continue to learn on this topic. Brian MullanDirector & Senior Research Analyst at Piper Sandler Companies00:38:11Okay. Thank you. Operator00:38:15And our next question comes from Sarah Sanatore from Bank of America. Please go ahead with your question. Sara SenatoreSenior Research Analyst at Bank of America00:38:20Thank you. I wanted to go back to the sort of traffic trends. I know that you had said that they started off soft in February and then improved. But I guess as you think about all these initiatives, you said consumers or customers are choosing Cracker Barrel, but the traffic is still pretty negative. So I guess maybe you could help me understand is this kind of a process where there are certain kinds of transactions that you're intentionally perhaps losing and then in lieu of Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:38:50that you're getting perhaps some more profitable transactions at the higher end of the barbell? And then with respect to the any kind of color on the trends across demographic groups? I know last quarter you had said you're actually seeing some better performance among 55 and up consumers. So does that continue? And does that say anything about kind of the efficacy of some of the traffic driving initiatives? Thanks. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:39:17Hi, Sarah, it's Craig. I'll start and I think Julie and I will share this one. The I think the thing I would keep in mind on the traffic for the quarter is there are pretty sizable differences in terms of, let's say, versus April. And so I would just keep that in mind. February was particularly challenged, the weather was tough, the macro uncertainty, there was a lot of news was elevated, but we've been pleased with the progress throughout the quarter. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:39:49And we've been pleased with the way that the fourth quarter has started. So we, you know, the work that we're doing here is really about bringing Hyperbarrel back profit double growth. And that includes traffic. And we think even though the overall quarter was challenged from a traffic perspective, we think the underlying trend is something that we're happy with. In terms of the demographic trends, would say it was pretty steady. Craig PommellsSVP and CFO at Cracker Barrel Old Country Store00:40:21There wasn't a big standout across the entire quarter. Our over 50 five cohorts performed similarly to our 55 cohorts, our 60 ks, over 60 ks income cohort performed similarly to our 60. I think the takeaway for us on the quarter is more about how the quarter developed and how the fourth quarter has started. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:40:49No, I think that's right. I think remember, we said this is an investment year and this is a three year plan and it's not going to be a straight line. There's going to be some bumps along the way, some of which you can anticipate, some of which you can't. I don't think anybody thought the macros would do what they did in February. I don't think anybody thought the weather would be as bad as it was on top of that. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:41:09So I'm real pleased with how we have actually managed through this quarter given some of those real strong headwinds at the beginning of the quarter. And then to Craig's point, I think, Sarah, we continue to be very optimistic and confident in the long term trends that we're seeing underneath the business. So I think Q3 is a little bit of a speed bump in kind of what's been a good year for us so far in terms of changing those trends and bending the curves that we need to bend to keep this transformation on track and take the brand where it needs to go long term. Sara SenatoreSenior Research Analyst at Bank of America00:41:40Thank you. Operator00:41:45And ladies and gentlemen, with that, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Julie Massino for closing remarks. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:41:56Thank you. I want to start with a huge thank you to the teams in our six fifty eight stores who bring the Cracker Barrel country hospitality to life every day for our guests. The executive team, the board and I really appreciate your smiles and hard work in what was I know a difficult quarter. And to everyone else on the call today, thank you for joining us today. Our plan is working and we are excited about what's ahead. Julie Felss MasinoPresident & CEO at Cracker Barrel Old Country Store00:42:19We appreciate your interest in the brand and we look forward to giving you our next update in September. Operator00:42:26Ladies and gentlemen, that does conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.Read moreParticipantsExecutivesAdam HananDirector - IRJulie Felss MasinoPresident & CEOCraig PommellsSVP and CFOAnalystsJeff farmerManaging Director at Gordon Haskett Research AdvisorsTodd BrooksEquity Research Analyst at The Benchmark Company LLCJake BartlettSenior Equity Research Analyst at Truist SecuritiesBrian MullanDirector & Senior Research Analyst at Piper Sandler CompaniesSara SenatoreSenior Research Analyst at Bank of AmericaPowered by