Cracker Barrel Old Country Store, Inc. Q4 FY2025 earnings call

• Brand refresh: Pivoted back to old-timer logo, adjusted marketing/advertising, hit pause on remodels for 4 locations with modern design. - Food and menu: Instituted process changes for signature biscuits, brought back old favorites like Uncle Herschel's breakfast, introduced new dishes, and continued back-of-house optimization phases. - Loyalty program: Over 9 million members, membership increasing in recent weeks, launching front porch feedback for direct guest input. - Service principles: Implemented The Herschel Way inspired by Uncle Herschel. - Remodel program: Paused further remodels, reverted 4 modern design locations to traditional, and adjusted capital investment plan focusing on maintenance.

For Q4, total revenue was $868 million. Restaurant revenue was $718.2 million (82.7% of total revenue) with comparable store restaurant sales growth of 5.4%. Retail revenue was $149.8 million (17.3% of total revenue) with comparable store retail sales decreasing by 0.8%. Adjusted EBITDA was $55.7 million or 6.4% of total revenue. Excluding the 53rd week impact, adjusted EBITDA increased by 8%.

• Fiscal 2026 revenue expected $3.35 billion to $3.45 billion with annual traffic negative 4% to negative 7%. - Adjusted EBITDA expected $150 million to $190 million. - Q1 adjusted EBITDA significantly below prior year due to lower traffic and ~$16 million in additional costs (marketing, general managers conference, training). - Capital expenditures for 2026 ~$135 million to $150 million, 60% maintenance, 35% technology, 5% new units with no new remodels.

• Traffic declines post-logo change and other factors. - Intense market competition affecting top line. - Operational challenges from recent brand and remodel changes impacting margins and traffic.

Q: How is the marketing plan for 2026 regarding traffic recovery?

A: Julie Masino says marketing as a percent of sales will be a bit higher in 2026 than 2025, with Q1 up a bit, continuing to invest in marketing to drive traffic.

Q: What about margin guidance for 2026?

A: Craig Pommells says the biggest driver in EBITDA consideration is traffic, with a range of negative 7% to negative 4% traffic impact, and flow-through rate between 30% and 45%.

Q: How does Cracker Barrel's value proposition hold up against competition?

A: Julie Masino notes Cracker Barrel offers great value with check around $15, abundant scratch-made food, loyalty program, and barbell strategy resonating with guests.

Q: What about CapEx and maintenance?

A: Craig Pommells says longer term, on an inflation-adjusted basis, $125 million is a base spend amount, with 60% of 2026 CapEx being maintenance ($80 million to $90 million).

Q: How is the loyalty program performing post-logo change?

A: Julie Masino says loyalty program sign-ups are ahead of plan, with 400,000 sign-ups quarter-to-date and 300,000 since 08/19, and launching front porch feedback to aggregate guest input.