Cracker Barrel Reports Strong Fourth Quarter And Full Year Fiscal 2019 Results

LEBANON, Tenn., Sept. 17, 2019 /PRNewswire/ --  Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the "Company") (Nasdaq: CBRL) today reported its financial results for the fourth quarter of fiscal 2019 ended August 2, 2019.

Fourth Quarter Fiscal 2019 Highlights

• Comparable store restaurant sales growth of 3.8% and traffic growth of 0.2% outperformed the casual dining industry.
• Earnings per diluted share were $2.70 compared to prior year fourth quarter GAAP earnings per diluted share of $2.55, or $2.19 per share when adjusting for the impact of the prior year 53^rd week.
• As previously announced, the Company entered into a strategic relationship with Punch Bowl Social ("PBS") on July 18, 2019 by acquiring a non-controlling ownership stake in PBS.

Full Year Fiscal 2019 Highlights

• For the full fiscal year, comparable store restaurant sales growth of 2.6% and traffic of -0.7% outperformed the casual dining industry.
• Fiscal 2019 earnings per diluted share were $9.27 compared to prior year GAAP earnings per diluted share of $10.29 (including a $1.06 per share benefit in Q2 2018 resulting from a one-time non-cash revaluation of the Company's deferred tax liability in conjunction with the Tax Cut and Jobs Act of 2017) and adjusted earnings per diluted share of $8.87 (see non-GAAP reconciliation below).
• During fiscal 2019, the Company declared regular quarterly dividends totaling $5.05 per share. Additionally, the Company declared a special dividend of $3.00 per share, bringing the total declared dividends in fiscal 2019 to $8.05 per share.

Commenting on the fourth quarter and full year results, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, "In fiscal 2019, our teams drove performance through an increased focus on our menu, the guest experience, and the continued expansion of our off-premise business. We ended the fiscal year with a strong quarter, delivering comparable store restaurant sales and traffic growth in the fourth quarter that outperformed the casual dining industry, and I was especially pleased with the results of our Signature Fried Chicken initiative. As we enter our 50^th year of Pleasing People, we believe our fiscal 2020 business plans will help build on our momentum and support long-term value creation."

Fourth Quarter Fiscal 2019 Results
Revenue
The Company reported total revenue of $787.1 million for the fourth quarter of fiscal 2019, representing a decrease of 2.9% over the fourth quarter of the prior year, which included a 53^rd week. Adjusting for the impact of the extra week in fiscal 2018, revenue increased 4.6%. Cracker Barrel comparable store restaurant sales increased 3.8%, representing a 3.6% increase in average check and a 0.2% increase in comparable store restaurant traffic. The average menu price increase for the quarter was approximately 2.3%. Comparable store retail sales increased 0.4% from the prior year quarter.

Cracker Barrel comparable store restaurant traffic, average check, and comparable store restaurant sales and retail sales for the fourth quarter were as follows:

Operating Income
Operating income in the fourth quarter was $79.4 million, or 10.1% of total revenue, a decrease from the prior year quarter of $82.8, or 10.2% of revenue. As a percentage of total revenue, increases in other operating expenses and general and administrative expenses were partially offset by reductions in cost of goods sold and labor and related expenses. Adjusted for the impact of the 53^rd week, prior year operating income was $71.5 million, or 9.5% of sales.   

Earnings per Diluted Share
Earnings per diluted share were $2.70 compared to prior year fourth quarter GAAP earnings per diluted share of $2.55, or $2.19 per share when adjusting for the impact of the 53^rd week.

Fiscal 2019 Results
The Company reported total revenue of $3.07 billion for the fiscal year, representing an increase of 1.4% over the prior year. Adjusted for the 53^rd week in the prior fiscal year, total revenue increased by 3.4%. Comparable store restaurant sales increased 2.6%, including a 3.3% increase in average check partially offset by a 0.7% decrease in store traffic. Comparable store retail sales increased 0.1% for the fiscal year.

Operating income for fiscal 2019 was $282.8 million, or 9.2% of total revenue, compared to $293.6 million, or 9.7% of total revenue, in the prior year. Adjusted for the 53^rd week in the prior fiscal year, operating income was $282.4 million, or 9.5% of total revenue.

Fiscal 2019 earnings per diluted share were $9.27 compared to prior year GAAP earnings per diluted share of $10.29 (including a $1.06 per share benefit in Q2 2018 resulting from a one-time non-cash revaluation of the Company's deferred tax liability in conjunction with the Tax Cut and Jobs Act of 2017) and adjusted earnings per diluted share of $8.87 (see non-GAAP reconciliation below).

Fiscal 2020 Outlook
The Company is providing the following outlook for fiscal 2020:

• Total revenue of $3.15 billion to $3.20 billion
• Comparable store restaurant sales growth of 2.0% to 3.0%
• Comparable store retail sales growth of approximately 1.0%
• Operating income margin of approximately 9.0% as a percent of total revenue
• Depreciation expense of $110 million to $115 million
• Net interest expense of approximately $14 million
• Capital expenditures of $115 million to $125 million
• An effective tax rate of approximately 17.0%, which assumes a renewal of the Work Opportunity Tax Credit
• Earnings per diluted share, excluding any impacts from Punch Bowl Social, between $9.30 and $9.45
• The Company anticipates its investment in Punch Bowl Social will have an unfavorable impact of approximately $0.50, driven primarily by pre-opening expenses; taking these impacts into account, the Company expects to report earnings per diluted share between $8.80 and $8.95

The Company reminds investors that its outlook for fiscal 2020 reflects a number of assumptions, many of which are outside the Company's control.

Fiscal 2019 Fourth Quarter Conference Call
As previously announced, the live broadcast of Cracker Barrel's quarterly conference call will be available to the public on-line at investor.crackerbarrel.com today beginning at 11:00 a.m. (ET). The on-line replay will be available at 2:00 p.m. (ET) and continue through October 2, 2019.

About Cracker Barrel Old Country Store^®
Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) provides a friendly home-away-from-home in its old country stores and restaurants. Guests are cared for like family while relaxing and enjoying real homestyle food and shopping that's surprisingly unique, genuinely fun and reminiscent of America's country heritage – all at a fair price. Established in 1969 in Lebanon, Tenn., Cracker Barrel and its affiliates operate 660 company-owned Cracker Barrel Old Country Store® locations in 45 states and own the fast-casual Holler and Dash® restaurants. For more information about the company, visit crackerbarrel.com.

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Except for specific historical information, certain of the matters discussed in this press release may express or imply projections of revenues or expenditures, statements of plans and objectives or future operations or statements of future economic performance. These, and similar statements are forward-looking statements concerning matters that involve risks, uncertainties and other factors which may cause the actual performance of Cracker Barrel Old Country Store, Inc. and its subsidiaries to differ materially from those expressed or implied by this discussion. All forward-looking statements are subject to completion of our financial procedures for Q4 FY 2019 and are provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "trends," "assumptions," "target," "guidance," "outlook," "opportunity," "future," "plans," "goals," "objectives," "expectations," "near-term," "long-term," "projection," "may," "will," "would," "could," "expect," "intend," "estimate," "anticipate," "believe," "potential," "regular," "should," "projects," "forecasts," or "continue" (or the negative or other derivatives of each of these terms) or similar terminology and include the expected effects of operational improvement initiatives, such as new menu items and retail offerings. Factors which could materially affect actual results include, but are not limited to: the effects of uncertain consumer confidence, higher costs for energy, general or regional economic weakness, and weather on sales and customer travel, discretionary income or personal expenditure activity of our customers; information technology-related incidents, including data privacy and information security breaches, whether as a result of infrastructure failures, employee or vendor errors, or actions of third parties; our ability to identify, acquire and sell successful new lines of retail merchandise and new menu items at our restaurants; our ability to sustain or the effects of plans intended to improve operational or marketing execution and performance; uncertain performance of strategic investments and other initiatives that we may pursue now or in the future, including our non-controlling ownership interest in PBS; changes in or implementation of additional governmental or regulatory rules, regulations and interpretations affecting tax, wage and hour matters, health and safety, pensions, insurance or other undeterminable areas; the effects of plans intended to promote or protect our brands and products; commodity price increases; the ability of and cost to us to recruit, train, and retain qualified hourly and management employees in an escalating wage environment; the effects of increased competition at our locations on sales and on labor recruiting, cost, and retention; workers' compensation, group health and utility price changes; consumer behavior based on negative publicity or concerns over nutritional or safety aspects of our food or products or those of the restaurant industry in general, including concerns about pandemics, as well as the possible effects of such events on the price or availability of ingredients used in our restaurants; the effects of our indebtedness and associated restrictions on our financial and operating flexibility and ability to execute or pursue our operating plans and objectives; changes in interest rates or capital market conditions affecting our financing costs and ability to refinance all or portions of our indebtedness; the effects of business trends on the outlook for individual restaurant locations and the effect on the carrying value of those locations; our ability to retain key personnel; the availability and cost of suitable sites for restaurant development and our ability to identify those sites; our ability to enter successfully into new geographic markets that may be less familiar to us; changes in land, building materials and construction costs; the actual results of pending, future or threatened litigation or governmental investigations and the costs and effects of negative publicity associated with these activities; practical or psychological effects of natural disasters or terrorist acts or war and military or government responses; disruptions to our restaurant or retail supply chain; changes in foreign exchange rates affecting our future retail inventory purchases; implementation of new or changes in interpretation of existing accounting principles generally accepted in the United States of America ("GAAP"); and other factors described from time to time in our filings with the Securities and Exchange Commission, press releases, and other communications. Any forward-looking statement made by us herein, or elsewhere, speaks only as of the date on which made. We expressly disclaim any intent, obligation or undertaking to update or revise any forward-looking statements made herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

CRACKER BARREL OLD COUNTRY STORE, INC.
Reconciliation of GAAP basis operating results to adjusted non-GAAP operating results
(Unaudited)

In the accompanying press release the Company makes reference to its full year and fourth quarter 2018 adjusted revenues, operating income and earnings per share which excluded the impact of the 53^rd week during the 2018 fiscal year and the one-time non-cash revaluation of a net deferred tax liability in the 2018 fiscal year. The Tax Cuts and Jobs Act of 2017, which became effective on January 1, 2018 and prior to the end of our fiscal 2018 second quarter, lowered the federal corporate income tax rate to 21%.  During the second quarter of fiscal 2018, the Company recorded a provisional tax benefit for re-measurement of deferred tax liabilities due to this rate change of approximately $25 million. The Company believed that excluding this item from its financial results reflected the cash impact of tax reform for fiscal 2018, and as such provided investors with an enhanced understanding of the Company's financial results.  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.

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SOURCE Cracker Barrel Old Country Store, Inc.