Cracker Barrel Old Country Store Inc. reported slower-than-anticipated sales performance during the fourth quarter of 2021 ended July 30, with same-store sales down 6.8% compared to the same quarter in 2019. CEO Sandra Cochran points to a sluggish summer travel season impacted by the delta variant as a major proponent of these lagging quarterly results, as well as staffing challenges and customer preference for pricier special occasion dining over family dining occasions.
But even though Cracker Barrels’ results were not where they thought they’d be, company performance was boosted by retail sales up 18.2% and the surprising positive results of the Maple Street Biscuit Company, which Cracker Barrel purchased in 2019, reporting AUVs of $1.2 million per store.
“This past year was one of the most challenging and are more than 50-year history,” Cochran said during Tuesday’s quarterly earnings call. “For years leading up to the pandemic, Cracker Barrel outperformed the industry by leaning into our core competitive advantages, including our authentic experiential brand, our culture of hospitality in our homestyle, food and retail assortments, we remain focused on these core strengths. And we believe they'll continue to drive long term success and outperformance of our brand.”
Cochran emphasized that like many restaurants, the core of their challenges had a lot to do with understaffed restaurants, which were especially felt on the weekends as some stores did not have enough staff to serve the increased crowds of guests. Right now, she said, they’re focused on training of new employees and retention to ensure that labor challenges don’t get worse.
Not surprisingly, off-premises performance was up 108% for the company since the same quarter in 2019, attributable to the change in consumer habits since the pandemic. Cochran emphasized that digital sales and takeout will continue to be an area of growth for the company.
“The work we did to enhance our digital systems and launch our digital store was foundational not only to our continued growth in off premise, but also to improving the frequency of visits from the core users of the brand,” she said during Tuesday’s call. “This work provides us with the technological infrastructure and rich guest data to drive additional guest frequency in fiscal ’22, including increased personalization and customization in our digital marketing in the introduction of a loyalty program.”
Cochran said that they will be soon launching a loyalty program, with a test pilot coming in the second half of the year.
Looking forward, Cracker Barrel hopes to open 15 more Maple Street Biscuit Company locations over the next year and begin a revamp of Cracker Barrel’s breakfast menu, just as lunch and dinner were evolved to match consumer’s changing tastes.
They also mentioned a continued rollout of the Cracker Barrel virtual brand — Chicken and Biscuits — which added another 100 locations this summer and will have 500 locations by the end of the first quarter of 2022. Cracker Barrel will also be launching a second virtual brand called Pancake Kitchen, with plans to roll out 100 locations in fiscal year 2022.
Cracker Barrel reported a total revenue of $784.4 for the fourth quarter, essentially flat compared with the same quarter in 2019. Net income was $36.4 million or $1.53 earnings per share, up 45% from $25.1 million or $1.05 the same quarter the year prior.
Cracker Barrel ended the fourth quarter with zero store openings, for a total of 701 Cracker Barrel and Maple Street Biscuit locations.
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