LEBANON, Tenn., Feb. 22, 2022 /PRNewswire/ -- Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the "Company") (Nasdaq: CBRL) today reported its financial results for the second quarter of fiscal 2022 ended January 28, 2022.

Second Quarter Fiscal 2022 Highlights

• Compared to the second quarter of fiscal 2019¹, total revenue increased by 6.2% including comparable store restaurant sales increase of 1.9%, comparable store retail sales increase of 13.7%, and 7 Cracker Barrel and 31 Maple Street net unit additions.
• Comparable store off-premise restaurant sales grew 123% compared to the second quarter of 2019¹ and represented approximately 24% of restaurant sales.
• GAAP operating income in the second quarter was $46.7 million, or 5.4% of total revenue, and adjusted² operating income was $49.8 million, or 5.8% of total revenue.
• GAAP net income was $37.6 million, or 4.4% of total revenue. EBITDA² was $75.4 million, or 8.7% of total revenue.
• GAAP earnings per diluted share were $1.60, and adjusted² earnings per diluted share were $1.71.

Commenting on the business, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, "I am pleased that we once again delivered improved restaurant sales and strong retail sales despite the impact of rising COVID cases during the second quarter, and even more pleased to be welcoming back our guests who we believe are eager to return to more normalized routines of travel and visitation as Omicron fades and concerns about indoor dining continue to subside.  Although we anticipate a peak inflationary environment in the third quarter for both commodities and wages that will pressure our third quarter operating margins, we are confident that our initiatives to welcome back our guests, drive sales, and manage costs will lead to a meaningful recovery of both top and bottom-line results in the fourth quarter and into fiscal 2023."

Second Quarter Fiscal 2022 Results

Revenue 
The Company reported total revenue of $862.3 million for the second quarter of fiscal 2022, representing an increase of 27.3% compared to the second quarter of fiscal 2021, and an increase of 6.2% compared to the second quarter of 2019. Cracker Barrel comparable store restaurant and retail sales compared to the second quarter of fiscal 2019¹ and versus the second quarter of fiscal 2021 were as follows:

The Company believes that providing comparable store sales results back to fiscal 2019, which is the most recent full fiscal year that was not impacted by COVID-19, provides a more useful comparison than comparing to COVID-impacted periods.

Operating Income
GAAP operating income for the second quarter was $46.7 million, or 5.4% of total revenue, a 224% increase compared to prior year quarter GAAP operating income of $14.4 million, or 2.1% of total revenue. Excluding the approximately $3.2 million in non-cash amortization related to the gains on the previously disclosed sale and leaseback transactions, adjusted² operating income for the second quarter was $49.8 million, or 5.8% of total revenue, a 184% increase over the prior year quarter adjusted² operating income of $17.6 million, or 2.6% of total revenue.

Net Income and EBITDA
GAAP net income for the second quarter was $37.6 million, or 4.4% of total revenue, a 169% increase compared to prior year quarter GAAP net income of $14.0 million, or 2.1% of total revenue. EBITDA² was $75.4 million, or 8.7% of total revenue, a 68% increase over the prior year quarter EBITDA² of $45.0 million, or 6.6% of total revenue.

Earnings per Diluted Share
GAAP earnings per diluted share for the second quarter were $1.60, a 171% increase compared to the prior year quarter GAAP earnings per diluted share of $0.59. Adjusted² earnings per diluted share were $1.71, a 144% increase over the prior year quarter adjusted² earnings per diluted share of $0.70.

Share Repurchases
The Company repurchased $34.2 million in shares during the second quarter as part of its September 2021 $100.0 million share repurchase authorization. When combined with $30.7 million in dividends paid, the Company returned a total of $64.9 million to shareholders in the second quarter.

Fiscal 2022 Outlook
The Company expects that headwinds from elevated COVID case counts early in the quarter, as well as seasonally lower demand patterns, will result in third quarter total revenue of approximately $800 million.

The Company also anticipates commodity inflation of approximately 15% and wage inflation of approximately 11% to 12% for the third quarter. Accounting for these factors, the Company expects to report third quarter adjusted² operating income margin of approximately 5.0% of total revenue.

For the fourth quarter, the Company expects that benefits from additional pricing and cost management actions, and a more favorable consumer and inflationary environment, will support a fourth quarter margin result approaching the prior year's fourth quarter margin.

For the second half of fiscal 2022, the Company expects:

• Capital expenditures of approximately $60 million;
• An effective tax rate of approximately 14%; and
• The opening of 2 new Cracker Barrel locations and between 9 and 11 new Maple Street Biscuit Company locations, in addition to the one Maple Street Biscuit Company location that opened in the second quarter.

The Company reminds investors that its outlook for fiscal 2022 reflects a number of assumptions, many of which are outside the Company's control.

¹ For the purpose of comparing to fiscal 2019, comparable stores are defined as restaurants open a full six months prior to the beginning of the FY19 baseline comparison period.
² For Non-GAAP reconciliations, please refer to the Reconciliation of GAAP-basis operating results to non-GAAP operating results section of this release.

Fiscal 2022 Second 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 March 8, 2022.

About Cracker Barrel Old Country Store^®
Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) provides a caring and friendly home-away-from-home experience while offering guests high-quality homestyle food to enjoy in-store or to-go and unique shopping — all at a fair price. Established in 1969 in Lebanon, Tenn., Cracker Barrel and its affiliates operate more than 660 company-owned Cracker Barrel Old Country Store® locations in 45 states and own the fast-casual Maple Street Biscuit Company. For more information about the Company, visit crackerbarrel.com.

CBRL-F

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 information is subject to completion of our financial procedures for Q2 FY 2022 and is 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 COVID-19 on our business, financial condition and results of operations and 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: risks and uncertainties associated with the COVID-19 pandemic, including the duration of the COVID-19 pandemic and its ultimate impact on our business, levels of consumer confidence in the safety of dine-in restaurants, restrictions (including occupancy restrictions) imposed by governmental authorities, the effectiveness of cost saving measures undertaken throughout our operations, disruptions to our operations as a result of the spread of COVID-19 in our workforce, and our level of indebtedness, or constraints on our expenditures, ability to service our debt obligations or make cash distributions to our shareholders or cash management generally; general or regional economic weakness, business and societal conditions, 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 acquired businesses, strategic investments and other initiatives that we may pursue now or in the future; 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; 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 changes in consumer health or dietary trends or safety aspects of our food or products or those of the restaurant industry in general, including concerns about outbreaks of infectious disease, 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, including under our credit facility and our convertible senior notes, and associated restrictions on our financial and operating flexibility and ability to execute or pursue our operating plans and objectives; changes in interest rates, increases in borrowed capital or capital market conditions affecting our financing costs and ability to refinance all or portions of our indebtedness; the effects of dilution of our existing stockholders' ownership interest that may ensue from any conversions of our convertible senior notes or the related warrants issued in connection with our convertible note hedging transactions; 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 or our ability to manage the impact of social media associated with these activities; economic or psychological effects of natural disasters or unforeseen events such as terrorist acts, social unrest or war and the military or government responses to such events; disruptions to our restaurant or retail supply chain, including as a result of COVID-19; changes in foreign exchange rates affecting our future retail inventory purchases; the impact of activist shareholders; our reliance on limited distribution facilities and certain significant vendors; 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 non-GAAP operating results
(Unaudited)

Adjusted Operating Income and Earnings Per Share
In the accompanying press release, the Company makes reference to its second quarter fiscal 2021 and fiscal 2022 adjusted operating income and earnings per share. In regards to fiscal 2022, this reconciliation excludes non-cash amortization of the asset recognized from the gains on the sale and leaseback transactions and the related tax impact. In regards to fiscal 2021, this reconciliation excludes the gain on sale of assets from the sale-leaseback transaction that closed in the first quarter, non-cash amortization of the asset recognized from the gains on sale-leaseback transactions, expenses related to the proxy contest initiated by affiliates of Sardar Biglari in connection with the Company's 2020 annual meeting of shareholders, and the related tax impacts of these items. The Company believes excluding these items from its financial results provides investors with an enhanced understanding of the Company's financial results and enhances comparability across periods. This information is not intended to be considered in isolation or as a substitute for operating income or earnings per share information prepared in accordance with GAAP.

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

EBITDA
In the accompanying press release, the Company makes reference to its second quarter fiscal 2021 and 2022 EBITDA. The Company defines EBITDA as net income excluding depreciation and amortization, non-cash amortization of the asset recognized from the gains on sale and leaseback transactions, interest expense and tax expense. The Company believes that presentation of EBITDA provides investors with an enhanced understanding of the Company's operating performance and debt leverage metrics, and that the presentation of this non-GAAP financial measure, when combined with the primary presentation of net income, is beneficial to an investor's complete understanding of its operating performance. For 2021, the Company then excludes the gain on sale of assets from the sale-leaseback transaction that closed in the first quarter of 2021 and expenses related to the proxy contest initiated by affiliates of Sardar Biglari in connection with the Company's 2020 annual meeting of shareholders to calculate Adjusted EBITDA. The Company makes additional adjustments to EBITDA because the Company believes that excluding these items from Adjusted EBITDA enhances comparability across periods.   This information is not intended to be considered in isolation or as a substitute for net income prepared in accordance with GAAP.

Reconciliation of GAAP-basis Operating Income Margin outlook to non-GAAP Operating Income Margin outlook
In the accompanying press release, the Company provides its current outlook for adjusted operating income margin, a non-GAAP financial measure, for the third quarter of fiscal 2022.  The Company's adjusted operating income margin outlook excludes the expected non-cash amortization of the asset recognized from the gains on the sale and leaseback transactions.  The Company believes presenting its current outlook for adjusted operating income margin that excludes these items provides investors with an enhanced understanding of the Company's expected margin performance and enhances comparability with the Company's historical results. This information is not intended to be considered in isolation or as a substitute for operating income margin outlook reported in accordance with GAAP.

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SOURCE Cracker Barrel Old Country Store, Inc.