Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
|
(Address of principal executive offices)
|
(Zip code)
|
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Rights to Purchase Series A Junior Participating
Preferred Stock (Par Value $0.01)
|
|
(Nasdaq Global Select Market)
|
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company
|
Emerging growth company
|
PART I. FINANCIAL INFORMATION
|
Page
|
|||
ITEM 1. Financial Statements (Unaudited)
|
||||
3
|
||||
4
|
||||
5
|
||||
6
|
||||
7
|
||||
15
|
||||
26
|
||||
26
|
||||
PART II. OTHER INFORMATION
|
||||
27
|
||||
27
|
||||
28
|
||||
29
|
ASSETS
|
January 27,
2023
|
July 29,
2022*
|
||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Accounts receivable
|
|
|
||||||
Inventories
|
|
|
||||||
Prepaid expenses and other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Property and equipment
|
|
|
||||||
Less: Accumulated depreciation and amortization
|
|
|
||||||
Property and equipment – net
|
|
|
||||||
Operating lease right-of-use assets, net
|
|
|
||||||
Goodwill
|
|
|
||||||
Intangible assets
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Taxes withheld and accrued
|
||||||||
Other current liabilities
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Long-term debt
|
|
|
||||||
Long-term operating lease liabilities
|
|
|
||||||
Other long-term obligations
|
|
|
||||||
Commitments and Contingencies (Note 10)
|
|
|||||||
Shareholders’ Equity:
|
||||||||
Preferred stock –
|
|
|
||||||
Common stock –
|
|
|
||||||
Retained earnings
|
|
|
||||||
Total shareholders’ equity
|
|
|
||||||
Total liabilities and shareholders’ equity
|
$
|
|
$
|
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
|||||||||||||
Total revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Cost of goods sold (exclusive of depreciation and rent)
|
|
|
|
|
||||||||||||
Labor and other related expenses
|
|
|
|
|
||||||||||||
Other store operating expenses
|
|
|
|
|
||||||||||||
General and administrative expenses
|
|
|
|
|
||||||||||||
Operating income
|
|
|
|
|
||||||||||||
Interest expense, net
|
|
|
|
|
||||||||||||
Income before income taxes
|
|
|
|
|
||||||||||||
Provision for income taxes
|
|
|
|
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net income per share:
|
||||||||||||||||
Basic
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Weighted average shares:
|
||||||||||||||||
Basic
|
|
|
|
|
||||||||||||
Diluted
|
|
|
|
|
Common Stock
|
Additional
Paid-In
|
Retained
|
Total
Shareholders’
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Equity
|
||||||||||||||||
Balances at July 29,
2022
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
Comprehensive Income:
|
||||||||||||||||||||
Net income
|
—
|
|
|
|
|
|||||||||||||||
Total comprehensive income
|
—
|
|
|
|
|
|||||||||||||||
Cash dividends declared - $
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Share-based compensation
|
—
|
|
|
|
|
|||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||
Purchases and retirement of common stock
|
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Balances at October 28, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
Comprehensive Income:
|
||||||||||||||||||||
Net income
|
—
|
|
|
|
|
|||||||||||||||
Total comprehensive income
|
—
|
|
|
|
|
|||||||||||||||
Cash dividends declared - $
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Share-based compensation
|
—
|
|
|
|
|
|||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||
Purchases and retirement of common stock
|
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Balances at January 27,
2023
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Common Stock
|
Additional
Paid-In
|
Retained
|
Total
Shareholders’
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Equity
|
||||||||||||||||
Balances at July 30, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
Comprehensive Income:
|
||||||||||||||||||||
Net income
|
—
|
|
|
|
|
|||||||||||||||
Total comprehensive income
|
—
|
|
|
|
|
|||||||||||||||
Cash dividends declared - $
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Share-based compensation
|
—
|
|
|
|
|
|||||||||||||||
Cumulative-effect of change in accounting
principle, net of taxes (see Note 1)
|
( |
) | ( |
) | ||||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||
Balances at October 29, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
Comprehensive Income:
|
||||||||||||||||||||
Net income
|
—
|
|
|
|
|
|||||||||||||||
Total comprehensive income
|
—
|
|
|
|
|
|||||||||||||||
Cash dividends declared - $
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Share-based compensation
|
—
|
|
|
|
|
|||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||
Purchases and retirement of common stock
|
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Balances at January 28,
2022
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Six Months Ended
|
||||||||
January 27,
2023
|
January 28,
2022
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Amortization of debt issuance costs
|
||||||||
Loss on disposition of property and equipment
|
|
|
||||||
Share-based compensation
|
|
|
||||||
Noncash lease expense
|
|
|
||||||
Amortization of asset recognized from gain on sale and leaseback transactions
|
|
|
||||||
Changes in assets and liabilities:
|
||||||||
Inventories
|
|
(
|
)
|
|||||
Other current assets
|
(
|
)
|
(
|
)
|
||||
Accounts payable
|
(
|
)
|
(
|
)
|
||||
Taxes withheld and accrued
|
( |
) | ||||||
Deferred revenues
|
||||||||
Other current liabilities
|
|
(
|
)
|
|||||
Long-term operating lease liabilities
|
( |
) | ( |
) | ||||
Other long-term assets and liabilities
|
(
|
)
|
(
|
)
|
||||
Net cash provided by operating activities |
|
|
||||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
||||
Proceeds from insurance recoveries of property and equipment
|
|
|
||||||
Proceeds from sale of property and equipment
|
|
|
||||||
Acquisition of business, net of cash acquired
|
|
(
|
)
|
|||||
Net cash used in investing activities |
(
|
)
|
(
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of long-term debt |
||||||||
Taxes withheld from issuance of share-based compensation awards
|
(
|
)
|
(
|
)
|
||||
Principal payments under long-term debt
|
( |
) | ( |
) | ||||
Purchases and retirement of common stock |
( |
) | ( |
) | ||||
Dividends on common stock
|
(
|
)
|
(
|
)
|
||||
Net cash used in financing activities |
(
|
)
|
(
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
|
(
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest, net of amounts capitalized
|
$
|
|
$
|
|
||||
Income taxes
|
$
|
|
$
|
|
||||
Supplemental schedule of non-cash investing and financing activities*:
|
||||||||
Capital expenditures accrued in accounts payable
|
$
|
|
$
|
|
||||
Dividends declared but not yet paid
|
$
|
|
$
|
|
1. |
Condensed Consolidated Financial Statements
|
2. |
Fair Value Measurements
|
Level 1
|
Level 2
|
Level 3
|
Total Fair
Value
|
|||||||||||||
Cash equivalents*
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Deferred compensation plan assets**
|
|
|||||||||||||||
Total assets at fair value
|
$
|
|
Level 1
|
Level 2
|
Level 3
|
Total Fair
Value
|
|||||||||||||
Cash equivalents*
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Deferred compensation plan assets**
|
|
|||||||||||||||
Total assets at fair value
|
$
|
|
3. |
Inventories
|
January 27, 2023
|
July 29, 2022
|
|||||||
Retail
|
$
|
|
$
|
|
||||
Restaurant
|
|
|
||||||
Supplies
|
|
|
||||||
Total
|
$
|
|
$
|
|
4. |
Debt
|
January 27, 2023
|
July 29, 2022 | |||||||
Liability component
Principal
|
$
|
|
$ | |||||
Less: Debt issuance costs (1)
|
|
|||||||
Net carrying amount
|
$
|
|
$ |
(1)
|
|
Quarter Ended | Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
|||||||||||||
Coupon interest
|
$ | $ |
$
|
|
$
|
|
||||||||||
Amortization of issuance costs
|
|
|
||||||||||||||
Total interest expense
|
$ |
$ |
$
|
|
$
|
|
5. |
Seasonality
|
6. |
Segment Information
|
7. |
Revenue Recognition
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
|||||||||||||
Revenue:
|
||||||||||||||||
Restaurant
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Retail
|
|
|
|
|
||||||||||||
Total revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
8. |
Leases
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
|
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
||||||||||||
Operating lease cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Short term lease cost
|
|
|
|
|
||||||||||||
Variable lease cost
|
|
|
|
|
||||||||||||
Total lease cost
|
$
|
|
$
|
|
$
|
|
$
|
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022 |
January 27,
2023
|
January 28,
2022
|
|||||||||||||
Operating cash flow information:
|
||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Noncash information:
|
||||||||||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities
|
|
|
|
|
||||||||||||
Lease modifications or reassessments increasing or decreasing right-of-use assets
|
|
|
|
|
||||||||||||
Lease modifications removing right-of-use assets
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
January 27, 2023
|
January 28, 2022
|
|||||||
Weighted-average remaining lease term
|
|
|
||||||
Weighted-average discount rate
|
|
%
|
|
%
|
Year
|
Total
|
|||
Remainder of 2023
|
$
|
|
||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
Thereafter
|
|
|||
Total future minimum lease payments
|
|
|||
Less imputed remaining interest
|
(
|
)
|
||
Total present value of operating lease liabilities
|
$
|
|
9. |
Net Income Per Share and Weighted Average Shares
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
|||||||||||||
Net income per share numerator
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net income per share denominator:
|
||||||||||||||||
Weighted average shares
|
|
|
|
|
||||||||||||
Add potential dilution:
|
||||||||||||||||
Nonvested stock awards and units
|
|
|
|
|
||||||||||||
Diluted weighted average shares
|
|
|
|
|
10. |
Commitments and Contingencies
|
• |
Comparable store restaurant sales increase/(decrease): To calculate comparable store restaurant sales increase/(decrease), we determine total restaurant sales of stores open at least six full quarters before the beginning of the
applicable period, measured on comparable calendar weeks. We then subtract total comparable store restaurant sales for the current year period from total comparable store restaurant sales for the applicable historical period to calculate
the absolute dollar change. To calculate comparable store restaurant sales increase/(decrease), which we express as a percentage, we divide the absolute dollar change by the comparable store restaurant sales for the historical period.
|
• |
Comparable store average restaurant sales: To calculate comparable store average restaurant sales, we determine total restaurant sales of stores open at least six full quarters before the beginning of the applicable period,
measured on comparable calendar weeks, and divide by the number of comparable stores for the applicable period.
|
• |
Comparable store retail sales increase/(decrease): To calculate comparable store retail sales increase/(decrease), we determine total retail sales of stores open at least six full quarters before the beginning of the applicable
period, measured on comparable calendar weeks. We then subtract total comparable store retail sales for the current year period from total comparable store retail sales for the applicable historical period to calculate the absolute
dollar change. To calculate comparable store retail sales increase/(decrease), which we express as a percentage, we divide the absolute dollar change by the comparable store retail sales for the historical period.
|
• |
Comparable store retail average weekly sales: To calculate comparable store average retail sales, we determine total retail sales of stores open at least six full quarters before the beginning of the applicable period, measured
on comparable calendar weeks, and divide by the number of comparable stores for the applicable period.
|
• |
Comparable restaurant guest traffic increase/(decrease): To calculate comparable restaurant guest traffic increase/(decrease), we determine the number of entrees sold in our dine-in and off-premise business from stores open at
least six full quarters at the beginning of the applicable period, measured on comparable calendar weeks. We then subtract total entrees sold for the current year period from total entrees sold for the applicable historical period to
calculate the absolute numerical change. To calculate comparable restaurant guest traffic increase/(decrease), which we express as a percentage, we divide the absolute numerical change by the total entrees sold for the historical period.
|
• |
Average check increase per guest: To calculate average check per guest, we determine comparable store restaurant sales, as described above, and divide by comparable guest traffic (as described above). We then subtract average
check per guest for the current year period from average check per guest for the applicable historical period to calculate the absolute dollar change. The absolute dollar change is divided by the prior year average check number to
calculate average check increase per guest, which we express as a percentage.
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
|||||||||||||
Total revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||||
Cost of goods sold (exclusive of depreciation and rent)
|
35.0
|
32.9
|
34.3
|
32.0
|
||||||||||||
Labor and other related expenses
|
33.6
|
34.4
|
34.1
|
34.7
|
||||||||||||
Other store operating expenses
|
22.4
|
22.3
|
22.9
|
22.8
|
||||||||||||
General and administrative expenses
|
4.8
|
5.0
|
5.2
|
5.1
|
||||||||||||
Operating income
|
4.2
|
5.4
|
3.5
|
5.4
|
||||||||||||
Interest expense, net
|
0.5
|
0.2
|
0.4
|
0.3
|
||||||||||||
Income before income taxes
|
3.7
|
5.2
|
3.1
|
5.1
|
||||||||||||
Provision for income taxes
|
0.4
|
0.8
|
0.4
|
0.8
|
||||||||||||
Net income
|
3.3
|
%
|
4.4
|
%
|
2.7
|
%
|
4.3
|
%
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
|
January 28,
|
January 27,
|
January 28,
|
|||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Net change in units:
|
||||||||||||||||
Company-owned – Cracker Barrel
|
1
|
—
|
1
|
—
|
||||||||||||
Company-owned – MSBC
|
2
|
1
|
5
|
1
|
||||||||||||
Units in operation at end of the period:
|
||||||||||||||||
Company-owned – Cracker Barrel
|
665
|
664
|
665
|
664
|
||||||||||||
Company-owned – MSBC
|
56
|
38
|
56
|
38
|
||||||||||||
Total Company-owned units at end of the period
|
721
|
702
|
721
|
702
|
||||||||||||
Franchise – MSBC
|
—
|
7
|
—
|
7
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
|||||||||||||
Revenue in dollars:
|
||||||||||||||||
Restaurant
|
$
|
718,002
|
$
|
656,080
|
$
|
1,380,236
|
$
|
1,271,494
|
||||||||
Retail
|
215,866
|
206,180
|
393,151
|
375,696
|
||||||||||||
Total revenue
|
$
|
933,868
|
$
|
862,260
|
$
|
1,773,387
|
$
|
1,647,190
|
||||||||
Total revenue by percentage relationships:
|
||||||||||||||||
Restaurant
|
76.9
|
%
|
76.1
|
%
|
77.8
|
%
|
77.2
|
%
|
||||||||
Retail
|
23.1
|
%
|
23.9
|
%
|
22.2
|
%
|
22.8
|
%
|
||||||||
Average unit volumes(1):
|
||||||||||||||||
Restaurant
|
$
|
1,057.3
|
$
|
970.7
|
$
|
2,032.2
|
$
|
1,880.8
|
||||||||
Retail
|
324.6
|
310.3
|
591.5
|
565.4
|
||||||||||||
Total revenue
|
$
|
1,381.9
|
$
|
1,281.0
|
$
|
2,623.7
|
$
|
2,446.2
|
||||||||
Comparable store sales increase (2):
|
||||||||||||||||
Restaurant
|
8.4
|
%
|
25.9
|
%
|
7.7
|
%
|
22.5
|
%
|
||||||||
Retail
|
4.1
|
%
|
32.5
|
%
|
4.2
|
%
|
30.9
|
%
|
||||||||
Restaurant and retail
|
7.4
|
%
|
27.5
|
%
|
6.9
|
%
|
24.3
|
%
|
||||||||
Average check increase
|
10.1
|
%
|
7.1
|
%
|
9.5
|
%
|
7.0
|
%
|
||||||||
Comparable restaurant guest traffic increase (decrease)(2):
|
(1.7
|
%)
|
18.8
|
%
|
(1.8
|
%)
|
15.5
|
%
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
|||||||||||||
Cost of Goods Sold in dollars:
|
||||||||||||||||
Restaurant
|
$
|
210,070
|
$
|
179,667
|
$
|
402,586
|
$
|
339,968
|
||||||||
Retail
|
116,485
|
103,974
|
205,509
|
186,444
|
||||||||||||
Total Cost of Goods Sold
|
$
|
326,555
|
$
|
283,641
|
$
|
608,095
|
$
|
526,412
|
||||||||
Cost of Goods Sold by percentage of revenue:
|
||||||||||||||||
Restaurant
|
29.3
|
%
|
27.4
|
%
|
29.2
|
%
|
26.7
|
%
|
||||||||
Retail
|
54.0
|
%
|
50.4
|
%
|
52.3
|
%
|
49.6
|
%
|
First Six Months
Increase as a Percentage
of Total Revenue
|
||||
Markdowns
|
2.4
|
%
|
||
Provision for obsolete inventory
|
0.3
|
%
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
|||||||||||||
Labor and related expenses
|
33.6
|
%
|
34.4
|
%
|
34.1
|
%
|
34.7
|
%
|
Second Quarter
Decrease as a Percentage
of Total Revenue
|
||||
Employee health care expense
|
(0.4
|
%)
|
||
Store management compensation
|
(0.3
|
%)
|
||
Store hourly labor
|
(0.1
|
%)
|
First Six Months
Decrease as a Percentage
of Total Revenue
|
||||
Employee health care expense
|
(0.4
|
%)
|
||
Store management compensation
|
(0.2
|
%)
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
|||||||||||||
Other store operating expenses
|
22.4
|
%
|
22.3
|
%
|
22.9
|
%
|
22.8
|
%
|
Second Quarter
Increase (Decrease) as a
Percentage of Total Revenue
|
First Six Months
Increase (Decrease) as a
Percentage of Total Revenue
|
|||||||
Maintenance expense
|
0.3
|
%
|
0.3
|
%
|
||||
Utilities expense
|
0.1
|
%
|
0.2
|
%
|
||||
Supplies expense
|
0.1
|
%
|
0.1
|
%
|
||||
Advertising expense
|
(0.2
|
%)
|
(0.3
|
%)
|
||||
Depreciation expense
|
(0.2
|
%)
|
(0.3
|
%)
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
|||||||||||||
General and administrative expenses
|
4.8
|
%
|
5.0
|
%
|
5.2
|
%
|
5.1
|
%
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
|||||||||||||
Interest expense, net
|
$
|
4,408
|
$
|
2,200
|
$
|
7,940
|
$
|
4,829
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2023
|
January 28,
2022
|
January 27,
2023
|
January 28,
2022
|
|||||||||||||
Effective tax rate
|
11.8
|
%
|
15.4
|
%
|
12.9
|
%
|
16.2
|
%
|
• |
management believes are most important to the accurate portrayal of both our financial condition and operating results, and
|
• |
require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
|
• |
Impairment of Long-Lived Assets
|
• |
Insurance Reserves
|
• |
Retail Inventory Valuation
|
• |
Lease Accounting
|
ITEM 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 4. |
Controls and Procedures
|
ITEM 1A. |
Risk Factors
|
ITEM 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number
of Shares
Purchased
|
Average Price
Paid Per
Share (1)
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
Maximum Number of
Shares (or Approximate
Dollar Value) that May
Yet Be Purchased
Under the Plans or
Programs
|
|||||||||
10/29/22 – 11/24/22
|
—
|
$
|
—
|
—
|
Indeterminate (2)
|
||||||||
11/25/22 – 12/23/22
|
50,834
|
$
|
98.38
|
50,834
|
Indeterminate (2)
|
||||||||
12/24/22 – 1/27/23
|
—
|
$
|
—
|
—
|
Indeterminate (2)
|
||||||||
Total for the quarter
|
50,834
|
$
|
98.38
|
50,834
|
Indeterminate (2)
|
(1) |
Average price paid per share is calculated on a settlement basis.
|
(2) |
On June 2, 2022, our Board of Directors approved the repurchase of up to $200,000 of our common stock with such authorization to expire on June 2, 2023 to the extent any portion remains unused. Repurchases are subject to prevailing
market prices, may be made in open market or private transactions and may occur or be discontinued at any time. There can be no assurance that we will repurchase any shares.
|
ITEM 6. |
Exhibits
|
Amended and Restated Charter of Cracker Barrel Old Country Store, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed under the Exchange Act on April 10, 2012
(Commission File No. 001-25225)
|
|
Second Amended and Restated Bylaws of Cracker Barrel Old Country Store, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed under the Exchange Act on June 7,
2022)
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase
|
104 |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
Date: February 28, 2023
|
By:
|
/s/Craig A. Pommells
|
Craig A. Pommells, Senior Vice President, Chief Financial Officer and Principal Accounting Officer
|
EXHIBIT 31.1 | CERTIFICATION |
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Cracker Barrel Old Country Store, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors
and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
EXHIBIT 31.2
|
CERTIFICATION |
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Cracker Barrel Old Country Store, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors
and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Issuer.
|
Date: February 28, 2023
|
By:
|
/s/Sandra B. Cochran
|
Sandra B. Cochran
|
||
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Issuer.
|
Date: February 28, 2023
|
By:
|
/s/Craig A. Pommells
|
Craig A. Pommells
|
||
Senior Vice President and Chief Financial Officer
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jan. 27, 2023 |
Jul. 29, 2022 |
---|---|---|
Shareholders' Equity: | ||
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 22,150,800 | 22,281,443 |
Common stock, shares outstanding (in shares) | 22,150,800 | 22,281,443 |
Series A Junior Participating Preferred Stock [Member] | ||
Shareholders' Equity: | ||
Preferred stock, shares authorized (in shares) | 300,000 | 300,000 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jan. 27, 2023 |
Jan. 28, 2022 |
Jan. 27, 2023 |
Jan. 28, 2022 |
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME [Abstract] | ||||
Total revenue | $ 933,868 | $ 862,260 | $ 1,773,387 | $ 1,647,190 |
Cost of goods sold (exclusive of depreciation and rent) | 326,555 | 283,641 | 608,095 | 526,412 |
Labor and other related expenses | 313,967 | 296,326 | 605,675 | 570,983 |
Other store operating expenses | 208,857 | 192,166 | 405,561 | 375,845 |
General and administrative expenses | 45,518 | 43,463 | 91,466 | 84,373 |
Operating income | 38,971 | 46,664 | 62,590 | 89,577 |
Interest expense, net | 4,408 | 2,200 | 7,940 | 4,829 |
Income before income taxes | 34,563 | 44,464 | 54,650 | 84,748 |
Provision for income taxes | 4,072 | 6,840 | 7,030 | 13,748 |
Net income | $ 30,491 | $ 37,624 | $ 47,620 | $ 71,000 |
Net income per share: | ||||
Basic (in dollars per share) | $ 1.38 | $ 1.61 | $ 2.15 | $ 3.03 |
Diluted (in dollars per share) | $ 1.37 | $ 1.6 | $ 2.14 | $ 3.02 |
Weighted average shares: | ||||
Basic (in shares) | 22,173,280 | 23,393,398 | 22,183,527 | 23,450,379 |
Diluted (in shares) | 22,251,835 | 23,462,571 | 22,272,244 | 23,528,227 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands |
Common Stock [Member] |
Additional Paid-In Capital [Member] |
Retained Earnings [Member] |
Total |
Cumulative-Effect of Change in Accounting Principle, Net of Taxes [Member]
Common Stock [Member]
|
Cumulative-Effect of Change in Accounting Principle, Net of Taxes [Member]
Additional Paid-In Capital [Member]
|
Cumulative-Effect of Change in Accounting Principle, Net of Taxes [Member]
Retained Earnings [Member]
|
Cumulative-Effect of Change in Accounting Principle, Net of Taxes [Member] |
|||
---|---|---|---|---|---|---|---|---|---|---|---|
Balances at Jul. 30, 2021 | $ 235 | $ 0 | $ 663,398 | $ 663,633 | $ 0 | $ 0 | $ (36,956) | $ (36,956) | |||
Balances (in shares) at Jul. 30, 2021 | 23,497,166 | 0 | |||||||||
Comprehensive Income: | |||||||||||
Net income | $ 0 | 0 | 33,376 | 33,376 | |||||||
Total comprehensive income | 0 | 0 | 33,376 | 33,376 | |||||||
Cash dividends declared | 0 | 0 | (30,838) | (30,838) | |||||||
Share-based compensation | 0 | 2,309 | 0 | 2,309 | |||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes | $ 0 | (2,309) | 0 | (2,309) | |||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes (in shares) | 22,691 | ||||||||||
Balances at Oct. 29, 2021 | $ 235 | 0 | 628,980 | 629,215 | |||||||
Balances (in shares) at Oct. 29, 2021 | 23,519,857 | ||||||||||
Balances at Jul. 30, 2021 | $ 235 | 0 | 663,398 | 663,633 | $ 0 | $ 0 | $ (36,956) | $ (36,956) | |||
Balances (in shares) at Jul. 30, 2021 | 23,497,166 | 0 | |||||||||
Comprehensive Income: | |||||||||||
Net income | 71,000 | ||||||||||
Balances at Jan. 28, 2022 | $ 232 | 0 | 603,872 | 604,104 | |||||||
Balances (in shares) at Jan. 28, 2022 | 23,248,532 | ||||||||||
Balances at Oct. 29, 2021 | $ 235 | 0 | 628,980 | 629,215 | |||||||
Balances (in shares) at Oct. 29, 2021 | 23,519,857 | ||||||||||
Comprehensive Income: | |||||||||||
Net income | $ 0 | 0 | 37,624 | 37,624 | |||||||
Total comprehensive income | 0 | 0 | 37,624 | 37,624 | |||||||
Cash dividends declared | 0 | 0 | (30,471) | (30,471) | |||||||
Share-based compensation | 0 | 2,203 | 0 | 2,203 | |||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes | $ 0 | (237) | 0 | (237) | |||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes (in shares) | 8,339 | ||||||||||
Purchases and retirement of common stock | $ (3) | (1,966) | (32,261) | (34,230) | |||||||
Purchases and retirement of common stock (in shares) | (279,664) | ||||||||||
Balances at Jan. 28, 2022 | $ 232 | 0 | 603,872 | 604,104 | |||||||
Balances (in shares) at Jan. 28, 2022 | 23,248,532 | ||||||||||
Balances at Jul. 29, 2022 | $ 223 | 0 | 511,256 | $ 511,479 | [1] | ||||||
Balances (in shares) at Jul. 29, 2022 | 22,281,443 | 22,281,443 | |||||||||
Comprehensive Income: | |||||||||||
Net income | $ 0 | 0 | 17,129 | $ 17,129 | |||||||
Total comprehensive income | 0 | 0 | 17,129 | 17,129 | |||||||
Cash dividends declared | 0 | 0 | (28,689) | (28,689) | |||||||
Share-based compensation | 0 | 2,422 | 0 | 2,422 | |||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes | $ 0 | (2,380) | 0 | (2,380) | |||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes (in shares) | 34,982 | ||||||||||
Purchases and retirement of common stock | $ (1) | (42) | (12,405) | (12,448) | |||||||
Purchases and retirement of common stock (in shares) | (120,958) | ||||||||||
Balances at Oct. 28, 2022 | $ 222 | 0 | 487,291 | 487,513 | |||||||
Balances (in shares) at Oct. 28, 2022 | 22,195,467 | ||||||||||
Balances at Jul. 29, 2022 | $ 223 | 0 | 511,256 | $ 511,479 | [1] | ||||||
Balances (in shares) at Jul. 29, 2022 | 22,281,443 | 22,281,443 | |||||||||
Comprehensive Income: | |||||||||||
Net income | $ 47,620 | ||||||||||
Balances at Jan. 27, 2023 | $ 221 | 0 | 486,272 | $ 486,493 | |||||||
Balances (in shares) at Jan. 27, 2023 | 22,150,800 | 22,150,800 | |||||||||
Balances at Oct. 28, 2022 | $ 222 | 0 | 487,291 | $ 487,513 | |||||||
Balances (in shares) at Oct. 28, 2022 | 22,195,467 | ||||||||||
Comprehensive Income: | |||||||||||
Net income | $ 0 | 0 | 30,491 | 30,491 | |||||||
Total comprehensive income | 0 | 0 | 30,491 | 30,491 | |||||||
Cash dividends declared | 0 | 0 | (29,179) | (29,179) | |||||||
Share-based compensation | 0 | 2,689 | 0 | 2,689 | |||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes | $ 0 | (20) | 0 | (20) | |||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes (in shares) | 6,167 | ||||||||||
Purchases and retirement of common stock | $ (1) | (2,669) | (2,331) | (5,001) | |||||||
Purchases and retirement of common stock (in shares) | (50,834) | ||||||||||
Balances at Jan. 27, 2023 | $ 221 | $ 0 | $ 486,272 | $ 486,493 | |||||||
Balances (in shares) at Jan. 27, 2023 | 22,150,800 | 22,150,800 | |||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares |
3 Months Ended | |||
---|---|---|---|---|
Jan. 27, 2023 |
Oct. 28, 2022 |
Jan. 28, 2022 |
Oct. 29, 2021 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY [Abstract] | ||||
Cash dividends declared (in dollars per share) | $ 1.3 | $ 1.3 | $ 1.3 | $ 1.3 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jan. 27, 2023 |
Jan. 28, 2022 |
|||
Cash flows from operating activities: | ||||
Net income | $ 47,620 | $ 71,000 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 50,361 | 51,362 | ||
Amortization of debt issuance costs | 862 | 911 | ||
Loss on disposition of property and equipment | 2,225 | 2,737 | ||
Share-based compensation | 5,111 | 4,512 | ||
Noncash lease expense | 29,845 | 28,908 | ||
Amortization of asset recognized from gain on sale and leaseback transactions | 6,368 | 6,368 | ||
Changes in assets and liabilities: | ||||
Inventories | 25,998 | (15,563) | ||
Other current assets | (12,567) | (1,375) | ||
Accounts payable | (34,398) | (11,237) | ||
Taxes withheld and accrued | (29,056) | 988 | ||
Deferred revenues | 20,953 | 26,872 | ||
Other current liabilities | 11,610 | (7,795) | ||
Long-term operating lease liabilities | (23,515) | (28,856) | ||
Other long-term assets and liabilities | (595) | (21,039) | ||
Net cash provided by operating activities | 100,822 | 107,793 | ||
Cash flows from investing activities: | ||||
Purchase of property and equipment | (48,878) | (30,438) | ||
Proceeds from insurance recoveries of property and equipment | 509 | 675 | ||
Proceeds from sale of property and equipment | 226 | 33 | ||
Acquisition of business, net of cash acquired | 0 | (1,500) | ||
Net cash used in investing activities | (48,143) | (31,230) | ||
Cash flows from financing activities: | ||||
Proceeds from issuance of long-term debt | 90,000 | 0 | ||
Taxes withheld from issuance of share-based compensation awards | (2,400) | (2,546) | ||
Principal payments under long-term debt | (60,049) | (50,049) | ||
Purchases and retirement of common stock | (17,449) | (34,230) | ||
Dividends on common stock | (58,482) | (54,622) | ||
Net cash used in financing activities | (48,380) | (141,447) | ||
Net increase (decrease) in cash and cash equivalents | 4,299 | (64,884) | ||
Cash and cash equivalents, beginning of period | 45,105 | 144,593 | ||
Cash and cash equivalents, end of period | 49,404 | 79,709 | ||
Cash paid during the period for: | ||||
Interest, net of amounts capitalized | 5,415 | 4,704 | ||
Income taxes | 3,855 | 4,156 | ||
Supplemental schedule of non-cash investing and financing activities: | ||||
Capital expenditures accrued in accounts payable | [1] | 3,257 | 2,352 | |
Dividends declared but not yet paid | [1] | $ 29,842 | $ 30,837 | |
|
Condensed Consolidated Financial Statements |
6 Months Ended | ||
---|---|---|---|
Jan. 27, 2023 | |||
Condensed Consolidated Financial Statements [Abstract] | |||
Condensed Consolidated Financial Statements |
Cracker Barrel Old Country Store, Inc. and its affiliates (collectively, in
these Notes to Condensed Consolidated Financial Statements, the “Company”) are principally engaged in the operation and development in the United States of the Cracker Barrel Old Country Store® (“Cracker Barrel”) concept.
The accompanying condensed consolidated financial statements have been
prepared by the Company in accordance with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) without audit. In the opinion of
management, all adjustments (consisting of normal and recurring items) necessary for a fair presentation of such condensed consolidated financial statements have been made. The results of operations for any interim period are not necessarily
indicative of results for a full year.
These condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended July 29, 2022 (the “2022 Form 10-K”). The accounting policies used in preparing these condensed
consolidated financial statements are the same as described in the 2022 Form 10-K. References to a year in these Notes to Condensed Consolidated Financial Statements are to the Company’s fiscal year unless otherwise noted.
COVID-19 Impact
While all of our dining rooms are currently operating without
COVID-19-related restrictions, it is possible that renewed outbreaks or increases in cases and/or new variants of the disease, either as part of a national trend or on a more localized basis, could result in COVID-19-related restrictions including
capacity restrictions, otherwise limit our dine-in services, or negatively affect consumer demand.
In response to the COVID-19 pandemic, the Company instituted operational
protocols to comply with applicable regulatory requirements to protect the health and safety of employees and guests, and the Company implemented and continually adapted a number of strategies to support the recovery of our business and navigate
through the uncertain environment. The Company continues to focus on growing its off-premise business and investing in its digital infrastructure to improve the guest experience in the face of these ongoing challenges.
|
Fair Value Measurements |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 27, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
The Company’s assets measured at fair value on a recurring basis at January 27, 2023 were as follows:
The Company’s assets measured at fair value on a recurring basis at July 29, 2022
were as follows:
*Consists of money market fund investments.
**Represents plan assets invested in mutual funds
established under a rabbi trust for the Company’s non-qualified savings plan and is included in the Condensed Consolidated Balance Sheets as other assets.
The Company did not have any
liabilities measured at fair value on a recurring basis at January 27, 2023 and July 29, 2022. The Company’s money market fund investments are measured at fair value using quoted market prices. The Company’s deferred compensation plan assets are
measured based on net asset value per share as a practical expedient to estimate fair value. The fair values of the Company’s accounts receivable and accounts payable approximate their carrying amounts because of their short duration. The fair value
of the Company’s variable rate debt, based on quoted market prices, which are considered Level 1 inputs, approximates its carrying amount at January 27, 2023 and July 29, 2022.
The Company’s financial instruments that are not remeasured at fair value include the 0.625% convertible Senior Notes (see Note 4). The Company estimates the fair value of the Notes through consideration of quoted market prices of similar instruments, classified as Level 2. The
estimated fair value of the Notes was $269,625 and $255,894, respectively, as of January 27, 2023 and July 29, 2022.
|
Inventories |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||
Inventories [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
Inventories were comprised of the following at:
|
Debt |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 27, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt |
On June 17, 2022, the Company entered into a five-year $700,000 revolving credit facility (the “2022 Revolving Credit
Facility”) with substantially the same terms and financial covenants as our previous amended $800,000 revolving credit facility, which it
replaced. The 2022 Revolving Credit Facility also contains an option to increase the revolving credit facility by $200,000. The
Company’s outstanding borrowings under the 2022 Revolving Credit Facility were $160,000 and $130,000 on January 27, 2023 and July 29, 2022, respectively.
At January 27, 2023, the Company had $31,896 of standby letters of credit, which reduce the Company’s borrowing availability under the 2022 Revolving Credit Facility (see Note 10 for more information on the Company’s standby
letters of credit). At January 27, 2023, the Company had $508,104 in borrowing availability under the 2022 Revolving Credit Facility.
In accordance with the 2022 Revolving Credit Facility, outstanding borrowings bear interest, at the Company’s election, either
at Term Secured Overnight Financing Rate (SOFR) or prime plus or a rate of 0.5% in excess of the Federal Funds Rate plus an applicable
margin based on certain specified financial ratios. At January 27, 2023, the weighted average interest rate on the Company’s outstanding borrowings was 5.96%.
The 2022 Revolving Credit Facility contains customary financial covenants, which include maintenance of a maximum consolidated
total senior secured leverage ratio and a minimum consolidated interest coverage ratio. At January 27, 2023, the Company was in compliance with all financial covenants under the 2022 Revolving Credit Facility.
The 2022 Revolving Credit Facility also imposes restrictions on the amount of dividends the Company is permitted to pay and the
amount of shares the Company is permitted to repurchase. Under the 2022 Revolving Credit Facility, provided there is no default existing and the total of the Company’s availability under the 2022 Revolving Credit Facility plus the Company’s cash
and cash equivalents on hand is at least $100,000 (the “Cash Availability”), the Company may declare and pay cash dividends on shares of
its common stock and repurchase shares of its common stock (1) in an unlimited amount if, at the time such dividend or repurchase is made, the Company’s consolidated total senior secured leverage ratio is 2.75 to 1.00 or less and (2) in an aggregate amount not to exceed $100,000
in any fiscal year if the Company’s consolidated total leverage ratio is greater than 2.75 to 1.00 at the time the dividend or
repurchase is made; notwithstanding (1) and (2), so long as immediately after giving effect to the payment of any such dividends, Cash Availability is at least $100,000, the Company may declare and pay cash dividends on shares of its common stock in an aggregate amount not to exceed in any fiscal year the product of the aggregate amount of dividends
declared in the fourth quarter of the immediately preceding fiscal year multiplied by four.
Convertible Senior Notes
On June 18, 2021, the Company completed a $300,000 principal aggregate amount private offering of 0.625% convertible
Senior Notes due in 2026 (the “Notes”). The Notes are governed by the terms of an indenture between the Company and U.S. Bank National Association as the Trustee. The Notes will mature on June 15, 2026, unless earlier converted, repurchased or redeemed. The Notes bear cash interest at an annual rate of 0.625%, payable semi-annually in arrears on June 15 and December 15 of each
year.
The Notes are unsecured obligations and do not contain any financial or operating covenants or restrictions on the payments of
dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company or any of its subsidiaries. In an event of default, the principal amount of, and all accrued and unpaid interest on, all of the notes then
outstanding will immediately become due and payable. However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an event of default relating to certain failures by the Company to comply with certain
reporting covenants in the Indenture will consist exclusively of the right of the noteholders to receive special interest on the Notes for up to 180
calendar days during which such event of default has occurred and is continuing, at a specified rate for the first 90 days of 0.25% per
annum, and thereafter at a rate of 0.50% per annum, on the principal amount of the Notes.
The initial conversion rate applicable to the Notes was 5.3153 shares of the Company’s common stock per $1,000 principal amount of
Notes, which represented an initial conversion price of approximately $188.14 per share of the Company’s common stock, a premium of 25.0% over the last reported sale price of $150.51
per share on June 15, 2021, the date on which the Notes were priced. The conversion rate is subject to customary adjustments upon the occurrence of certain events, including the payment of dividends to holders of the Company’s common stock. As of
January 27, 2023, the conversion rate, as adjusted, was 5.7469 shares of the Company’s common stock per $1,000 principal amount of Notes. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” occur, then the conversion
rate will, in certain circumstances, be increased for a specified period of time.
Net proceeds from the Notes offering were $291,125, after deducting the initial purchasers’ discounts and commissions and the Company’s offering fees and expenses.
The Notes are accounted for entirely as a liability, and the issuance costs of the Notes are accounted for wholly as debt
issuance costs.
The following table includes the outstanding principal amount and carrying value of the Notes as of the periods indicated:
The effective rate of the Notes over their expected life is 1.23%. The following is a summary of interest expense for the Notes for specified periods:
During any calendar quarter commencing after September 30, 2021, in which the closing price of the Company’s common stock
exceeds 130% of the applicable conversion price of the Notes on at least 20 of the last 30 consecutive trading days of the quarter, holders may in the
quarter immediately following, convert all or a portion of their Notes. The holders of the Notes were not eligible to convert their Notes during 2023, 2022 or 2021. When a conversion notice is received, the Company has the option to pay or deliver
the conversion amount entirely in cash or a combination of cash and shares of the Company’s common stock. Accordingly, as of January 27, 2023, the Company could not be required to settle the Notes and, therefore, the Notes are classified as
long-term debt.
Convertible Note Hedge and Warrant Transactions
In connection with the offering of the Notes, the Company entered into convertible note hedge transactions (the “Convertible
Note Hedge Transactions”) with certain of the initial purchasers of the Notes and/or their respective affiliates and other financial institutions (in this capacity, the “Hedge Counterparties”). Concurrently with the Company’s entry into the
Convertible Note Hedge Transactions, the Company also entered into separate, warrant transactions with the Hedge Counterparties collectively relating to the same number of shares of the Company’s common stock, which initially was approximately 1,600,000 shares, subject to customary anti-dilution adjustments, and for which the Company received proceeds that partially offset the cost of entering
into the Convertible Note Hedge Transactions (the “Warrant Transactions”).
The Convertible Note Hedge Transactions cover, subject to customary anti-dilution adjustments, the number of shares of the
Company’s common stock that initially underlay the Notes, and are expected generally to reduce the potential equity dilution, and/or offset any cash payments in excess of the principal amount due, as the case may be, upon conversion of the Notes.
The Warrant Transactions could have a dilutive effect on the Company’s common stock to the extent that the price of its common stock exceeds the strike price of the Warrant Transactions. The strike price was initially $263.39 per share and is subject to certain adjustments under the terms of the Warrant Transactions. As of January 27, 2023, the strike price, as
adjusted, of the Warrant Transactions was $243.61 per share as a result of dividends declared since the Notes were issued.
The portion of the net proceeds to the Company from the offering of the Notes that was used to pay the premium on the
Convertible Note Hedge Transactions, net of the proceeds to the Company from the Warrant Transactions, was approximately $30,310. The net
costs incurred in connection with the Convertible Note Hedge Transactions and Warrant Transactions were recorded as a reduction to additional paid-in capital on the Company’s Condensed Consolidated Balance Sheet during 2021.
Because these transactions meet certain accounting criteria, the Convertible Note Hedge Transactions and Warrant Transactions
were recorded in shareholders’ equity, not accounted for as derivatives and are not remeasured each reporting period.
|
Seasonality |
6 Months Ended | ||
---|---|---|---|
Jan. 27, 2023 | |||
Seasonality [Abstract] | |||
Seasonality |
Historically, the revenue and net income of the Company have been lower in the first and third quarters and higher in the second and fourth quarters.
Management attributes these variations to the holiday shopping season and the summer vacation and travel season. The Company’s retail sales, which are made substantially to the Company’s restaurant customers, historically have been highest in the
Company’s second quarter, which includes the holiday shopping season. Historically, interstate tourist traffic and the propensity to dine out have been higher during the summer months, thereby contributing to higher profits in the Company’s fourth
quarter. The Company generally opens additional new locations throughout the year. Therefore, the results of operations for any interim period cannot be considered indicative of the operating results for an entire year. Currently, the Company is not able to predict the impact that future variants of COVID-19 may have on these historical consumer demand patterns or, as a result, on the seasonality of its business generally.
|
Segment Information |
6 Months Ended | ||
---|---|---|---|
Jan. 27, 2023 | |||
Segment Information [Abstract] | |||
Segment Information |
Cracker Barrel stores represent a single, integrated operation with two related and substantially integrated product lines. The operating expenses of the restaurant and retail product lines of a Cracker Barrel store are shared and are indistinguishable in many respects.
Accordingly, the Company currently manages its business on the basis of one reportable operating segment. All of the Company’s operations
are located within the United States.
|
Revenue Recognition |
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Jan. 27, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition |
Revenue consists primarily of sales from restaurant and retail operations. The Company recognizes revenue when it satisfies a performance obligation
by transferring control over a product or service to a restaurant guest, retail customer or other customer. The Company’s policy is to present sales in the Condensed Consolidated Statements of Income on a net presentation basis after deducting sales
tax.
Disaggregation of revenue
Total revenue was comprised of the following for the specified periods:
Restaurant Revenue
The Company recognizes revenues from restaurant sales when payment is tendered at the point of sale, as the Company’s performance obligation to
provide food and beverages is satisfied.
Retail Revenue
The Company recognizes revenues from retail sales when payment is tendered at the point of sale, as the Company’s performance obligation to provide
merchandise is satisfied. Ecommerce sales, including shipping revenue, are recorded upon delivery to the customer. Additionally, estimated sales returns are calculated based on return history and sales levels.
Gift Card Breakage
Included in restaurant and retail revenue is gift card breakage. Customer purchases of
gift cards, to be utilized at the Company’s stores, are not recognized as sales until the card is redeemed and the customer purchases food and/or merchandise. Gift cards do not carry an expiration date; therefore, customers can redeem their gift
cards indefinitely. A certain number of gift cards will not be fully redeemed. Management estimates unredeemed balances and recognizes gift card breakage revenue for these amounts in the Company’s Condensed Consolidated Statements of Income over
the expected redemption period. Gift card breakage is recognized when the likelihood of a gift card being redeemed by the customer is remote, and the Company determines that there is not a legal obligation to remit the unredeemed gift card
balance to the relevant jurisdiction.
The determination of the gift card breakage rate is based upon the Company’s specific historical redemption patterns. The Company recognizes gift card
breakage by applying its estimate of the rate of gift card breakage over the period of estimated redemption. For the quarter and six months ended January 27, 2023, gift card breakage was $2,183 and $3,488, respectively. For the quarter and six months ended January 28,
2022, gift card breakage was $2,164 and $3,269,
respectively.
Deferred revenue related to the Company’s gift cards was $114,478 and $93,569, respectively, at January 27, 2023 and July 29,
2022. Revenue recognized in the Condensed Consolidated Statements of Income for the six months ended January 27, 2023 and January 28, 2022, respectively, for the redemption of gift cards which were included in the deferred revenue balance at the beginning of the fiscal year was $27,507 and $28,809.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases |
The Company has ground leases for its leased stores and office space leases that are recorded as operating leases under various non-cancellable
operating leases. The Company also leases advertising billboards, vehicle fleets, and certain equipment under various non-cancellable operating leases. Additionally, the Company completed sale-leaseback transactions in 2009, 2020 and 2021 (see
section below entitled “Sale and Leaseback Transactions”). To determine whether a contract is or contains a lease, the Company determines at contract inception whether it contains the right to control the use of an identified asset for a period
of time in exchange for consideration. If the contract has the right to obtain substantially all of the economic benefit from use of the identified asset and the right to direct the use of the identified asset, the Company recognizes a
right-of-use asset and lease liability.
The Company’s leases all have varying terms and expire at various dates through 2055. Restaurant leases typically have base terms of ten years with four to five optional renewal periods of five years
each. The Company uses a lease life that generally begins on the commencement date, including the rent holiday periods, and generally extends through certain renewal periods that can be exercised at the Company’s option. During rent holiday
periods, which include the pre-opening period during construction, the Company has possession of and access to the property, but is not obligated to, and normally does not, make rent payments. The Company has included lease
renewal options in the lease term for calculations of the right-of-use asset and liability for which at the commencement of the lease it is reasonably certain that the Company will exercise those renewal options. Additionally, some of the leases
have contingent rent provisions and others require adjustments for inflation or index. Contingent rent is determined as a percentage of gross sales in excess of specified levels. The
Company records a contingent rent liability and corresponding rent expense when it is probable sales have been achieved in amounts in excess of the specified levels. The Company’s lease agreements do not contain any material residual
value guarantees or material restrictive covenants.
The Company has entered into agreements for real estate leases that are not recorded as right-of-use assets or lease liabilities as we have not
yet taken possession. These leases are expected to commence in 2023 and 2024 with undiscounted future payments of $3,232 and $35,255, respectively.
The Company has elected not to separate lease and non-lease components. Additionally, the Company has elected to apply the short term lease
exemption to all asset classes and the short term lease expense for the period reasonably reflects the short term lease commitments. As the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on
the information available at the time of commencement or modification date in determining the present value of lease payments. For operating leases that commenced prior to the date of adoption of the new lease accounting guidance, the Company
used the incremental borrowing rate as of the adoption date. Assumptions used in determining the Company’s incremental borrowing rate include the Company’s implied credit rating and an estimate of secured borrowing rates based on comparable
market data.
The following table summarizes the components of lease cost for operating leases for the quarters and six months ended January 27, 2023 and January 28, 2022:
The following table summarizes supplemental cash flow information and non-cash activity related to the Company’s operating leases for the quarters
and six months ended January 27, 2023 as compared to the same periods in the prior year:
The following table summarizes the weighted-average remaining lease term and the weighted-average discount rate for operating leases as of January 27, 2023 and January 28, 2022:
The following table summarizes the maturities of undiscounted cash flows reconciled to the total operating lease liability as of January 27, 2023:
Sale and Leaseback Transactions
In 2009, the Company completed sale-leaseback transactions involving 15 of its owned stores and its retail distribution center. Under the transactions, the land, buildings and improvements at the locations were sold and leased back for terms of 20 and 15 years, respectively. Equipment
was not included. The leases include specified renewal options for up to 20 additional years.
On July 29, 2020, the Company entered into an agreement with the original lessor and a third party financier to obtain ownership of 64 of the 65 Cracker Barrel properties
previously covered in the original sale and leaseback arrangement and simultaneously entered into a sale and leaseback transaction with the financier for an aggregate purchase price, net of closing costs, of $198,083. The Company purchased the remaining property for approximately $3,200. In connection with this sale and leaseback transaction, the Company entered into lease agreements for each of the properties for initial terms of 20 years and renewal options up to 50
years. The aggregate initial annual rent payment for the properties is approximately $14,379 and includes 1% annual rent increases over the initial lease terms. All the properties qualified for sale and leaseback and operating lease accounting classification
and the Company recorded a gain on the sale and leaseback transaction of $69,954 in the fourth quarter of 2020. The Company recorded
operating lease right-of-use assets, including a non-cash asset recognized as a part of accounting for the transaction of $79,049, and
corresponding operating lease liabilities of $261,698 and $182,649, respectively.
On August 4, 2020, the Company completed a subsequent sale and leaseback transaction involving 62 of its owned Cracker Barrel stores for an aggregate purchase price, net of closing costs, of $146,357. Under the transaction, the land, buildings and building improvements at the locations were sold and leased back for initial terms of 20 years and renewal options up to 50 years. The aggregate
initial annual rent payment for the properties is approximately $10,393 and includes 1% annual rent increases over the initial lease terms. All of the properties qualified for sale and leaseback and operating lease accounting classification, and the Company
recorded a gain of $217,722 which is recorded in the gain on sale and leaseback transaction line in the Condensed Consolidated
Statement of Income in the first quarter of 2021. The Company also recorded operating lease right-of-use assets, including a non-cash asset recognized as part of accounting for the transaction of $175,960, and corresponding operating lease liabilities of $309,624
and $133,663, respectively.
|
Net Income Per Share and Weighted Average Shares |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share and Weighted Average Shares [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share and Weighted Average Shares |
Basic consolidated net income per share is computed by dividing consolidated net income
available to common shareholders by the weighted average number of shares of common stock outstanding for the reporting period. Diluted consolidated net income per share reflects the potential dilution that could occur if securities, options or
other contracts to issue shares of common stock were exercised or converted into shares of common stock and is based upon the weighted average number of shares of common stock and common equivalent shares outstanding during the reporting period.
Common equivalent shares related to nonvested stock awards and units issued by the Company are calculated using the treasury stock method. The outstanding nonvested stock awards and units issued by the Company represent the only dilutive effects on
diluted consolidated net income per share. The Company’s convertible senior notes and related warrants are calculated using the net share settlement option under the if converted method. Because the principal amount of the convertible senior notes will be settled in cash with any
excess conversion value settled in cash or shares of common stock, the convertible senior notes have been excluded from the computation of diluted earnings per share because the average market price of the Company’s common stock during the
reporting period did not exceed the conversion price of $176.18 as of January 27, 2023. Warrants were excluded from the computation of
diluted earnings per share since the warrants’ strike price of $243.61 was greater than the average market price of the Company’s common
stock during the period. See Note 4 for additional information regarding the Company’s convertible senior notes.
The following table reconciles the components of diluted earnings per share computations:
|
Commitments and Contingencies |
6 Months Ended | ||
---|---|---|---|
Jan. 27, 2023 | |||
Commitments and Contingencies [Abstract] | |||
Commitments and Contingencies |
The Company and its subsidiaries are party to various legal and regulatory proceedings and claims incidental to their business in the ordinary
course. In the opinion of management, based upon information currently available, the ultimate liability with respect to these contingencies will not materially affect the Company’s financial statements.
Related to its insurance coverage, the Company is contingently liable pursuant to standby letters of credit as credit guarantees to certain insurers.
As of January 27, 2023, the Company had $31,896 of standby letters of credit related to securing reserved claims under workers’
compensation insurance and the July 29, 2020 and August 4, 2020 sale and leaseback transactions. All standby letters of credit are renewable annually and reduce the Company’s
borrowing availability under its 2022 Revolving Credit Facility (see Note 4).
The Company enters into certain indemnification agreements in favor of third parties in the ordinary course of business. The Company believes that
the probability of incurring an actual liability under such indemnification agreements is sufficiently remote that no such liability has been recorded in the Condensed Consolidated Balance Sheet as of January 27, 2023.
|
Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis |
The Company’s assets measured at fair value on a recurring basis at January 27, 2023 were as follows:
The Company’s assets measured at fair value on a recurring basis at July 29, 2022
were as follows:
*Consists of money market fund investments.
**Represents plan assets invested in mutual funds
established under a rabbi trust for the Company’s non-qualified savings plan and is included in the Condensed Consolidated Balance Sheets as other assets.
|
Inventories (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
Inventories [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
Inventories were comprised of the following at:
|
Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Principal Amount and Carrying Value of the Notes |
The following table includes the outstanding principal amount and carrying value of the Notes as of the periods indicated:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Interest Expense |
The effective rate of the Notes over their expected life is 1.23%. The following is a summary of interest expense for the Notes for specified periods:
|
Revenue Recognition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue |
Total revenue was comprised of the following for the specified periods:
|
Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Cost for Operating Leases |
The following table summarizes the components of lease cost for operating leases for the quarters and six months ended January 27, 2023 and January 28, 2022:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information and Non-cash Activity Related to Operating Leases |
The following table summarizes supplemental cash flow information and non-cash activity related to the Company’s operating leases for the quarters
and six months ended January 27, 2023 as compared to the same periods in the prior year:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-Average Remaining Lease Term and Weighted-Average Discount Rate for Operating Leases |
The following table summarizes the weighted-average remaining lease term and the weighted-average discount rate for operating leases as of January 27, 2023 and January 28, 2022:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturities of Undiscounted Cash Flows Reconciled to Total Operating Lease Liability |
The following table summarizes the maturities of undiscounted cash flows reconciled to the total operating lease liability as of January 27, 2023:
|
Net Income Per Share and Weighted Average Shares (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share and Weighted Average Shares [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Components of Diluted Earnings per Share Computations |
The following table reconciles the components of diluted earnings per share computations:
|
Fair Value Measurements (Details) - USD ($) $ in Thousands |
Jan. 27, 2023 |
Jul. 29, 2022 |
Jun. 18, 2021 |
||||
---|---|---|---|---|---|---|---|
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Liabilities at fair value | $ 0 | $ 0 | |||||
0.625% Convertible Senior Notes Due 2026 [Member] | |||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Interest rate | 0.625% | 0.625% | |||||
Level 2 [Member] | 0.625% Convertible Senior Notes Due 2026 [Member] | Estimated Fair Value [Member] | |||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Fair value of notes | $ 269,625 | 255,894 | |||||
Recurring [Member] | |||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Cash equivalents | [1] | 26,501 | 18,001 | ||||
Deferred compensation plan assets | [2] | 25,201 | 27,843 | ||||
Total assets at fair value | 51,702 | 45,844 | |||||
Recurring [Member] | Level 1 [Member] | |||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Cash equivalents | [1] | 26,501 | 18,001 | ||||
Recurring [Member] | Level 2 [Member] | |||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Cash equivalents | [1] | 0 | 0 | ||||
Recurring [Member] | Level 3 [Member] | |||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Cash equivalents | [1] | $ 0 | $ 0 | ||||
|
Inventories (Details) - USD ($) $ in Thousands |
Jan. 27, 2023 |
Jul. 29, 2022 |
|||
---|---|---|---|---|---|
Inventories [Abstract] | |||||
Retail | $ 143,052 | $ 170,846 | |||
Restaurant | 26,369 | 25,284 | |||
Supplies | 17,830 | 17,119 | |||
Total | $ 187,251 | $ 213,249 | [1] | ||
|
Debt, Revolving Credit Facility (Details) - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jan. 27, 2023 |
Jul. 29, 2022 |
Jun. 17, 2022 |
Jun. 16, 2022 |
|
2022 Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Abstract] | ||||
Line of credit facility, term | 5 years | |||
Maximum borrowing capacity | $ 700,000 | |||
Option to increase revolving credit facility | $ 200,000 | |||
Outstanding borrowings | $ 160,000 | $ 130,000 | ||
Amount of standby letters of credit | 31,896 | |||
Remaining borrowing capacity | $ 508,104 | |||
Weighted average interest rates | 5.96% | |||
Liquidity requirements | $ 100,000 | |||
Leverage ratio, maximum | 2.75 | |||
Dividends threshold | $ 100,000 | |||
Multiplier used in calculating aggregate amount of cash dividends on shares of common stock in any fiscal year | 4 | |||
2022 Revolving Credit Facility [Member] | Federal Funds Rate [Member] | ||||
Line of Credit Facility [Abstract] | ||||
Debt instrument, basis spread on variable rate | 0.50% | |||
2019 Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Abstract] | ||||
Maximum borrowing capacity | $ 800,000 |
Debt, Convertible Senior Notes (Details) - 0.625% Convertible Senior Notes Due 2026 [Member] - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |||||
---|---|---|---|---|---|---|
Jun. 18, 2021 |
Jan. 27, 2023 |
Jul. 29, 2022 |
Jun. 15, 2021 |
|||
Convertible Senior Notes [Abstract] | ||||||
Interest rate | 0.625% | 0.625% | ||||
Maturity date | Jun. 15, 2026 | |||||
Periodic interest payment frequency | semi-annually | |||||
Period of special interest to be received in the event of default | 180 days | |||||
Special interest rate to be received for first 90 days | 0.25% | |||||
Special Interest rate to be received thereafter | 0.50% | |||||
Conversion rate of common stock (in shares) | 5.3153 | 5.7469 | ||||
Debt instrument, converted amount | $ 1,000 | $ 1,000 | ||||
Conversion price per share (in dollars per share) | $ 188.14 | |||||
Common stock premium percentage | 25.00% | |||||
Sale price per share (in dollars per share) | $ 150.51 | |||||
Net proceeds from notes offering | 291,125 | |||||
Liability component [Abstract] | ||||||
Principal | 300,000 | $ 300,000 | ||||
Less: Debt issuance costs | [1] | 6,039 | 6,901 | |||
Net carrying amount | $ 293,961 | $ 293,099 | ||||
|
Debt, Summary of Interest Expense (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jan. 27, 2023
USD ($)
|
Jan. 28, 2022
USD ($)
|
Jan. 27, 2023
USD ($)
d
|
Jan. 28, 2022
USD ($)
|
|
Interest Expense [Abstract] | ||||
Amortization of issuance costs | $ 862 | $ 911 | ||
0.625% Convertible Senior Notes Due 2026 [Member] | ||||
Interest Expense [Abstract] | ||||
Interest rate effective percentage | 1.23% | 1.23% | 1.23% | 1.23% |
Coupon interest | $ 474 | $ 474 | $ 948 | $ 948 |
Amortization of issuance costs | 431 | 432 | 862 | 911 |
Total interest expense | $ 905 | $ 906 | $ 1,810 | $ 1,859 |
Threshold percentage of stock price trigger | 130.00% | |||
Threshold trading days | d | 20 | |||
Threshold consecutive trading days | d | 30 |
Debt, Convertible Note Hedge and Warrant Transactions (Details) - Convertible Note Hedge Transactions [Member] $ / shares in Units, $ in Thousands |
6 Months Ended |
---|---|
Jan. 27, 2023
USD ($)
$ / shares
shares
| |
Convertible Note Hedge and Warrant Transactions [Abstract] | |
Number of shares of common stock included in Warrant Transactions (in shares) | shares | 1,600,000 |
Strike price (in dollars per share) | $ 263.39 |
Adjusted strike price (in dollars per share) | $ 243.61 |
Portion of net proceeds from offering of Notes used to pay the premium on Convertible Note Hedge Transactions, net of proceeds from Warrant Transactions | $ | $ 30,310 |
Segment Information (Details) |
6 Months Ended |
---|---|
Jan. 27, 2023
Line
Segment
| |
Segment Information [Abstract] | |
Number of product lines | Line | 2 |
Number of reportable operating segments | Segment | 1 |
Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jan. 27, 2023 |
Jan. 28, 2022 |
Jan. 27, 2023 |
Jan. 28, 2022 |
Jul. 29, 2022 |
|
Disaggregation of Revenue [Abstract] | |||||
Revenue | $ 933,868 | $ 862,260 | $ 1,773,387 | $ 1,647,190 | |
Gift card breakage | 2,183 | 2,164 | 3,488 | 3,269 | |
Deferred revenue related to gift cards | 114,478 | 114,478 | $ 93,569 | ||
Revenue recognized for redemption of gift cards | 27,507 | 28,809 | |||
Restaurant [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Revenue | 718,002 | 656,080 | 1,380,236 | 1,271,494 | |
Retail [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Revenue | $ 215,866 | $ 206,180 | $ 393,151 | $ 375,696 |
Leases, Summary (Details) $ in Thousands |
6 Months Ended |
---|---|
Jan. 27, 2023
USD ($)
Period
| |
Leases [Abstract] | |
Initial lease term | 20 years |
Maximum [Member] | |
Leases [Abstract] | |
Lease renewal option | 50 years |
Restaurant [Member] | |
Leases [Abstract] | |
Initial lease term | 10 years |
Lease renewal option | 5 years |
Undiscounted future payments for leases not yet commenced in 2023 | $ | $ 3,232 |
Undiscounted future payments for leases not yet commenced in 2024 | $ | $ 35,255 |
Restaurant [Member] | Minimum [Member] | |
Leases [Abstract] | |
Number of optional renewal periods | Period | 4 |
Restaurant [Member] | Maximum [Member] | |
Leases [Abstract] | |
Number of optional renewal periods | Period | 5 |
Leases, Components of Lease Cost for Operating Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jan. 27, 2023 |
Jan. 28, 2022 |
Jan. 27, 2023 |
Jan. 28, 2022 |
|
Components of Lease Cost for Operating Leases [Abstract] | ||||
Operating lease cost | $ 27,363 | $ 27,150 | $ 54,889 | $ 54,142 |
Short term lease cost | 2,270 | 2,058 | 2,497 | 2,225 |
Variable lease cost | 844 | 642 | 1,954 | 1,230 |
Total lease cost | $ 30,477 | $ 29,850 | $ 59,340 | $ 57,597 |
Leases, Supplemental Cash Flow Information and Non-cash Activity Related to Operating Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jan. 27, 2023 |
Jan. 28, 2022 |
Jan. 27, 2023 |
Jan. 28, 2022 |
|
Operating cash flow information [Abstract] | ||||
Cash paid for amounts included in the measurement of lease liabilities | $ 23,761 | $ 23,068 | $ 47,507 | $ 45,861 |
Noncash information [Abstract] | ||||
Right-of-use assets obtained in exchange for new operating lease liabilities | 5,474 | 4,969 | 9,465 | 11,657 |
Lease modifications or reassessments increasing or decreasing right-of-use assets | 4,214 | 3,039 | 3,698 | 6,416 |
Lease modifications removing right-of-use assets | $ (214) | $ (174) | $ (291) | $ (336) |
Leases, Weighted-Average Remaining Lease Term and Weighted-Average Discount Rate for Operating Leases (Details) |
Jan. 27, 2023 |
Jan. 28, 2022 |
---|---|---|
Weighted-Average Remaining Lease Term and Weighted-Average Discount Rate for Operating Leases [Abstract] | ||
Weighted-average remaining lease term | 17 years 2 months 19 days | 17 years 9 months 18 days |
Weighted-average discount rate | 5.04% | 4.87% |
Leases, Maturities of Undiscounted Cash Flows Reconciled to Total Lease Liability (Details) - USD ($) $ in Thousands |
Jan. 27, 2023 |
Aug. 04, 2020 |
---|---|---|
Maturities of Undiscounted Cash Flows Reconciled to Total Lease Liability [Abstract] | ||
Remainder of 2023 | $ 46,722 | |
2024 | 74,439 | |
2025 | 68,302 | |
2026 | 65,989 | |
2027 | 65,070 | |
Thereafter | 848,992 | |
Total future minimum lease payments | 1,169,514 | |
Less imputed remaining interest | (408,207) | |
Total present value of operating lease liabilities | $ 761,307 | $ 133,663 |
Leases, Sale and Leaseback Transactions (Details) $ in Thousands |
6 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Aug. 04, 2020
USD ($)
Store
|
Jul. 29, 2020
USD ($)
Store
|
Jan. 27, 2023
USD ($)
|
Jul. 31, 2009
Store
|
Jul. 29, 2022
USD ($)
|
[1] | |||
Sale Leaseback Transactions [Abstract] | ||||||||
Initial lease term | 20 years | |||||||
Aggregate purchase price, net of closing costs | $ 146,357 | |||||||
Aggregate initial annual rent payment for lease properties | $ 10,393 | |||||||
Percentage of increase in annual rental payments in initial terms | 1.00% | |||||||
Gain on sale and leaseback transaction | $ 217,722 | |||||||
Right-of-use assets, non-cash | 175,960 | |||||||
Operating lease right-of-use assets | 309,624 | $ 910,182 | $ 933,524 | |||||
Operating lease liabilities | $ 133,663 | $ 761,307 | ||||||
Maximum [Member] | ||||||||
Sale Leaseback Transactions [Abstract] | ||||||||
Lease renewal option | 50 years | |||||||
Owned Stores [Member] | ||||||||
Sale Leaseback Transactions [Abstract] | ||||||||
Number of owned stores involved in sale-lease back transactions | Store | 62 | |||||||
Aggregate purchase price, net of closing costs | $ 198,083 | |||||||
Sale-leaseback Transactions in 2009 [Member] | Owned Stores [Member] | ||||||||
Sale Leaseback Transactions [Abstract] | ||||||||
Number of owned stores involved in sale-lease back transactions | Store | 15 | |||||||
Initial lease term | 20 years | |||||||
Lease renewal option | 20 years | |||||||
Sale-leaseback Transactions in 2009 [Member] | Retail Distribution Center [Member] | ||||||||
Sale Leaseback Transactions [Abstract] | ||||||||
Initial lease term | 15 years | |||||||
Lease renewal option | 20 years | |||||||
Sale-leaseback Transactions in 2000 [Member] | ||||||||
Sale Leaseback Transactions [Abstract] | ||||||||
Initial lease term | 20 years | |||||||
Remaining property purchased | $ 3,200 | |||||||
Aggregate initial annual rent payment for lease properties | $ 14,379 | |||||||
Percentage of increase in annual rental payments in initial terms | 1.00% | |||||||
Gain on sale and leaseback transaction | $ 69,954 | |||||||
Right-of-use assets, non-cash | 79,049 | |||||||
Operating lease right-of-use assets | 261,698 | |||||||
Operating lease liabilities | $ 182,649 | |||||||
Sale-leaseback Transactions in 2000 [Member] | Maximum [Member] | ||||||||
Sale Leaseback Transactions [Abstract] | ||||||||
Lease renewal option | 50 years | |||||||
Sale-leaseback Transactions in 2000 [Member] | Owned Stores [Member] | ||||||||
Sale Leaseback Transactions [Abstract] | ||||||||
Number of owned stores involved in sale-lease back transactions | Store | 65 | |||||||
Number of stores completed in sale leaseback transaction | Store | 64 | |||||||
|
Net Income Per Share and Weighted Average Shares (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jan. 27, 2023 |
Oct. 28, 2022 |
Jan. 28, 2022 |
Oct. 29, 2021 |
Jan. 27, 2023 |
Jan. 28, 2022 |
|
Reconciliation of Components of Diluted Earnings per Share Computations [Abstract] | ||||||
Net income per share numerator | $ 30,491 | $ 17,129 | $ 37,624 | $ 33,376 | $ 47,620 | $ 71,000 |
Net income per share denominator [Abstract] | ||||||
Weighted average shares (in shares) | 22,173,280 | 23,393,398 | 22,183,527 | 23,450,379 | ||
Add potential dilution [Abstract] | ||||||
Nonvested stock awards and units (in shares) | 78,555 | 69,173 | 88,717 | 77,848 | ||
Diluted weighted average shares (in shares) | 22,251,835 | 23,462,571 | 22,272,244 | 23,528,227 | ||
Convertible Senior Notes [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract] | ||||||
Conversion price (in dollars per share) | $ 176.18 | $ 176.18 | ||||
Warrants [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract] | ||||||
Adjusted strike price (in dollars per share) | $ 243.61 | $ 243.61 |
Commitments and Contingencies (Details) $ in Thousands |
Jan. 27, 2023
USD ($)
|
---|---|
Standby Letters of Credit [Member] | Revolving Credit Facility [Member] | |
Loss Contingencies [Abstract] | |
Letters of credit outstanding | $ 31,896 |
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