Cracker Barrel Old Country Store, Inc.

Q1 2022 Earnings Conference Call


spk_0: the day and welcome to the cracker barrel fiscal twenty twenty two first quarter earnings call ah participants will be unless and only mode should you need assistance please ignore conference bacillus by pressing the starkey followed by zero after today's presentation therapy and opportunity to ask questions please note this event is being recorded and going to turn the conference over to jessica hazel how does investorrelations please go ahead
spk_1: thank you good morning and welcome to cracker barrel of first quarter fiscal twenty twenty two conference call and webcast this morning we issued a press release announcing our first quarter results in this press release and on this call we will refer to non gaap financial measures for the first quarter ended oct twenty nine twenty twenty one at the first quarter nine gap financial measures are adjusted to exclude that noncash amortization of the asset recognized from the games on our sale and leaseback transactions and the related tax impacts the company believes that excluding these items from it's financial results provides investors with an enhanced understanding of the company's financial performance this information is not intended to be considered in isolation or as a substitute for net income or earnings per share information prepared in accordance with gap the last pages of the press release include reconciliation from the and gap information to the gap financial on the call with me this morning or cracker barrel of president and ceo sandy cochran senior vice president and interim c f o dog poo be on and senior vice president and c m o jennifer tate baby will begin with the review of the business and dugard or the financial outlook we will been open up the call for questions for same the dog and jen on this call statements may be made by management of their belief and expectations regarding the company's future operating results are expected future events beaver known as forward looking statements which above risks and uncertainties that in many cases are be on management control and may cause actual results to differ materially from expectation we caution our listeners and readers and considering forward looking statements and information many of the factors that could affect revolt are summarized in the cautionary description of risks and uncertainties founded the end of the press release and or described in detail and all reports that we fall with or furnished to the fcc finally the information shared on this call is valid as up to date date and the company undertakes no obligation to update it except as may be required under applicable law i'll nail from the call over to crack roads president and ceo sandy cochran
spk_2: sandy
spk_3: thank you jeff zucker good morning everyone
spk_1: this morning we announced comparable store restaurant sales growth of one point four percent compared to the first quarter of fiscal twenty nineteen
spk_3: i'm pleased with the work of our team to accomplish the sales recovery in spite of ahead wins we faced from the delta variant and difficult staffing environment as we began our fiscal year
spk_1: we believe the improvements we made to staffing levels during the first quarter played a significant role in driving or fills recovery or recruitment efforts including a new virtual orientation program midstream lines are on boarding process and reduces training hours helped us to hire an average of more than two thousand employees per week during the quarter
spk_3: while we still have some challenges with coded related call outs and pockets of understaffing we feel confident that we have the appropriate staffing and place to handle the elevated holiday bowl yams we anticipate for que to
spk_1: please to share that with saw almost no year over year decline and of premise sales even as first quarter dine in volumes further recover and we continue to explore new channels for growth and expansion for or premise business
spk_3: in the last week of the quarter we expanded our virtual brand chicken and biscuits by cracker barrel to approximately five hundred locations total launched a second virtual bran the pancake kitchen by cracker barrel and we opened our first ever goes kitchen location all of which will speak to shortly
spk_1: first quarter retail sales maintain their strong growth over pre covert levels with comparable store retail sales of seventeen point six percent compared to the first quarter of twenty nine train we continue to see strength from everyday categories particularly toys food and home decor
spk_3: ishii a holiday themes have resonated strongly with guess this year and or christmas same for delivering solid double digit growth over fiscal twenty nineteen today despite some headwinds from shipping delays but wait till teams had done an excellent job of managing the ongoing supply chain challenges and we bought in the majority of our containers that contracted rates during the quarter
spk_1: by pushing forward or doing timelines for seasonal merchandise and leaning and tour everyday assortments we are successfully navigating the impact of these shipping delays while providing guess with a unique an appealing retail experience maple street maintained it's run of strong sales performance during the quarter average weekly sales for the brand were up by more than fifty percent compared to pre covert levels which includes the benefit of being open on sundays we hope to open fifteen new units this year the first of which opens next week a real estate team has done an excellent job of building a strong pipeline to support new unit openings
spk_3: through the remainder of this fiscal year and beyond and given the strong union economic said have exceeded our expectations i'm optimistic about the long term growth potential for the brand
spk_1: local take you through additional financial details for the first quarter and provide current thinking on our outlook before he does i'd like to share with you a little more detail on our second quarter expectations and progress on a few key strategic initiatives
spk_3: many of you know the cracker barrel brand has a deep connection to the holiday season and or stores typically run higher volumes during the second quarter the fear especially i believe our guests are embracing crack the unique holiday offerings as they look forward to a more traditional season complete with family
spk_1: gatherings and holiday celebrations with friends
spk_3: while we expect the queue to dine in traffic will remain below prieto vid levels were optimistic that the recent improvements in a restaurant and retail sales trains will continue through the holidays
spk_1: between strong demand for my off premise thanksgiving offerings preorders for traditional heat and surfaced that served eight to ten guess have remained high compared to pre coven levels jews impressive considering or guess now have the additional option of are smaller and so family dinner the first four to six guess not only as of premise a key driver and our second quarter but the week of thanksgiving is typically or largest sales week of the fiscal year
spk_3: while we cannot fully predict what did i mean consumer behavior will look like over the next few days we expect a strong thanksgiving sales we should exceed pre pandemic levels while the operating environment remains challenging i'm confident that are stores will deliver on a mission a pleasing people this and tire holiday season
spk_1: looking longer term i remain excited about the strategic initiatives we have in place to deliver sales growth and strengthen our business model
spk_3: that starts with the launch of of both kitchen and the expansion of our virtual brands that i spoke to earlier are both kitchen concept cracker barrel kitchen opened in los angeles at the end of october or approved kitchen offers a streamlined version of a cracker barrel menu of our traditional favorites as well as chicken and biscuits and the pancake kitchen offerings the seen positive guess response so far and we believe this format can be a meaningful revenue driver for us the plan to open additional ghosts kitchen locations in los angeles in the near future and long term i'm very excited about the potential to bring home style food of cracker barrel and two additional urban areas
spk_1: you've also expanded the rollout a virtual brands as an added sales layer to our existing stores or second virtual brand the pancake kitchen launched in the last week for the quarter and initial fills results are promising we believe this plan helps us and dress unmet demand for breakfast offerings v a third party delivery and many geography is additionally we remain optimistic about the sales potential for the chicken and biscuits plan which helps us to leverage excess kitchen capacity during underutilized tape and to target additional users of the brand who might not otherwise visit a cracker barrel restaurant the first quarter also marked a one year in the bursary of the launch for digital store as a reminder this was a new digital platform that integrated restaurant retailing catering offerings and to a unified inconvenient user experience and it's first year of existence the digital store registered over forty three million session and handled over three point four million orders in addition to supporting the growth in our off premise business it enhances the dining guest experience through features such as online wait list and mobile bay our digital investments have created a platform for us to build direct digital relationships with our guess including a male an sms text marketing personalization through our website and now and the introduction of loyalty program additionally we've seen positive results from the shift and are paid media towards digital channels which allows us to better target or messaging to specific audiences we expect to continue to shift more advertising dollars to these channels as we find new ways to leverage are expanding digital capabilities
spk_3: lastly i'd like to provide an update on our leadership team so previously announced cried pommel for be joining us is our new senior vice president and chief financial officer starting next month
spk_1: read brings with him over twenty years of experience in the restaurant industry most recently of fearful of red lobster
spk_3: prior to that craig served a senior vice president at red lobster for five years and served in various financial and data analytics tools at darden for over a decade
spk_1: right track record of financial leadership and strategic planning will be a great asset to our leadership team as we continue to explore ways to drive sales growth and strengthen our business model in a postcode the world before during the call over to don't want to thank him for his outstanding contributions to the company particularly over the last year
spk_3: during his time as interim ceo is been an extraordinarily helpful to have an organization and a wonderful partner to me doug's a twenty year cracker barrel veteran and he'll remain a valuable part of the franco barrel senior leadership team see continues his responsibility as senior vice president of forcing and supply chain and helps craig familiarize himself with our company and are people thank you dad and without altering the call over to you
spk_4: like you say the and good morning everyone but the thought for we reported total revenue of seven hundred eighty four point nine million dollars a restaurant revenue increased nineteen point four percent to six hundred and fifteen point four million dollars and our retail revenue increased twenty nine point two percent to one hundred sixty nine point five million dollars versus the prize
spk_5: your for school
spk_4: heir to the fourth quarter of fiscal two thousand and nineteen profitable for restaurant sales increase one point four percent we're providing are comparable sales puzzles back to fiscal my my team or most recent clean for fiscal year which provides better indication of sales growth employees your comparisons restaurant sales performance and proof sequentially each most of the poor and breakfast can do to be are strongest growth they poured particularly during the week we also saw significant recovery and the weekend breakfast and lunch date parched or in the poor which we believe is poor merrily due to the improvements sure staffing levels or probable store are premise sales were up one hundred sixty percent compared the first quarter of fiscal two thousand my ninety or impressively we retained almost all of our from the sales for last year when we had a large number stores operating either or premise only over significant capacity restrictions or third party delivery channel delivered strong year over year growth during the core which helped to offset the miles to climb and our individual the to go to jail of the full retail sales were again above our expectations in the fourth quarter and increase seventeen point six percent over two thousand ninety while the supply chain environment remains volatile a retail team has done an excellent job of managing inventory and leaning on our everyday assortment to minimize the disruption to our retail shops moving onto expenses are total costs of goods sold in a quarter was thirty point nine percent of total revenue versus thirty point eight percent in the prior your border a restaurant cost of goods sold was twenty six percent of restaurant sales vs point by point seven percent in the prior your poor of never get increases and pork beef and a will cost for of comedy inflation of seven point three percent which was above our expectations which largely offset the impact of disinflation through five point five percent pricing and nick save ability to on the corner retail costs of goods sold was forty eight point seven percent of retail sales vs fifty point six percent in the prior your poor this one hundred and ninety basis point decrease was primarily driven by lower downs as we continue to sell through inventory at full price at higher levels and we have historically first quarter labor and related expenses were thirty five percent of revenue versus thirty five point one percent from the poor you're poor or labor costs were pressured by wage inflation on a constant mix spaces would lie point one percent which increase throughout the fourth quarter and came in above or ex
spk_6: occasions
spk_4: as well as elevated overtime use these pressures were primarily offset by sales leverage as well as lower manager staffing levels and related and sent compensation adjusted other operating expenses were twenty three percent of revenue vs twenty four point five percent from the prior your quarter this one hundred and fifty basis point decrease was primarily driven by sales leverage and somewhat lower depreciation as a result of reduce capital expenditures throughout the pandemic the save ability was partially offset by a number of factors including increase maintenance expense as we spent more the pair of for property equipment they were weren't able to secure replacements for due to supply chain issues increase fees as a result of the growth of our third party business and har supplies expenses due to inflation we expect us last factor to be a significant impact on our second quarter other operating expenses well dude or elevated or premise business in addition to the outside costs associated with our human service offerings next move beyond store level margins our general and administrative expenses in the fourth quarter or forty point nine million dollars which is unfavorable to the prior your first quarter adjusted g and a five six point five million dollars this increases driven in large part by expenses related to staffing increases and recruitment including managers and training and home office report as well as hard for apple expense that interest expense of the quarter was two point six million dollars compared to ten point seven million dollars in the prior quarter this a point one billion dollar decreases result of a lower debt levels as well as a lower weighted average interest rate to the couple of that offering we completed in the fourth quarter or effective tax rate for the fourth quarter was seventeen point one percent compared to an effective tax rate of twenty four point six percent in the prior your poor as reminder er prior your tax rate was elevated as a result a reduction in tax credits and taxes on the sale and leaseback transaction that took place during the prior year first quarter these fourth quarter results culminated and gap on and per diluted share of a dollar and forty one sense and adjusted earnings per diluted share of a dollar fifty two cents when come adjusting for the non cash amortization of the asset recognize from the games on the sale leaseback transactions and the fourth quarter adjusted even the a was seventy one point nine million dollars a thirty two point nine percent increase over a prior your fourth quarter adjusted even the results bonnie into a balance sheet we have the fisc the quarter with three hundred and seventy seven million dollars in total debt compared to nine hundred and forty nine million dollars at the end of the fourth quarter of last year or strong balance sheet and cashflow puts us in a position to continue to invest in the business while returning capital to shareholders and disregard we are pleased to announce quarterly dividend but the dollar thirty per share which matches are pre pandemic dividend level but not a lower base of owning the said reflects our confidence of in the business this as we progress through twenty two despite the uncertain and challenging business barman with respect to our fiscal twenty two outlook everyone should be mindful the risks and uncertainties associated with his outlook as described in today's earnings release and are both reports filed with the fcc given the continued uncertainty around the current inflationary barman we will be providing only the following updates to our for your expectations of commodity and wage inflation exceeded our expectations in the first quarter and we now expect for your commodity inflation and punched of with mix wage inflation in the hive single digits in tinge of expect for your capital expenditures one hundred and twenty million dollars including the opening of three new cracker barrel locations and fifteen new maple three biscuit the locations our capital expenditure for subject to supply chain disruptions which could delay the delivery of equipment and leaving development timelines but now expect an effective tax rate approximately seventeen percent a star sales friends we believe november palpable store or restaurant sales growth compared to fiscal two thousand and my team will improve versus the fourth quarter or we're optimistic that the sale results will continue through the remainder of the second quarter turning to our margin expectations we currently expects second quarter adjusted operating margin to be approximately five and a half to six percent of revenue this expectation includes the impact of more significant wage commodity and other operating expense inflation in the second quarter compared to the fourth quarter as well as higher expenses associated with the second quarter or premise occasion business and with that i will time the call over to the operator for questions
spk_7: thank you we will now begin the question and answer session
spk_0: to ask a question you may press star than one on your touchstone phone if you're using a speaker phone please pick up your handset before pressing the keys to withdraw your question please press star and to at this time we will pass momentarily to assemble our roster my first question comes from open stamp with loop capital please go ahead
spk_8: quebec's a have to my question are you just want to ask on the money for i know it's as you get over difficult you know on a core regular basis he to predicts in his on president environment or but you know any color as you know him just as far as high single digit number for the four year you know should that be kind of you know any submarines over next three quarters war is be higher than that you dig into he specifically or it's a color the that you can provide on it would be very helpful
spk_4: out in what i would say is that you know when we look at the elements of the inflation you're you're you're correct there is certainly difficult to predict record a quarter of the from a commodity perspective that would be slightly higher in the second half compared to the first half and i see that the the wage inflation as we're looking at it to be relatively stable open consistent with the guys as we gave the score
spk_8: okay rethink the images from alabama and i'll hop back of you put it under a different time you'll certainly you know they're had a many of your which appears at were not able to properly staff in was we cool wraps you guys you're certainly seem to have done a good job that and on your keys you can walk through like will be key factors you think that's why you were able to keep her stores you know from both are park after and for school
spk_9: well done the same the all of to that think our first of all and the are feel teams and are hr teams have done i think a phenomenal job of addressing the staffing concerns fed every once and dealing last but certainly in in our industry and they have tried all sorts so different programs and tactics to on not just too
spk_1: recruit new employees but they've also been very focused on retaining the ones that we have so weak commented and the prepared remarks i think this new virtual orientation as an example of a program that got quickly put into place where if we i'm hire an employee they can
spk_9: really do the orientation on their around and later that day and then come to the to the restaurant ready to work ah really the next day almost and arm and we've been able to put that whole program into place really recently and roll it out to the che through the chain and that has really helped i think make us an employer of choice for a lot of stop potential workers
spk_8: we make sense that you see any dog a have back and cuba
spk_0: my next question comes from jake by it lead with tourists securities please go ahead
spk_10: is is actually jack on projects are taking the questions bomb as will look really follow up on on the staffing environment and maybe and gives them more matters with around where you make your staffing is currently against pregabalin if there's a theme or upside to if your stat even better if they can be a further driver details going forward
spk_3: yes so we as we mentioned ways made significant progress since the last time we talked and over the course of the first quarter ah i believe we've largely it's not completely closed the gap in the back of the house so were feeling really good about where we are in girl
spk_1: cox am i think in the front of the house specifically with servers we would love to have and we're working hard to to right to hire even more but i'm we do feel good about where were positioned going into the busy season and we think that those improvements in staffing
spk_3: is certainly a meaningful part of how we've been able to achieve the sales
spk_9: recovery that we've seen
spk_3: you know it it's it's in addition to just having the employees i think they're still pockets of covert call outs they they're impacting our business and once the the more than that settles down across the country and in our restaurants i think that will be another benefit to our
spk_9: yield leaders to know that that can you know fill the dining rooms completely and take care of the jazz don't wanna come and on with us
spk_8: greatest really help wanted it sound like you're still small room for for done else improve on the that's that levels late but i get my next question i wanna as about kind of the operating margin god is that he gave her the second quarter and and out of think about that
spk_10: as we move forward it is there anything temporary in there there you mentioned recruiting and training cause some and immediately and dna or or how you think commodity prices are gonna go grab the year that that might make the second quarter marginal a lower than the maybe the rest of the or or or and the way i can think about that as a mile without
spk_4: yeah you know jack in terms of the the question about temporary you know i think earlier you know three to six months ago we thought some of these inflationary pressures roland bit more transitory but as as we've seen from or guidance and what you're here and across the industry of think that's kind of gonna stick around a bit longer and i think we will you know will continue to to cannot monitor the situation but us i think that the and until we get through that the fiscal year and start of a little more visibility in the twenty three of think we'll continue to see the pressure of think also when you start looking at our business in the second quarter more mind you have a couple of things that that so that allocated a period of time when we have higher mixer retail sales relative to other quarters in the year so that gives us a little bit a cause pressure from cost of goods and then the special occasion business and oliver catering business that we've talked about is really strong in the third in the second quarter especially relative this a prior years and that also put it's a little bit of pressure on our margins know specifically you know or or feast and and those large meal that we've talked about have a lower margins we're really pleased with the dollar margins those deliver force but they don't deliver the same level of for cent margins so those are kind of a couple of touch points
spk_10: on one of how we see things developing in the second quarter and and why they are where they are coupled key one i could see that really help on and and then just one last one arm
spk_8: image the price increase
spk_11: if it agrees with you to buy them have percent some what would you think about another price increase in the rest the or or coming up soon to the can also the though they like also usually
spk_1: hey it's jan you know as we think about the price increase that we took in august we're continuing to monitor for any effect that may have had on our traffic and so far with about three nap months worth of data on that we really are seeing any negative impact on our guess trafficker menu mac
spk_12: and so while that increase with a little bit about typical year is where we've taken less than three percent yeah we're we're just look at this unprecedented inflation and the softening of case they were sensitivity the price and we think we still have an increased pricing power right now in the near term so we are planning to take another increasing que that will probably also be above that that typical range of three percent so it will be higher than are that are normal price increase in que three you know we feel okay about that we've we've always had a really strong equity in the area of everyday value so that over lots of years of having you quality home style scratch made food at a fair price and we don't do lpl coupon in dealing with everyday value all the time
spk_1: time and so
spk_13: we've still got a lot of great great offers everyday lunch features at six ninety nine dinner meal starting at seven ninety nine so we think we've got plenty of room to take more pricey and que three
spk_0: great thank you
spk_14: my next question comes from san salvatore with bank of america please go ahead oh thank you i had a couple questions about your digital business if i may that the first i'm just thinking about the if you could this aggregate may be that growth between the core of premise and then the virtual brown i know you said you added chicken and biscuits five hundred restaurants and you've launched a new brand as well but where you seen and the growth and and how should i think about that going forward and the related question is on margin you know i understand that there's some higher costs associated with the third party delivery but i guess to the extent that the idea is to leverage existing spare capacity with them these virtual brands
spk_9: you should they be net positive to margins over time years as a while volumes recover should they be a bit of and yeah internet had when i go for business but obviously with with profit dollars growing so just anything color didn't give me on on that thanks okay so there there's a lot in this and a colleague all three of us to that question
spk_3: oh man the and if we don't you just stay in the cure or tried of more and on her first of all the virtual brand or i think you understand the strategic and ten behind it which was to appeal to guess who would otherwise not be coming into a restaurant who might be shopping for a certain type of food instead of a
spk_1: brand arm and and who are we believe would be i completely arm incremental piece of business so in terms of our margin expectation i don't think we're targeting it as a percentage to be better because these are certainly on sale you
spk_9: offerings are we want to ensure that were were delivering the value of but again we think that it's it some a prince incremental to the
spk_3: to the to the profits of the store i'm we roll that out significantly over the quarter five hundred stores and chicken and biscuits and now hundred but it was late in the quarter so we're really just getting the learnings it in addition we had done we had some supply chain issues it was hard to get chicken tenders during a lot of the porter and
spk_9: in some technology integration issues as we were bringing up so i don't think we have a great player read to desegregate and as i think i understood your question yeah except to say that in a we're pleased with it at the outset but both of the brand's will look to see whether there's additional stores
spk_3: that we can open it and which stores that were already open arms have strong sales and why ah and will continue to look at the offer and the pricing as we go and and i know gin and i'll let you may want to add to this janice got some marketing plan once where she
spk_15: sure we've got the execution down i think we can think about how to market this on those channels
spk_16: and so i don't know what i didn't answer jen why don't you you know you want to add anything on the brands
spk_12: yeah i think sandy said it well in that were only about three weeks and to having expanded chicken biscuit to the five hundred and the pancake kitchen by cracker barrel than one hundred but again just for a couple of weeks our focus right now is on optimizing the menu we started those with v very streamlined menu very near to sort of the the smallest and we'll be adding items with the big focus on adding beverages do is make sure we can maximize sale maximize margin on those looking at additional stories to add so lot more growth to come from the virtual brands are also really excited about what we're seeing i'm just in the initial few weeks with our first ever ghost kitchen so we've opened a ghost kitchen out in the los angeles area and have plans to open a couple more so that again is is one hundred percent incremental for us because it gives us a chance to reach gas in urban areas like los angeles where we have no
spk_14: oh cracker barrel nearby so excited to see what would that type of business channel can do for us as well and will market primarily through the third party app because that's where the that's where those guest stars that will do some marketing there
spk_17: got it thank you and only to to be to hit all the answers that up
spk_18: kagan
spk_19: the next question comes from butler you with mkm partners please go ahead
spk_8: read next taken a call and got don't worry i have some supply chain question for you you aren't entirely left out
spk_4: i guess if we could start
spk_10: is there anything more you can share and turns out that the failed kgb and are you get some language around what you're seeing for november
spk_4: for the holiday week you could share a little bit more incremental it he just for october's exit velocity and and what you seen so far november
spk_18: and then just as you think about supply chain or i'll ask get to waste a where are you right now in terms of what locked in
spk_19: on your contracted are good for for your basket and then also
spk_20: with the tech investments that you've been making ugly
spk_4: not just the digital ones you talking about also be equipment related ones for and software related ones for in store or are you running into any issues you see any challenges with that and then also how confident are you now in terms of getting the three cities and the fifties maple street open for the u thanks okay what mummies and have you tried to keep up with on it and they are on they got a think i've got all the although several parts that breath so first off i wouldn't comment that during the first quarter we saw sequential improvement across all day parts throughout the quarter and have been please with how things are shaping up thus far in the month of november and we commented that we thought we would be in a better place versus nineteen compared to the fourth quarter so look good so far and cute to in terms of the lock commodities we have about forty percent of our commodities lock for the balance of fiscal twenty two and the typical year we're usually at this point of the around forty to fifty percent he have given the high prices across a number of fronts we make conscious decisions not blocking were monitoring markets and more a positions as we see appropriate and we move to a year in terms of the point of sale rollout we have a some challenges with the waves of relating that ships and some other components and we have or and and in approximately five hundred for so far with the pos and members but or just recently from the or see i owe that the supply chain it's gonna break loose a little bit and we think that would be complete by march clearly depended on getting those install but we're feeling pretty good about that which will lead us to some other additions to order for ron cost or food costs is that we talked about in the previous court will complete that as well and then in terms of our confidence relating to the development schedule you know i think things have been interesting on that front of or kind of back up a little bit we we have seen and are mates and it's expensive area that we're spending a little bored maintenance expense because we've been having difficulty getting a quip meant and that kind of flows into the development taiwan's for both the cracker barrel in the maple
spk_18: three brands and have had suppliers that haven't been as willing to commit the delivery schedules and terms of equipment so we've been think about how to manage that
spk_0: and and similarly with some of our contractors are looking for a little bit different expectations and terms of their commitments to time line so with a pretty good about it will keep you posted as that develops over the next couple of wars thank you think that mean that means the plate of a good with her
spk_21: again if you'd like to ask a question please press certain one apis time
spk_8: or next question comes from brian merlin led by to bank please go ahead
spk_9: i think some he's target the capital allocation priorities for the bouncer this year and and beyond in and in the past the company of the history of special dividends the you've also repurchase stuck in the past so as you sit here and age wondering if you might see one form of cheryl to return over the other and you discuss how the uncertain and operating environment or or perhaps even the prices that might might form those decisions as you move forward ah yeah brian so i think the board continues to take as as they have four years a balanced approach we first one ensure that we make the investments and our existing assets that we find our growth ah and
spk_15: shit is that but the technology and the new units we've thought about
spk_1: or that we farm plan to take that dogs talked about i think than relative to both the david and strategy and the share repurchase strategy on the both of those are arm or are considered by the board as we said we announced a dividend at a dollar thirty four this quarter which
spk_9: she is reflect say
spk_0: very attractive yield we believe and a dog
spk_1: and up the parapet pay ratio that although hi i think reflects the confidence that the board continues to have in the recovery that we've had in the country will continue to have with the brand and the company
spk_0: that you

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