Cracker Barrel Old Country Store, Inc.

Good morning, and welcome to the Cracker Barrel Fiscal 2022 Third Quarter Earnings Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touch-tone phone. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Jessica Hazel, Investor Relations. Please go ahead.

Thank you. Good morning and welcome to Cracker Barrel's third quarter fiscal 2022 conference call and webcast. This morning, we issued a press release announcing our third quarter results. In this press release and on this call, we will refer to non-GAAP financial measures for the third quarter ended April 29, 2022. The third quarter non-GAAP financial measures are adjusted to exclude the non-cash amortization of the asset recognized from the gains on our sell and leaseback transactions and the related tax impacts. The company believes that excluding these items from its 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 GAAP. The last pages of the press release include reconciliations from the non-GAAP information to the GAAP financials. On the call with me this morning are Cracker Barrel's President and CEO, Sandy Cochran, Senior Vice President and CFO, Craig Palmels, and Senior Vice President and CMO, Jennifer Tate. Sandy and Jen will provide business and initiative updates and Craig will review the third quarter financials and outlook. We will then open up the call for questions for Sandy, Craig, and Jen. On this call, statements may be made by management of their beliefs and expectations regarding the company's future operating results or expected future events. These are known as forward-looking statements, which involve risks and uncertainties that in many cases are beyond management's control and may cause actual results to differ materially from expectations. We caution our listeners and readers in considering forward-looking statements and information, particularly in the current environment. Many of the factors that could affect results are summarized in the cautionary description of risks and uncertainties bound at the end of the press release and are described in detail in our reports that we file with or furnish to the SEC. Finally, the information shared on this call is valid as of today's date and the company undertakes no obligation to update it except as may be required under applicable law. I'll now turn the call over to Cracker Barrel's President and CEO, Sandy Cochran. Sandy?

Thank you, Jessica, and good morning, everyone. This morning, we announced total revenue growth of 10.8% compared to the prior year and 6.8% compared to the third quarter of fiscal 2019. Although I'm pleased with the work that our teams did to drive our sales above pre-COVID levels, our top line came in below our expectations while cost pressures and deleveraging continued to challenge our bottom line. We were seeing encouraging sales trends as February progressed, but the macroeconomic environment and higher inflation slowed our recovery in March and April below our expectations. Three things in particular impacted our sales during the quarter. First, over 65-year-old guests have been slower to return to in-person dining than other demographics in our guest base. Second, the challenging economic environment caused some of our guests to manage frequency and check during the quarter. Finally, we believe that high gas prices disrupted traditional spring break travel patterns, resulting in lower travel visits. On the positive side, our off-premise business continued to meet our expectations, and we partially offset our dine-in headwinds with continued strong retail performance as we grew comparable store retail sales by 9.7% over the prior year quarter and by 21.6% compared to the third quarter of 2019. With regard to cost, we continue to experience historically high commodity and wage inflation as Craig will run through. And although we've taken pricing to help us protect our margins, Commodity inflation outpaced even our own robust expectations for the quarter. Craig will now go into some greater detail about the quarter and the current environment, as well as how we're thinking about the cost side. And once Craig is finished, I'll address the growth and top-line initiatives that we're pursuing to position us well going forward. Craig?