Cracker Barrel Old Country Store, Inc.

Good morning, and welcome to the Cracker Barrel Fiscal 2022 Fourth Quarter Earnings Call. All participants will be in a listen-only mode. Should you need any 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 one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Jessica Hazel. Please go ahead.

Thank you. Good morning and welcome to Cracker Barrel's fourth quarter fiscal 2022 conference call and webcast. This morning, we issued a press release announcing our fourth quarter and full year results. In this press release and on this call, we will refer to non-GAAP financial measures for the fourth quarter and fiscal year ended July 29, 2022. The non-GAAP financial measures are adjusted to exclude the non-cash amortization of the asset recognized from the gains on our sale 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 this 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 Pommels, and Senior Vice President and CMO, Jen Tate. Sandy and Craig will provide a review of the business, 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. Many of the factors that could affect results are summarized in the cautionary description of risks and uncertainties found at the end of the press release and are described in detail in our reports that we file with or furnished 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 earnings per share that were above our expectations with an operating income margin of 4.4% that came in within our anticipated range of 4.0 to 4.5% of total revenue despite softer sales than we had predicted and inflation that was at the top end of our range for the quarter. Our teams worked extremely hard and did a good job navigating the headwinds from the third quarter that persisted through the end of our fiscal year. Across the restaurant industry right now, management teams are confronting the challenge of navigating an environment of softer consumer demand and higher costs, coupled with the uncertainty about when either of these dynamics will abate. It puts even more pressure than normal on pricing and menu decisions, as we balance a desire for cost recovery against the potential impact on value perception and guest visitation, which if not properly managed, can lead to more challenging long-term behavioral shifts. While we always manage our business at Cracker Barrel to perform well in whatever environment we find ourselves, we do so while focusing on the longer-term success of the brand. To the extent that we've taken pricing, we've done so deliberately and selectively and preserved the value sections of our menu and maintained attractive entry points. We've also focused on the longer-term initiatives to improve our business model that we outlined back in June and about which I'll share some additional details in a moment. We remain optimistic that this steady perspective is the right one, particularly in this turbulent environment. Looking back at the fourth quarter, the challenging environment I discussed in June continued to impact us through the end of our fiscal year, including a slower than expected summer travel season, fewer visits from guests 65 and older, and high gas prices and other inflationary pressures that weighed most heavily on lower income guests. Due to our unique business model, we felt some of these pressures more acutely than others, particularly in June and July when gas prices and broader inflation were especially elevated and many households abstained from or curtailed summer holiday-related driving. From a cost perspective, food inflation came in at the very high end of what we expected. As we believe this inflation will ease over the back half of fiscal 23, we decided to pass on much but not all of the cost impact in our pricing. We believe this was the right decision to maintain our strong value proposition with our guests, especially in the face of a potential recession. Although we experienced lower visitation from guests over 65 during the fourth quarter, and will continue our efforts to improve in this area, we were pleased that we gained traction with and saw increased visitation from younger guests, particularly millennials between the ages of 25 and 34, and guests between 44 and 55. We also experienced increased visitation from lower income guests generally. All of these trends have continued into our first quarter of fiscal 23, indicating that our efforts to appeal to younger guests and our investments in value are bearing fruit. We saw other positives during the fourth quarter as well. Our off-premise sales remain solid and our retail teams continue their exceptional work in sourcing and supplying our stores with merchandise that resonated with our guests allowed us to top $700 million in annual retail sales for the first time in our history, all while maintaining a disciplined approach to inventory. Finally, we remain bullish on Maple Street, and despite the unexpected construction delays and supply chain issues that kept us from opening the number of stores we had hoped to open in fiscal 22, we remain very confident in the growth potential of this brand. As always, our investment decisions were focused on the longer-term success of Cracker Barrel, and the initiatives we are pursuing in the current environment reflect this. Investing in our operations to ensure a consistent, strong guest experience, investing in menu innovation to enhance check and to appeal to a broader guest base, investing in technology and making sure we maintain our critical competitive advantages so that we are well positioned in an industry when the inflationary pressures eventually ease. That we were able to make these investments while still returning near record levels of capital to our shareholders is a testament to our prudent and thoughtful approach to capital allocation. Through a compelling quarterly dividend and share repurchase program, we were able to return over $246 million to our shareholders in fiscal 22, our second highest level in the last 15 years. Craig will now go into some greater detail about the quarter and provide our expectations for the upcoming year. And once Craig is finished, I'll provide some additional details about our initiatives and our optimism about what's ahead. Craig?