Cracker Barrel Old Country Store, Inc.

Good day and welcome to the Cracker Barrel fiscal 2023 fourth quarter conference call. All participants will be in 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 one on your touchtone phone. 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 Caleb Yohannes. Please go ahead.

Thank you. Good morning and welcome to Cracker Barrel's fourth quarter fiscal 2023 conference call and webcast. This morning, we issued a press release announcing the fourth quarter results. In the press release and on the call, we referred to non-GAAP financial measures for the fourth quarter ended July 28, 2023, as well as our expectations for the first quarter. The non-GAAP financial measures are adjusted to exclude the expected non-cash amortization of the assets recognized from the gains on the sale and leaseback transactions, certain expenses related to our CEO transition, and a corporate restructuring charge. 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 and 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, CEO-elect Julie Phelps-Massino, and Senior Vice President and CFO, Craig Pimels. 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 Julie. On this call, statements may be made by management of their beliefs and expectations regarding the company's future operating results and 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 furnish to the SEC. Finally, the information shared on this call is valid as of today's date. The company undertakes no obligation to update it except as may be required under applicable law. I will now turn the call over to Cracker Barrel's president and CEO, Sandy Cochran. Sandy?

Thank you. Good morning, everyone. This morning, we reported total quarterly sales of $836.7 million and an adjusted operating income margin rate of 5.3%. which was approximately a percentage point higher than the prior year fourth quarter. As we said in our last earnings call, our fourth quarter began slowly, but we had expected that traffic would improve in June and July with the onset of the summer travel season. Unfortunately, this didn't materialize, and our restaurant and retail sales performance came in below our expectations. Although they've stabilized, we believe these fourth quarter traffic trends will continue through most of the first quarter as well. We are, of course, taking actions to address them, as I'll get to later in the call. In the face of the top line challenges that we experienced in the fourth quarter, our teams worked hard to control costs. Between their efforts, pricing, and inflationary easing, we were able to deliver higher fourth quarter margins than in the prior year despite our lower traffic levels. Of course, there were other bright spots in the quarter as well, particularly in certain areas likely to help us in the longer term. Our operations teams focused intently on the guest experience, operational excellence, staffing and retention, and we made and continue to make meaningful headway in these areas. We continued our successful deployment of back-of-the-house technology, which will be foundational for us going forward. And despite a very challenging environment, our retail product assortment resonated with our guests, and our teams managed inventories exceptionally well and delivered solid retail margins even in the face of lower traffic. We launched our loyalty program, Cracker Barrel Rewards, internally in late July, and I'm excited to announce that it'll be available to guests across the country by the end of this month. We believe our loyalty program will be a key traffic driver for us over the long term, and I'll speak in more detail about the program later in the call. From a full-year perspective, we achieved our ambitious goal of growing our catering business above $100 million, and we delivered $30 million in sustainable cost savings. We opened a total of 12 new Maple Streets and two new Cracker Barrel locations, and we returned more than $133 million to our shareholders in the form of dividends and share repurchases. Although we believe that the traffic pressures that we're experiencing reflect a challenged consumer environment, we also believe they were exacerbated by our marketing and media strategy. The volume and substance of our marketing messages in the fourth quarter were not as effective as we'd wanted, particularly against the backdrop of a highly competitive and promotional marketplace. We lowered our advertising spend, because we traditionally found advertising to be less impactful in the fourth quarter, and instead invested funds in store staffing and labor, which we think are longer-term imperatives. And although we focused our messaging on value, our message did not break through against the highly promotional advertising we saw from our competitors. Finally, we think we still have opportunities with regard to the guest experience. I'd like to turn it over to Craig now for a more detailed look at the quarter from a financial perspective and to discuss our outlook. When Craig is done, I'll come back and comment on the actions we're taking to address our traffic situation and position us to change our trajectory in 2024. Craig?