Cracker Barrel(US:CBRL)2025-12-09 21:28Financial Performance - Total revenue for the first quarter decreased by 5.7% compared to the same period in the prior year, amounting to $797,188,000[98]. - Comparable store restaurant sales decreased by 4.7%, while comparable store retail sales decreased by 8.5%[99]. - Operating income for the quarter was a loss of 4.1% of total revenue, compared to a gain of 0.8% in the prior year[97]. - Operating loss for the first quarter of 2026 was $(32,797), a significant decline from operating income of $7,071 in the same period of 2025, attributed to decreased total revenue and higher expenses[122]. - Net loss for the first quarter of 2026 was $(24,622), compared to net income of $4,844 in the prior year, primarily due to the operating loss[127]. - Cash used in operations was $53,430 in the first quarter of 2026, a substantial increase from $4,395 in the same period of 2025, driven by operating losses and timing of payments[130]. Cost and Expenses - The cost of goods sold increased to 31.2% of total revenue, up from 30.6% in the previous year[97]. - Labor and related expenses rose to 37.8% of total revenue, compared to 36.4% in the prior year[97]. - Other store operating expenses rose to 28.7% of total revenue in the first quarter of 2026, compared to 25.0% in the prior year, primarily due to increased occupancy and advertising costs[113]. - Labor and related expenses increased to 37.8% of total revenue in the first quarter of 2026, up from 36.4% in the same period of 2025, driven by higher store management compensation and hourly labor costs[108]. Strategic Initiatives - The company plans to refine its brand identity and enhance its menu offerings as part of its multi-year strategic plan[93]. - Negative publicity from recent brand initiatives contributed to a decrease in guest traffic, impacting overall sales[102]. Capital and Financing - Capital expenditures for the first quarter of 2026 were $34,165, down from $38,887 in the prior year, with expectations of $110,000 to $125,000 for the full year[131][132]. - The Company issued the 2030 Notes with a cash interest rate of 1.75% per annum, maturing on September 15, 2030, and net proceeds of approximately $335 million after fees[136]. - Approximately $145.9 million of the net proceeds from the 2030 Notes were used to repurchase $150 million of the 2026 Notes, which bear a cash interest rate of 0.625% per annum[137]. - The Company had negative working capital of $288.3 million as of October 31, 2025, an improvement from negative working capital of $312.5 million on August 1, 2025[144]. - Outstanding borrowings under the 2025 Revolving Credit Facility totaled $65 million as of October 31, 2025, with interest rate risk managed through a mix of fixed and variable rate debt[154]. - A one-percentage point change in the $65 million outstanding borrowings would impact pre-tax annualized costs by approximately $657[155]. Dividends and Share Repurchase - During the first three months of 2026, the Company paid a regular dividend of $0.25 per share and declared another dividend of $0.25 per share for payment on February 11, 2026[140]. - The Board of Directors approved a share repurchase authorization of up to $100 million, although no shares were repurchased in the first quarter of 2026[141]. Tax and Credit Risk - The effective tax rate for the first quarter of 2026 was 32.6%, an increase from (287.8)% in the prior year, primarily due to the benefit of employment credits in the previous period[124]. - The Company believes it does not have a material exposure to credit risk related to its Capped Call Transactions and Convertible Note Hedge Transactions at this time[156]. Store Operations - The number of Cracker Barrel locations decreased from 658 to 656, while Maple Street Biscuit Company locations decreased from 69 to 54[97]. - The company operates 656 Cracker Barrel stores in 43 states and 54 Maple Street Biscuit Company locations in ten states as of October 31, 2025[88].