Financial Data and Key Metrics Changes - Fiscal 2025 was the first full year of executing the refresh strategy, with financial performance in line with or above initial guidance ranges for key metrics [34] - The company generated $239 million of free cash flow in fiscal 2025, reducing year-end debt to its lowest level since 2018 [36] Business Line Data and Key Metrics Changes - The company consolidated four distribution centers into modern facilities, enhancing assortment options while lowering operating costs [35] - Strategic investments in automation and larger facilities were made to support growth and improve capabilities for customers [35] Market Data and Key Metrics Changes - The company is focused on earning a higher share of business within a growing $90 billion target market that includes natural, organic, specialty, multicultural, and conventional grocery retailers [34] Company Strategy and Development Direction - The refresh strategy aims to add value for customers and suppliers while improving operational efficiency [34] - The company is committed to developing new capabilities to help customers compete effectively and support suppliers in brand growth [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategy due to solid performance driven by customer resilience, leading to accelerated multi-year objectives [34] - The company acknowledges significant improvement opportunities and is striving to enhance value for all stakeholders [36] Other Important Information - The fiscal 2025 impact report was published, outlining progress against key sustainability focus areas [37] Q&A Session Summary Question: How can we have two years of losses? What different initiatives are you pursuing to achieve durable profits? - Management explained that losses were primarily due to non-cash depreciation and strategic actions that position the company for future profitability and improved cash flow [40] Question: How is the company adapting to the onset of the MAHA movement and accompanying directives from Washington? - Management noted ongoing dialogue around policies encouraging healthy consumption, which aligns with existing consumer trends that the company embraces [41]

Financial Data and Key Metrics Changes - For Q4 2025, net sales were $7.7 billion, down from $8.2 billion in the previous year, reflecting a 1.6% growth when excluding the $582 million benefit from an extra week in last year's quarter [22][23] - Full-year adjusted EBITDA was $552 million, slightly above the midpoint of the outlook provided earlier, with a Q4 adjusted EBITDA of $116 million compared to $133 million in the prior year [27][28] - Free cash flow for Q4 was $86 million, bringing the full-year total to approximately $240 million, a significant improvement from a cash use of about $90 million in fiscal 2024 [28][29] Business Line Data and Key Metrics Changes - The natural segment grew by 9% on a comparable 13-week basis, outperforming the market, while conventional segment sales declined by 6% [23] - For the full year, net sales rose 4.6%, with volume growth of 1.4% and inflation at about 1.8% [24] Market Data and Key Metrics Changes - The company is targeting a $90 billion addressable market, focusing on natural, organic, specialty, multicultural, and conventional grocery retailers [10] - The company expects net sales to grow in the low single digits on average from fiscal 2024 to 2027, reflecting better-than-projected organic growth [17] Company Strategy and Development Direction - The company aims to become the food industry's most valued partner by providing innovative products and services to help retailers and suppliers grow profitably [9] - The refresh strategy focuses on creating more value for customers and suppliers while becoming a more effective and efficient business [10][12] - The company plans to enhance capabilities in merchandising, revenue growth management, and technology to drive long-term growth [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory and ability to create sustainable long-term value despite challenges faced during the cyber incident [20] - The company anticipates continued execution of its strategy and another year of profitable growth, with adjusted EBITDA expected to exceed $730 million by fiscal 2027 [18][34] Other Important Information - The company reduced net debt to around $1.8 billion, the lowest level since 2018, and reduced net leverage by 0.7 turns compared to the previous year [8][29] - The company is focused on improving the experience for independent customers and emerging suppliers, which are critical to the industry's vitality [16] Q&A Session Summary Question: Opportunities in natural merchandising initiatives - Management highlighted three key areas: innovation for natural retailers, deepening involvement in categories for conventional retailers, and simplifying the experience for emerging suppliers [37] Question: Improving conventional profitability - Management noted that natural products have historically higher margins, and efforts are focused on improving product mix, driving efficiency, and embedding lean practices [40] Question: Updated three-year guidance and customer attrition - Management indicated solid growth in the customer file and better-than-expected organic growth, particularly in natural and organic segments [46] Question: Industry promotional backdrop - Management observed a disciplined increase in promotional activities, with volume sold on deal still below 2019 levels [48] Question: Volume metrics and cyber incident impact - Management clarified that volume growth was skewed towards natural products, with a heavier impact from the cyber incident on conventional sales [51] Question: Factors leading to raised adjusted EBITDA algorithm - Management cited stronger top-line growth, continuous progress on shrink reduction, and productivity efforts as key contributors [52] Question: Relationship with Amazon - Management refrained from commenting on specific customers but emphasized a tailored strategy for enterprise accounts [56] Question: Capital investment and facility expansion - Management confirmed ongoing rationalization and optimization of distribution centers, with plans for automation and modernization [62] Question: Margin gain flow in 2026 - Management outlined key components for EBITDA growth, including the exit of unprofitable contracts and continuous shrink reduction efforts [66] Question: Tariff impact - Management is closely monitoring tariffs and working with suppliers and customers to manage costs effectively [68]

Company Performance & Strategy - Cracker Barrel's refresh strategy, intended to modernize the brand, faced significant customer backlash [2][3] - The company anticipates traffic to decline by 7-8% due to the negative reaction to changes, particularly regarding the "oldtimer" menu item [2] - Management acknowledged the misstep and is backtracking on some refresh initiatives [3] - The company's experience highlights the risk of altering elements that customers deeply value [3] Leadership & Decision-Making - The CEO had to address the controversy on a difficult conference call [2] - The refresh strategy, while initially seen as a good idea, proved to be ill-advised in execution [2][3] - The situation underscores the importance of carefully considering customer preferences when implementing changes [3] - The company wishes the CEO well despite the mistake [4]