CRACKER BARREL OLD COUNTRY STORE, INC

Cracker Barrel Old Country Store, Inc. operates in the highly competitive restaurant and retail industries, with its Cracker Barrel Old Country Store concept appealing to both travelers and local customers through a full-service restaurant and a gift shop. The company also operates Maple Street Biscuit Company, a breakfast and lunch fast casual concept. The filing notes that the restaurant and retail industries are intensely competitive with respect to food quality, merchandise, price, service, location, and advertising, and that the company competes with national and regional chains, locally owned businesses, and the supermarket industry offering convenient meals. The company believes it has differentiated itself through a unique brand and guest experience offering a diversified full-service menu and nostalgic retail items.

The filing names no specific competitors by name but describes the competitive landscape as including national and regional restaurant and retail chains, locally owned restaurants and retailers, the supermarket industry, fast casual restaurants, quick-service restaurants, and casual and family dining restaurants. The company's stated competitive advantages include its unique brand and guest experience, a diversified full-service menu, a large variety of nostalgic and unique retail items, and consistent quality, value, and friendly service. As of September 12, 2025, the company operated 657 ¹ Cracker Barrel stores in 43 states and 68 ² Maple Street Biscuit Company stores in 10 states, with no Cracker Barrel or MSBC locations franchised.

The company generates revenue through two primary channels: restaurant sales and retail gift shop sales. In fiscal 2025, restaurants generated approximately 81% ³ of total revenue. The business model is transactional, with revenue derived from dine-in, pick-up, and delivery services at restaurants, and from the sale of decorative and functional items, rocking chairs, seasonal gifts, apparel, toys, cookware, and food items in the gift shops. The company's customer segments include both travelers and local customers. The company operates a customer loyalty program, Cracker Barrel Rewards, to increase consumer frequency and engagement. Off-premise channels, including Individual To Go, Third-Party Delivery, and Catering and Occasion, accounted for approximately 20% ⁴ of restaurant sales in 2025.

The company's restaurant segment offers home-style country cooking, serving breakfast, lunch, and dinner daily. The average check per guest in 2025 was $15.23 ⁵, representing a 6.8% ⁶ increase over the prior year. The company served an average of approximately 5,330 ⁷ restaurant guests per week in a typical store in 2025. Breakfast items range from $6.99 ⁸ to $21.99 ⁹, and lunch and dinner items range from $5.19 ¹⁰ to $25.99 ¹¹. Breakfast accounted for 28% ¹² of restaurant sales, lunch for 40% ¹³, and dinner for 32% ¹⁴. Approximately 93% ¹⁵ of restaurants serve beer and wine. The gift shops featured approximately 3,100 ¹⁶ stock keeping units as of August 1, 2025, a decrease from historical levels due to a SKU rationalization initiative. The company achieved high retail sales per square foot of approximately $489 ¹⁷ in 2025. The five largest retail categories by sales in 2025 were Apparel and Accessories at 33% ¹⁸, Food at 18% ¹⁹, Toys at 13% ²⁰, Décor at 13% ²¹, and Media at 7% ²².

The company's off-premise channels generated approximately 20% ²³ of restaurant sales in 2025, with Individual To Go accounting for approximately 50% ²⁴, Third-Party Delivery for 32% ²⁵, and Catering and Occasion for 18% ²⁶ of total off-premise sales. The company's five largest food purchase categories in 2025 were Beef at 17% ²⁷, Poultry at 12% ²⁸, Fruits and vegetables at 12% ²⁹, Dairy (including eggs) at 11% ³⁰, and Pork at 10% ³¹. Bacon was the single largest food item, accounting for approximately 5% ³² of total food purchases. Approximately one-third ³³ of 2025 retail items were purchased directly from vendors in the People's Republic of China. The company had over 1,300 ³⁴ billboards in 2025, which accounted for approximately one-fourth ³⁵ of total advertising spend.

In fiscal 2025, the company opened one ³⁶ new Cracker Barrel store and closed two ³⁷ Cracker Barrel stores. Building, site improvement, furniture, equipment, and related development costs for the store opened in 2025 were approximately $7,700 ³⁸, and pre-opening costs averaged $985 ³⁹ per store. The company currently plans to open two ⁴⁰ new stores during 2026. As of September 12, 2025, approximately 83% ⁴¹ of stores are located along interstate highways. Of the 657 stores open as of that date, the company owns the land and buildings for 358 ⁴², while 299 ⁴³ properties are either ground leases or ground and building leases. The company's current store prototype is approximately 8,900 ⁴⁴ square feet, including approximately 1,900 ⁴⁵ square feet of retail selling space and dining room seating for approximately 170 ⁴⁶ guests. As of August 1, 2025, the company employed approximately 76,730 ⁴⁷ people, of whom 364 ⁴⁸ were in advisory and supervisory capacities, 3,446 ⁴⁹ were in-store management positions, and 45 ⁵⁰ were officers.

Total revenue for fiscal 2025 was $3,486.986 million ⁵¹, compared to $3,440.127 million ⁵² in fiscal 2024. Net income was $107.481 million ⁵³ in 2025, compared to $82.630 million ⁵⁴ in 2024. Diluted earnings per share was $4.80 ⁵⁵ in 2025, compared to $3.68 ⁵⁶ in 2024. Operating income was $175.476 million ⁵⁷ in 2025, compared to $148.416 million ⁵⁸ in 2024. The company generated net cash provided by operating activities of $307.416 million ⁵⁹ in 2025, compared to $283.178 million ⁶⁰ in 2024.

The company's multi-year strategic plan, announced in 2024, is anchored on three overarching business imperatives: driving relevancy, delivering food and an experience guests love, and growing profitability. The plan includes modifying capital allocation to support increased investment in the business to drive organic growth. The company is focused on enhancing menu and retail options, reducing costs, improving margins, and increasing brand awareness, including through expanding its footprint and investing in strategic relationships. The company plans to open two ⁶¹ new Cracker Barrel stores during 2026. The company is also operating and developing the Maple Street Biscuit Company concept, which as of September 12, 2025, had 68 ⁶² locations in 10 states, all leased.

The company's growth strategy includes menu-driven growth built through three areas: enhancements to current core menu offerings, the addition of new core menu offerings, and limited time offer seasonal events or promotions. The company is also focused on driving retail sales by converting restaurant customers to gift shop purchasers. The company's digital marketing efforts have expanded to focus on improving brand preference, guest engagement, and sales, including through its customer loyalty program, Cracker Barrel Rewards, and its e-commerce platform. The company is also investing in technology to enhance guest experiences, including a digital experience that drives the loyalty program, enables to-go and catering business, allows for mobile payments, and provides a digital waitlist.

The filing discusses inflationary pressures on food, ingredients, retail merchandise, transportation, distribution, labor, and utilities. The company states that operating margins for restaurants are subject to changes in the price and availability of food commodities, including beef, pork, chicken, dairy, and produce. The company attempts to offset cost pressures through menu price increases and operational improvements, but notes that it may not be able to pass along price increases sufficient to completely offset cost increases without adversely affecting customer demand. The company also notes that labor is a primary component of operating costs and that increases in labor costs due to minimum wage increases, competition, or health care costs may have a material adverse effect on results of operations.

The company's retail supply chain involves longer lead-times and more remote sources of product, including from the People's Republic of China, and most retail product is distributed through a single distribution center in Lebanon, Tennessee. The company has a contract with an unaffiliated distributor with custom distribution centers in seven locations. The company's corporate systems and processes are centralized on one campus in Tennessee. The company has disaster recovery procedures and business continuity plans in place. As of August 1, 2025, the company employed approximately 76,730 ⁶³ people, with many store personnel employed on a part-time basis. The company emphasizes employee development and training, including a blended learning approach with hands-on, classroom, written, and cloud-based training.

The filing states that in 2024, as part of the multi-year strategic plan, the company made the decision to reduce its quarterly dividends. The filing also notes that there can be no assurance that the company will be able to actively repurchase its common stock, and it may discontinue plans to repurchase common stock at any time. The filing does not provide specific R&D spending levels, capital expenditure plans, share repurchase authorization amounts, or dividend policy with exact figures for the upcoming period.

The filing identifies several headwinds and constraints. Inflationary pressures on food, labor, and other costs are expected to continue, and the company may not be able to fully offset these through price increases. The company faces intense competition from national and regional chains, locally owned businesses, and the supermarket industry. The company's multi-year strategic plan is in various stages of testing and evaluation, and implementation across hundreds of stores involves risks, including potential negative consumer reactions, as evidenced by unfavorable feedback to an updated logo introduced in the first quarter of 2026. The company also faces risks related to its reliance on foreign-sourced retail products, particularly from the People's Republic of China, and potential tariffs or trade barriers.

The company notes that its business is somewhat seasonal, with historically higher sales and profits in the second and fourth fiscal quarters due to the holiday shopping season and summer travel. The company also notes that extreme weather conditions, natural disasters, and other catastrophic events could adversely affect its business. The company's advertising is heavily dependent on billboards, which are highly regulated, and the company's evolving marketing strategy involves increased advertising and marketing costs.

The company faces significant risks from inflationary pressures on food, labor, and other costs, which may not be fully offset by menu price increases without adversely affecting customer demand. The company's multi-year strategic plan, including a recent logo change that generated negative publicity, may fail to achieve its goals or elicit further adverse consumer reactions. The company is heavily reliant on foreign-sourced retail products, with approximately one-third ⁶⁴ of 2025 retail items purchased from vendors in the People's Republic of China, exposing it to tariffs, trade barriers, and supply chain disruptions. The company's substantial indebtedness, including $200.0 million ⁶⁵ in 0.625% Convertible Senior Notes due 2026 and $300.0 million ⁶⁶ in 1.75% Convertible Senior Notes due 2030, could restrict financial flexibility and increase borrowing costs. The company's single retail distribution facility in Lebanon, Tennessee, and centralized corporate systems create concentration risk from natural disasters or other disruptions.

Management's tone in the filing is forward-looking and focused on the multi-year strategic plan announced in 2024, which is anchored on three overarching business imperatives: driving relevancy, delivering food and an experience guests love, and growing profitability. The filing emphasizes that the company has undertaken certain initiatives as part of these imperatives, including modifying capital allocation to support increased investment in the business to drive organic growth. Management acknowledges that the multi-year strategic plan is in various stages of testing, evaluation, and implementation and that successful system-wide implementation across hundreds of stores relies on consistency of training, stability of workforce, ease of execution, and the absence of offsetting factors. The filing also notes that in the first quarter of 2026, the company introduced an updated logo, which received unfavorable consumer feedback and generated negative publicity, and that other initiatives contemplated under the plan may elicit similar adverse reactions.