Cracker Barrel Reports Increased Retail Sales Despite Restaurant Revenue Decline

• Board declares quarterly dividend of $1.25 per share

Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) today reported its financial results for the fourth quarter and for the full fiscal year ended August 3, 2018.

Fourth Quarter Fiscal 2018 Highlights

• Compared to the prior year fourth quarter, comparable restaurant sales declined 0.4% and comparable store retail sales increased 1.3%
• On a GAAP basis, earnings per diluted share were $2.55 compared to $2.23 in the prior-year quarter. Adjusted for the impact of the extra week in the current fiscal year, adjusted earnings per share were $2.19 (see non-GAAP reconciliation below).
• The Company announced that its Board of Directors declared a regular quarterly dividend of $1.25 per share to common shareholders.

Full Year Fiscal 2018 Highlights

• For the full fiscal year, comparable store restaurant sales growth of 0.6% and traffic of -1.9% outperformed the casual dining industry.
• Fiscal 2018 GAAP earnings per diluted share were $10.29; adjusting for the $1.06 impact of the one-time non-cash revaluation of our net deferred tax liability that occurred in the second quarter, EPS was $9.23; further adjusting for the estimated $0.36 impact of the 53^rd week, EPS was $8.87 (For a reconciliation of GAAP to non-GAAP financial measures, please see the tables accompanying this release.)
• During fiscal 2018, the Company declared regular quarterly dividends totaling $4.85 per share. Additionally, the Company declared a special dividend of $3.75 per share, bringing the total declared dividends in fiscal 2018 to$8.60 per share.

Commenting on the fourth quarter and full fiscal year results, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, “The softer sales trend we saw in May persisted throughout the quarter, leading to fourth-quarter results that fell below expectations. Our traffic was challenged, particularly with lighter users and during the dinner daypart, some of which was attributable to our menu and marketing promotion not delivering the anticipated topline traffic and sales. While our results did not meet our expectations, I am confident that our initiatives and plans for fiscal 2019 will drive improved performance.”

Fourth Quarter Fiscal 2018 Results   
Revenue   
The Company reported total revenue of $810.9 million for the fourth quarter of fiscal 2018, representing an increase of 9.1% over the fourth quarter of the prior year. Adjusted for the 53^rd week, total revenue increased 1.3% compared to the prior fiscal year. Cracker Barrel comparable store restaurant sales decreased 0.4%, as a 3.1% increase in average check partially offset a 3.5% decrease in comparable store restaurant traffic. The average menu price increase for the quarter was approximately 2.7%. Comparable store retail sales increased 1.3% from the prior-year quarter.

Cracker Barrel comparable store restaurant traffic, average check, and comparable store restaurant sales and retail sales for the fiscal months of May, June, and July and the fourth quarter were as follows:

Operating Income  
Operating income in the fourth quarter was $82.8 million, or 10.2% of total revenue, a decrease from the prior year quarter of $83.2 million, or 11.2% of total revenue. As a percentage of total revenue, increases in cost of goods sold and labor and related expenses were partially offset by reductions in other operating expenses and general and administrative expenses. Adjusted for the impact of the 53^rd week, operating income was $71.5 million, or 9.5% of sales.

Diluted Earnings per Share  
Diluted earnings per share were $2.55, a $0.32 increase over the prior year fourth quarter. Adjusted for the impact of the 53^rd week, diluted earnings per share were $2.19, a decrease of $0.04.

Quarterly Dividend Declared  
The Company’s Board of Directors declared a quarterly dividend to common shareholders of $1.25 per share, payable on November 5^th, 2018 to shareholders of record on October 19^th, 2018.

Fiscal 2018 Results  
The Company reported total revenue of $3.0 billion for the fiscal year, representing an increase of 3.6% over the prior year. Adjusted for the 53^rd week, total revenue increased by 1.6%. Comparable store restaurant sales increased 0.6%, including a 2.5% increase in average check partially offset by a 1.9% decrease in store traffic. Comparable store retail sales were down 0.1% for the fiscal year.

Operating income for fiscal 2018 was $293.6 million, or 9.7% of total revenue, compared to $313.2 million, or 10.7% of total revenue, in the prior year. Adjusted for the 53^rd week, operating income was $282.4 million, or 9.5% of total revenue.

Fiscal 2018 GAAP earnings per diluted share were $10.29, including the estimated $0.36 benefit of the extra week in the fiscal year, a 22.9% increase over EPS of $8.37 in the prior year. Reflecting the one-time non-cash revaluation of our net deferred tax liability associated with the Tax Cuts and Jobs Act of 2017 that occurred in the second quarter, adjusted EPS was $9.23, including the benefit of the extra week in the fiscal year.

Adjusting for the impact of both the 53^rd week and the one-time non-cash tax revaluation of our net deferred tax liability, earnings per diluted share were $8.87. (For a reconciliation of GAAP to non-GAAP financial measures, please see the tables accompanying this release.)

Fiscal 2019 Outlook  
For fiscal 2019, the Company expects total revenue of approximately $3.04 billion reflecting the expected opening of 8 new Cracker Barrel stores, as well as projected increases in comparable store restaurant sales growth in the range of flat to 1%, and comparable store retail sales growth in the range of flat to 1%. The Company projects food commodity inflation of approximately 2% for the year. The Company projects operating income margin to be approximately 9.3% as a percent of total revenue. The Company expects depreciation expense of between $110 million and $115 million; net interest expense of approximately $17 million; and capital expenditures of approximately $160 million to $170 million. The Company anticipates an effective tax rate for fiscal 2019 of between 17% and 18%. The Company projects earnings per diluted share for fiscal 2019 of between $8.95 and $9.10 compared to adjusted earnings per diluted share of $8.87 in fiscal 2018.