Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) Q2 2023 Earnings Call Transcript

Andrew Wolf: Thank you. Good morning. I wanted to start with the labor system where you’ve mentioned it’s beginning to roll out or it is being rolled out to about half the chain by now. So how is — could you just give us an update how it is doing versus sort of like achieving the milestones, let’s say, in getting to the KPIs that you’ve targeted. And as I understand it, it’s a lot of it has to do with matching work with guest traffic and so on. So is this something where ultimately it’s a labor productivity metric that you could either share with us or we could try to figure out on our own?

Sandy Cochran: Yes. Good morning, Andrew, so let me start that. First of all, we’ve got our new, we call it here PCM labor. In about 300 stores now, just ruled about the last 150, and we are continued to be pleased with the results. As you said, the system does a variety of things, but it primarily helps matching the specific labor that a store needs with the sales they anticipate sort of by category. So catering sales have different labor demands than dine-in, which is different than individual off-premise and it helps the stores match labor to the specific time of day and type of business that they’re trying to do, gives them better visibility to their sales, it just allows them to better match. It also has a benefit for the employee experience.

The system is cloud-based and comes with an app. So employees are able to access the system and do a variety of things that helps them. So it has this benefit to the employee experience. I think in general, we believe it will allow us to better manage our labor. I would imagine it will help us improve productivity, but I don’t anticipate, Craig, giving specific guest per labor hour productivity metrics on that one component. There’s a lot of other things in our labor line, management labor over a whole lot of other components that roll up to the guidance.

Craig Pommells: Yes, I think, Andrew, in the $25 million cost save, we’ve got, I think it’s about 40% coming out of cost of sales, and I think we’ve got about 40% coming out of labor. And this is a component of that labor component.

Andrew Wolf: Okay. Appreciate that color. The other question I wanted to ask you is if I heard right, I think the younger cohort visits or sales were about flat year-on-year. And I know that is a strategic target to increase penetration. Can you kind of give us a — is it kind of seasonality because you’re selling more of other stuff, like the catering-related items in Thanksgiving and Christmas? Or is it — do you think some of the marketing programs or product programs are kind of just sort of in a phase where there you need to be — you’re waiting for the loyalty program, for example? Is it just sort of a timing issue?

Jennifer Tate: Andrew, it’s Jen. I think for Q2 specifically, we were unchanged with our younger cohorts. But as we look back over several quarters, we have seen sort of steady, modest improvement with those younger cohorts. So I think this was just a quarter where we didn’t see gains but we did see some modest improvement with our older guests in this particular quarter. I can’t say whether that was seasonality or most likely that piece, the older guests returning was due to the wrapping of the Omicron wave. So we were pleased to see, obviously, some of our older guests coming back and we do believe a significant portion of those will continue to return. It’s just hard to say how many win. And we have been working to diversify our guest base, and we are pleased with the progress we’ve seen in increasing frequency with the younger guests.