The brand’s rising off-premises channels fueled same-store sales, which rose 1.4 percent in Q1 compared to 2019, and that’s coming off a 6.8 percent decline in the fourth quarter. The sales recovery was also driven by improved staffing levels. Recruitment efforts, like Cracker Barrel’s new virtual orientation program, helped the chain hire an average of more than 2,000 employees per week.
Cochran said elevated staffing will prove crucial as the company heads into what’s historically the most active time of year.
“I believe we’ve largely, if not completely, closed the gap in the back of the house, so we’re feeling really good about where we are in grill cooks,” the CEO said. “I think in front of the house, specifically with servers, we’re working hard to hire even more. But we do feel good about where we’re positioned going into the busy season, and we think that those improvements in staffing is certainly a meaningful part of how we’ve been able to achieve the sales recovery that we’ve seen.”
In Q1, Cracker Barrel faced commodity inflation of 7.3 percent, driven by significant increases in pork, beef, and oil, offset by 5.5 pricing and favorability of product mix. Labor costs were pressured by wage inflation of 9.1 percent, offset by sales leverage, lower manager staffing levels, and incentive compensation.
Jennifer Tate, the chain’s senior vice president and chief marketing officer, said that after three and a half months of data, pricing hasn’t negatively impacted traffic or menu mix. Because of this, the chain plans to take another price increase in the third quarter, above its typical range of 3 percent.
“We feel OK about that,” Tate said. “We've always had a really strong equity in the area of everyday value, and we’re still thought of over lots of years of having quality homestyle, scratch-made food at a fair price. We don't do LTO, coupon, dealing. It's everyday value all the time. And so we've still got a lot of great offers every day. Lunch features at $6.99, dinner meal starting at $7.99. So we think we've got plenty of room to take more pricing in Q3.”
For the full fiscal 2022, the chain expects commodity and wage inflation in the high single digits, capital expenditures of $120 million, and the opening of three Cracker Barrel stores and 15 Maple Street Biscuit Company locations.
The company earned total revenue of $784.9 million in Q1, a 21.4 percent lift compared to last year. Net income was $33.4 million, or 4.3 percent of total revenue, and EBITDA was $71.9 million, or 9.2 percent of total revenue.