Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
|
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(Address of principal executive offices)
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(Zip code)
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Rights to Purchase Series A Junior Participating
Preferred Stock (Par Value $0.01)
|
|
(Nasdaq Global Select Market)
|
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Accelerated filer ☐
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Non-accelerated filer ☐
|
Smaller reporting company
|
Emerging growth company
|
PART I. FINANCIAL INFORMATION
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Page
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3
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3
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4
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5
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6
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8 | |
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9 | |
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18
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30 | |
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31
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31 | |
31 | |
31 |
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32
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33
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ASSETS
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April 29,
2022
|
July 30,
2021*
|
||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Accounts receivable
|
|
|
||||||
Income taxes receivable
|
|
|
||||||
Inventories
|
|
|
||||||
Prepaid expenses and other current assets
|
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|
||||||
Total current assets
|
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|
||||||
Property and equipment
|
|
|
||||||
Less: Accumulated depreciation and amortization
|
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|
||||||
Property and equipment – net
|
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|
||||||
Operating lease right-of-use assets, net
|
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|
||||||
Goodwill
|
|
|
||||||
Intangible assets
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Dividends payable | ||||||||
Other current liabilities
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Long-term debt
|
|
|
||||||
Long-term operating lease liabilities
|
|
|
||||||
Other long-term obligations
|
|
|
||||||
Commitments and Contingencies (Note 10)
|
||||||||
Shareholders’ Equity:
|
||||||||
Preferred stock –
|
|
|
||||||
Common stock –
|
|
|
||||||
Retained earnings
|
|
|
||||||
Total shareholders’ equity
|
|
|
||||||
Total liabilities and shareholders’ equity
|
$
|
|
$
|
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Total revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Cost of goods sold (exclusive of depreciation and rent)
|
|
|
|
|
||||||||||||
Labor and other related expenses
|
|
|
|
|
||||||||||||
Other store operating expenses
|
|
|
|
|
||||||||||||
General and administrative expenses
|
|
|
|
|
||||||||||||
Gain on sale and leaseback transaction
|
|
|
|
(
|
)
|
|||||||||||
Operating income
|
|
|
|
|
||||||||||||
Interest expense, net
|
|
|
|
|
||||||||||||
Income before income taxes
|
|
|
|
|
||||||||||||
Provision for income taxes
|
|
|
|
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net income per share:
|
||||||||||||||||
Basic
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Weighted average shares:
|
||||||||||||||||
Basic
|
|
|
|
|
||||||||||||
Diluted
|
|
|
|
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Other comprehensive income before income tax expense:
|
||||||||||||||||
Change in fair value of interest rate swaps
|
|
|
|
|
||||||||||||
Income tax expense
|
|
|
|
|
||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
||||||||||||
Comprehensive income
|
$
|
|
$
|
|
$
|
|
$
|
|
For the Nine Month Period Ended April 29, 2022
|
||||||||||||||||||||||||
Common Stock
|
Additional
Paid-In
|
Accumulated
Other
Comprehensive
|
Retained
|
Total
Shareholders’
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Loss
|
Earnings
|
Equity
|
|||||||||||||||||||
Balances at July 30, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
—
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
|
|
|
|
|
||||||||||||||||||
Total comprehensive income
|
—
|
|
|
|
|
|
||||||||||||||||||
Cash dividends declared - $
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Share-based compensation
|
—
|
|
|
|
|
|
||||||||||||||||||
Cumulative-effect of change in accounting principle, net of taxes (see Note 1) |
— | ( |
) | ( |
) | |||||||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Balances at October 29, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
—
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
|
|
|
|
|
||||||||||||||||||
Total comprehensive income
|
—
|
|
|
|
|
|
||||||||||||||||||
Cash dividends declared - $
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Share-based compensation
|
—
|
|
|
|
|
|
||||||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Purchases and retirement of common stock | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Balances at January 28, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
—
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
|
|
|
|
|
||||||||||||||||||
Total comprehensive income
|
—
|
|
|
|
|
|
||||||||||||||||||
Cash dividends declared - $
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Share-based compensation
|
—
|
|
|
|
|
|
||||||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
|
|
|
|
|
|
||||||||||||||||||
Purchases and retirement of common stock | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Balances at April 29,
2022
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
For the Nine Month Period Ended April 30, 2021
|
||||||||||||||||||||||||
Common Stock
|
Additional
Paid-In
|
Accumulated
Other
Comprehensive
|
Retained
|
Total
Shareholders’
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Income (Loss)
|
Earnings
|
Equity
|
|||||||||||||||||||
Balances at July 31, 2020
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
—
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
|
|
|
|
|
||||||||||||||||||
Total comprehensive income
|
—
|
|
|
|
|
|
||||||||||||||||||
Cash dividends previously declared in prior quarters
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Share-based compensation
|
—
|
|
|
|
|
|
||||||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||||||||
Balances at October 30, 2020
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
—
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
|
|
|
|
|
||||||||||||||||||
Total comprehensive income
|
—
|
|
|
|
|
|
||||||||||||||||||
Cash dividends previously declared in prior quarters
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Share-based compensation
|
—
|
|
|
|
|
|
||||||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Balances at January 29, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
—
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
|
|
|
|
|
||||||||||||||||||
Total comprehensive income
|
—
|
|
|
|
|
|
||||||||||||||||||
Cash dividends previously declared in prior quarters
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Share-based compensation
|
—
|
|
|
|
|
|
||||||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Balances at April 30,
2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
Nine Months Ended
|
||||||||
April 29,
2022
|
April 30,
2021
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Amortization of debt issuance costs
|
||||||||
Loss on disposition of property and equipment
|
|
|
||||||
Gain on sale and leaseback transaction
|
|
(
|
)
|
|||||
Share-based compensation
|
|
|
||||||
Noncash lease expense
|
|
|
||||||
Amortization of asset recognized from gain on sale and leaseback transactions
|
|
|
||||||
Changes in assets and liabilities:
|
||||||||
Inventories
|
(
|
)
|
|
|||||
Other current assets
|
(
|
)
|
(
|
)
|
||||
Accounts payable
|
(
|
)
|
|
|||||
Other current liabilities
|
|
|
||||||
Deferred income taxes
|
(
|
)
|
|
|||||
Long-term operating lease liabilities
|
( |
) | ( |
) | ||||
Other long-term assets and liabilities
|
(
|
)
|
|
|||||
Net cash provided by operating activities
|
|
|
||||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
||||
Proceeds from insurance recoveries of property and equipment
|
|
|
||||||
Proceeds from sale of property and equipment
|
|
|
||||||
Acquisition of business, net of cash acquired
|
(
|
)
|
(
|
)
|
||||
Net cash provided by (used in) investing activities
|
(
|
)
|
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of long-term debt |
||||||||
Taxes withheld from issuance of share-based compensation awards
|
(
|
)
|
(
|
)
|
||||
Principal payments under long-term debt | ( |
) | ( |
) | ||||
Purchases and retirement of common stock |
( |
) | ||||||
Deferred financing costs |
( |
) | ||||||
Dividends on common stock
|
(
|
)
|
(
|
)
|
||||
Net cash used in financing activities
|
(
|
)
|
(
|
)
|
||||
Net decrease in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
Cash and cash equivalents, beginning of period
|
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest, net of amounts capitalized
|
$
|
|
$
|
|
||||
Income taxes
|
$
|
|
$
|
|
||||
Supplemental schedule of non-cash investing and financing activities*:
|
||||||||
Capital expenditures accrued in accounts payable
|
$
|
|
$
|
|
||||
Change in fair value of interest rate swaps
|
$
|
|
$
|
|
||||
Change in deferred tax asset for interest rate swaps
|
$
|
|
$
|
(
|
)
|
|||
Dividends declared but not yet paid
|
$
|
|
$
|
|
1. |
Condensed Consolidated Financial Statements
|
2. |
Fair Value Measurements
|
Level 1
|
Level 2
|
Level 3
|
Total Fair
Value
|
|||||||||||||
Cash equivalents*
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Deferred compensation plan assets**
|
|
|||||||||||||||
Total assets at fair value
|
$
|
|
Level 1
|
Level 2
|
Level 3
|
Total Fair
Value
|
|||||||||||||
Cash equivalents*
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Deferred compensation plan assets**
|
|
|||||||||||||||
Total assets at fair value
|
$
|
|
3. |
Inventories
|
April 29, 2022
|
July 30, 2021
|
|||||||
Retail
|
$
|
|
$
|
|
||||
Restaurant
|
|
|
||||||
Supplies
|
|
|
||||||
Total
|
$
|
|
$
|
|
4. |
Debt
|
April 29, 2022
|
||||
Liability component
|
||||
Principal
|
$ | |||
Less: Debt issuance costs (1)
|
|
|||
Net carrying amount
|
$
|
|
(1)
|
|
|
Quarter Ended
April 29, 2022
|
Nine Months Ended
April 29, 2022
|
||||||
Coupon interest
|
$
|
|
$
|
|
||||
Amortization of issuance costs
|
|
|
||||||
Total interest expense
|
$
|
|
$
|
|
5. |
Seasonality
|
6. |
Segment Information
|
7. |
Revenue Recognition
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Revenue:
|
||||||||||||||||
Restaurant
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Retail
|
|
|
|
|
||||||||||||
Total revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
8. |
Leases
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
|
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
||||||||||||
Operating lease cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Short term lease cost
|
|
|
|
|
||||||||||||
Variable lease cost
|
|
|
|
|
||||||||||||
Total lease cost
|
$
|
|
$
|
|
$
|
|
$
|
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021 |
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Operating cash flow information:
|
||||||||||||||||
Gain on sale and leaseback transaction
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||||
Operating cash flow information:
|
||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
|
|
||||||||||||
Noncash information:
|
||||||||||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities
|
|
|
|
|
||||||||||||
Lease modifications or reassessments increasing or decreasing right-of-use assets
|
|
|
|
|
||||||||||||
Lease modifications removing right-of-use assets
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
April 29, 2022
|
April 30, 2021
|
|||||||
Weighted-average remaining lease term
|
|
|
||||||
Weighted-average discount rate
|
|
%
|
|
%
|
Year
|
Total
|
|||
Remainder of 2022
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
Thereafter
|
|
|||
Total future minimum lease payments
|
|
|||
Less imputed remaining interest
|
(
|
)
|
||
Total present value of operating lease liabilities
|
$
|
|
9. |
Net Income Per Share and Weighted Average Shares
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Net income per share numerator
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net income per share denominator:
|
||||||||||||||||
Weighted average shares
|
|
|
|
|
||||||||||||
Add potential dilution:
|
||||||||||||||||
Nonvested stock awards and units
|
|
|
|
|
||||||||||||
Diluted weighted average shares
|
|
|
|
|
10. |
Commitments and Contingencies
|
ITEM 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
Comparable store restaurant sales increase/(decrease): To calculate comparable store restaurant sales increase/(decrease), we determine total restaurant sales of stores open at least six full quarters before the beginning of the
applicable period, measured on comparable calendar weeks. We then subtract total comparable store restaurant sales for the current year period from total comparable store restaurant sales for the applicable historical period to calculate
the absolute dollar change. To calculate comparable store restaurant sales increase/(decrease), which we express as a percentage, we divide the absolute dollar change by the comparable store restaurant sales for the historical period.
|
• |
Comparable store average restaurant sales: To calculate comparable store average restaurant sales, we determine total restaurant sales of stores open at least six full quarters before the beginning of the applicable period,
measured on comparable calendar weeks, and divide by the number of comparable stores for the applicable period.
|
• |
Comparable store retail sales increase/(decrease): To calculate comparable store retail sales increase/(decrease), we determine total retail sales of stores open at least six full quarters before the beginning of the applicable
period, measured on comparable calendar weeks. We then subtract total comparable store retail sales for the current year period from total comparable store retail sales for the applicable historical period to calculate the absolute dollar
change. To calculate comparable store retail sales increase/(decrease), which we express as a percentage, we divide the absolute dollar change by the comparable store retail sales for the historical period.
|
• |
Comparable store retail average weekly sales: To calculate comparable store average retail sales, we determine total retail sales of stores open at least six full quarters before the beginning of the applicable period, measured on
comparable calendar weeks, and divide by the number of comparable stores for the applicable period.
|
• |
Comparable restaurant guest traffic increase/(decrease): To calculate comparable restaurant guest traffic increase/(decrease), we determine the number of entrees sold in our dine-in and off-premise business from stores open at
least six full quarters at the beginning of the applicable period, measured on comparable calendar weeks. We then subtract total entrees sold for the current year period from total entrees sold for the applicable historical period to
calculate the absolute numerical change. To calculate comparable restaurant guest traffic increase/(decrease), which we express as a percentage, we divide the absolute numerical change by the total entrees sold for the historical period.
|
• |
Average check increase per guest: To calculate average check per guest, we determine comparable store restaurant sales, as described above, and divide by comparable guest traffic (as described above). We then subtract average
check per guest for the current year period from average check per guest for the applicable historical period to calculate the absolute dollar change. The absolute dollar change is divided by the prior year average check number to calculate
average check increase per guest, which we express as a percentage.
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Total revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||||
Cost of goods sold (exclusive of depreciation and rent)
|
31.6
|
28.8
|
31.9
|
30.9
|
||||||||||||
Labor and other related expenses
|
35.9
|
35.1
|
35.1
|
35.1
|
||||||||||||
Other store operating expenses
|
23.6
|
23.5
|
23.0
|
24.3
|
||||||||||||
General and administrative expenses
|
5.0
|
5.2
|
5.1
|
5.5
|
||||||||||||
Gain on sale and leaseback transaction
|
—
|
—
|
—
|
(10.7
|
)
|
|||||||||||
Operating income
|
3.9
|
7.4
|
4.9
|
14.9
|
||||||||||||
Interest expense, net
|
0.3
|
1.4
|
0.3
|
1.5
|
||||||||||||
Income before income taxes
|
3.6
|
6.0
|
4.6
|
13.4
|
||||||||||||
Provision for income taxes
|
0.1
|
1.3
|
0.6
|
2.7
|
||||||||||||
Net income
|
3.5
|
%
|
4.7
|
%
|
4.0
|
%
|
10.7
|
%
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Net change in units:
|
||||||||||||||||
Company-owned – Cracker Barrel
|
—
|
1
|
—
|
2
|
||||||||||||
Company-owned – MSBC
|
3
|
1
|
4
|
2
|
||||||||||||
Franchise - MSBC
|
—
|
—
|
—
|
1
|
||||||||||||
Units in operation at end of the period:
|
||||||||||||||||
Company-owned – Cracker Barrel
|
664
|
664
|
664
|
664
|
||||||||||||
Company-owned – MSBC
|
41
|
37
|
41
|
37
|
||||||||||||
Total Company-owned units at end of the period
|
705
|
701
|
705
|
701
|
||||||||||||
Franchise – MSBC
|
7
|
7
|
7
|
7
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Revenue in dollars:
|
||||||||||||||||
Restaurant
|
$
|
632,210
|
$
|
569,402
|
$
|
1,903,704
|
$
|
1,605,869
|
||||||||
Retail
|
157,986
|
144,014
|
533,682
|
431,170
|
||||||||||||
Total revenue
|
$
|
790,196
|
$
|
713,416
|
$
|
2,437,386
|
$
|
2,037,039
|
||||||||
Total revenue by percentage relationships:
|
||||||||||||||||
Restaurant
|
80.0
|
%
|
79.8
|
%
|
78.1
|
%
|
78.8
|
%
|
||||||||
Retail
|
20.0
|
%
|
20.2
|
%
|
21.9
|
%
|
21.2
|
%
|
||||||||
Average unit volumes(1):
|
||||||||||||||||
Restaurant
|
$
|
933.8
|
$
|
842.5
|
$
|
2,814.6
|
$
|
2,380.1
|
||||||||
Retail
|
237.8
|
216.8
|
803.1
|
649.9
|
||||||||||||
Total revenue
|
$
|
1,171.6
|
$
|
1,059.3
|
$
|
3,617.7
|
$
|
3,030.0
|
||||||||
Comparable store sales increase (decrease) (2):
|
||||||||||||||||
Restaurant
|
10.9
|
%
|
56.5
|
%
|
18.4
|
%
|
(2.6
|
%)
|
||||||||
Retail
|
9.7
|
%
|
102.8
|
%
|
23.9
|
%
|
8.4
|
%
|
||||||||
Restaurant and retail
|
10.7
|
%
|
64.2
|
%
|
19.6
|
%
|
(0.4
|
%)
|
||||||||
Average check increase
|
6.2
|
%
|
5.7
|
%
|
6.7
|
%
|
2.8
|
%
|
||||||||
Comparable restaurant guest traffic increase (decrease)(2):
|
4.7
|
%
|
50.8
|
%
|
11.7
|
%
|
(5.4
|
%)
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Cost of Goods Sold in dollars:
|
||||||||||||||||
Restaurant
|
$
|
175,937
|
$
|
138,481
|
$
|
515,905
|
$
|
411,563
|
||||||||
Retail
|
74,111
|
66,898
|
260,555
|
217,944
|
||||||||||||
Total Cost of Goods Sold
|
$
|
250,048
|
$
|
205,379
|
$
|
776,460
|
$
|
629,507
|
||||||||
Cost of Goods Sold by percentage of revenue:
|
||||||||||||||||
Restaurant
|
27.8
|
%
|
24.3
|
%
|
27.1
|
%
|
25.6
|
%
|
||||||||
Retail
|
46.9
|
%
|
46.5
|
%
|
48.8
|
%
|
50.5
|
%
|
Third Quarter
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Provision for obsolete inventory
|
1.0
|
%
|
||
Inventory shrinkage
|
0.6
|
%
|
||
Freight expense
|
0.6
|
%
|
||
Markdowns
|
(1.5
|
%)
|
||
Higher initial margin
|
(0.3
|
%)
|
First Nine Months
(Decrease) Increase as a
Percentage of Total Revenue
|
||||
Markdowns
|
(2.2
|
%)
|
||
Provision for obsolete inventory
|
0.5
|
%
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Labor and related expenses
|
35.9
|
%
|
35.1
|
%
|
35.1
|
%
|
35.1
|
%
|
Third Quarter
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Store hourly labor
|
1.6
|
%
|
||
Store bonus expense
|
(0.8
|
%)
|
First Nine Months
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Store hourly labor
|
0.9
|
%
|
||
Store management compensation
|
(0.5
|
%)
|
||
Store bonus expense
|
(0.5
|
%)
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Other store operating expenses
|
23.6
|
%
|
23.5
|
%
|
23.0
|
%
|
24.3
|
%
|
Third Quarter
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Maintenance expense
|
0.4
|
%
|
||
Supplies expense
|
0.2
|
%
|
||
Depreciation expense
|
(0.5
|
%)
|
First Nine Months
(Decrease) Increase as a
Percentage of Total Revenue
|
||||
Depreciation expense
|
(0.8
|
%)
|
||
Rent expense
|
(0.4
|
%)
|
||
Advertising expense
|
(0.3
|
%)
|
||
Utilities expense
|
(0.2
|
%)
|
||
Maintenance expense
|
0.2
|
%
|
||
Other store expenses
|
0.2
|
%
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
General and administrative expenses
|
5.0
|
%
|
5.2
|
%
|
5.1
|
%
|
5.5
|
%
|
Third Quarter
(Decrease) Increase as a
Percentage of Total Revenue
|
||||
Incentive compensation expense
|
(0.8
|
%)
|
||
Payroll and related expense
|
0.3
|
%
|
||
Travel expense
|
0.3
|
%
|
First Nine Months
Decrease as a Percentage
of Total Revenue
|
||||
Proxy expenses
|
(0.2
|
%)
|
||
Incentive compensation expense
|
(0.2
|
%)
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Interest expense
|
$
|
2,171
|
$
|
9,614
|
$
|
7,000
|
$
|
31,144
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
April 29,
2022
|
April 30,
2021
|
April 29,
2022
|
April 30,
2021
|
|||||||||||||
Effective tax rate
|
2.7
|
%
|
21.9
|
%
|
12.8
|
%
|
20.0
|
%
|
• |
management believes are most important to the accurate portrayal of both our financial condition and operating results, and
|
• |
require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
|
• |
Impairment of Long-Lived Assets
|
• |
Insurance Reserves
|
• |
Retail Inventory Valuation
|
• |
Lease Accounting
|
ITEM 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 4. |
Controls and Procedures
|
ITEM 1A. |
Risk Factors
|
ITEM 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number
of Shares
Purchased
|
Average Price
Paid Per
Share (1)
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
Maximum Number of
Shares (or Approximate
Dollar Value) that May
Yet Be Purchased
Under the Plans or
Programs
|
|||||||||
1/29/22 – 2/25/22
|
—
|
$
|
—
|
—
|
Indeterminate (2)
|
||||||||
2/26/22 – 3/25/22
|
219,653
|
$
|
117.30
|
219,653
|
Indeterminate (2)
|
||||||||
3/26/22 – 4/29/22
|
94,660
|
$
|
114.33
|
94,660
|
Indeterminate (2)
|
||||||||
Total for the quarter
|
314,313
|
$
|
116.41
|
314,313
|
Indeterminate (2)
|
(1) |
Average price paid per share is calculated on a settlement basis.
|
(2) |
On September 15, 2021, our Board of Directors approved the repurchase of up to $100,000 of our common stock, with such authorization to expire on October 7, 2022, to the extent it remains unused. On June 2, 2022, our Board of Directors
approved the repurchase of up to $200,000 of our common stock with such authorization to expire on June 2, 2023 to the extent any portion remains unused. This authorization was effective immediately and replaced the previous $100,000 share
repurchase authorization. Repurchases are subject to prevailing market prices, may be made in open market or private transactions and may occur or be discontinued at any time. There can be no assurance that we will repurchase any shares.
|
• |
Expressly authorize shareholder meetings conducted solely or in part by means of electronic communication (i.e., virtual meetings) and specify further the procedural and other powers of our Board of Directors and the chairperson of a shareholder meeting over the conduct of such meeting; and
|
• |
Update the procedural and informational requirements for shareholders to submit director nominations and shareholder proposals to be put before our shareholders
at a meeting.
|
ITEM 6. |
Exhibits
|
INDEX TO EXHIBITS
|
|
Exhibit
|
|
Amended and Restated Charter of Cracker Barrel Old Country Store, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on April 10, 2012
(Commission File No. 001-25225)
|
|
Second Amended and Restated Bylaws of Cracker Barrel Old Country Store, Inc. (filed herewith)
|
|
Amendment No. 1 to Employment Agreement, dated as of February 24, 2022, by and between Sandra B. Cochran and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form
10-Q filed under the Exchange Act on February 24, 2022). †
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
CRACKER BARREL OLD COUNTRY STORE, INC.
|
||
Date: June 7, 2022
|
By:
|
/s/Craig A. Pommells
|
Craig A. Pommells, Senior Vice President and Chief Financial
|
||
Officer
|
||
Date: June 7, 2022
|
By:
|
/s/Kara S. Jacobs
|
Kara S. Jacobs, Vice President, Corporate Controller and Principal Accounting Officer
|
(i) |
was a shareholder of record (and, with respect to any beneficial owner, if such person is different from the shareholder of record, on whose behalf such nominations of persons for
election to the Board of Directors or other business is proposed, only if such beneficial owner was the beneficial owner of shares of the Corporation) (such shareholder, the “Noticing Shareholder”) both at the time of giving the notice
provided for in this Section 6.7 and at the time of the meeting,
|
(ii) |
is entitled to vote at the meeting, and
|
(iii) |
has complied with the notice procedures set forth in these bylaws.
|
(i) |
in the case of an annual meeting of shareholders, not earlier than the 5:00 p.m. Central Time on the one hundred twentieth (120th) day and not later than 5:00 p.m. Central Time on
the ninetieth (90th) day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such
anniversary date, notice by the Noticing Shareholder, to be timely, must be so delivered or mailed and received not earlier than 5:00 p.m. Central Time on the one hundred twentieth (120th) day prior to the date of such annual meeting and
not later than 5:00 p.m. Central Time on the later of the ninetieth (90th) day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than one hundred (100) days prior to the
date of such annual meeting, the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation.
|
(ii) |
in the case of a special meeting of shareholders called by or at the direction of the Board of Directors or an authorized committee thereof at which directors are to be elected, in
which case such Noticing Shareholder’s notice shall be limited to nominations, not earlier than 5:00 p.m. Central Time on the one hundred twentieth (120th) day prior to such special meeting and not later than 5:00 p.m. Central Time on the
later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made,
whichever first occurs, and
|
(iii) |
in the case of a special meeting of shareholders called pursuant to Section 6.2 following receipt of a valid written request from the holders of at least twenty percent (20%) of
all votes entitled to be cast on any issue to be considered at such special meeting, not later than the day on which such written demand is delivered to the Secretary.
|
(i) |
set forth, as to the Noticing Shareholder and any Shareholder Associated Person thereof, and, if the Noticing Shareholder or such Shareholder Associated Person holds for the
benefit of another, the beneficial owner on whose behalf the nomination or proposal is made, the following information together with a representation as to the accuracy of the information:
|
(A) |
the name(s) and address(es) of the Noticing Shareholder and any Shareholder Associated Person as they appear on the Corporation’s books and, if the Noticing Shareholder or any such
Shareholder Associate Person holds for the benefit of another, the name and address of such beneficial owner (collectively “Holder”),
|
(B) |
the class or series and number of shares of the Corporation that are, directly or indirectly, owned beneficially and/or of record by such Holder, and the date such ownership was
acquired,
|
(C) |
any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price
related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to
settlement in the underlying class or series of capital stock of the Corporation or otherwise (a “Derivative Instrument”) that is directly or indirectly owned beneficially by the Holder and any other direct or indirect opportunity to profit
or share in any profit derived from any increase or decrease in the value of shares of the Corporation,
|
(D) |
any proxy, contract, arrangement, understanding, or relationship pursuant to which the Holder has a right to vote or has granted a right to vote any shares of any security of the
Corporation,
|
(E) |
any short interest in any security of the Corporation (for purposes of these bylaws, a person shall be deemed to have a short interest in a security if the Holder directly or
indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security),
|
(F) |
any rights to dividends on the shares of the Corporation owned beneficially by the Holder that are separated or separable from the underlying shares of the Corporation,
|
(G) |
any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership or limited liability company or
similar entity in which the Holder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, is the manager, managing member or, directly or indirectly, beneficially owns an interest in the manager
or managing member of a limited liability company or similar entity,
|
(H) |
any performance-related fees (other than an asset-based fee) that the Holder is entitled to based on any increase or decrease in the value of shares of the Corporation or
Derivative Instruments, if any,
|
(I) |
any arrangements, rights, or other interests described in Sections 6.8.B(i)(C)-(H) held by members of such Holder’s immediate family sharing the same household,
|
(J) |
a representation that the Noticing Shareholder intends to appear in person or by proxy at the meeting to nominate the person(s) named or propose the business specified in the
notice,
|
(K) |
a representation that the Noticing Shareholder intends to solicit proxies in support of director nominees other than the Corporation’s director nominees in accordance with Rule
14a-19 promulgated under the Exchange Act, and, if such Shareholder proposes other business, whether or not such shareholder intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the
Corporation’s outstanding shares required to approve the business proposed and/or otherwise to solicit proxies from shareholders in support of the business proposed,
|
(L) |
a certification regarding whether or not the Holder has complied with all applicable federal, state and other legal requirements in connection with such Holder’s acquisition or
ownership of shares or other securities of the Corporation,
|
(M) |
any other information relating to the Holder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of
proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations thereunder, and
|
(N) |
any other information as reasonably requested by the Corporation.
|
(ii) |
if the notice relates to any business other than a nomination of a director or directors that the shareholder proposes to bring before the meeting, set forth:
|
(A) |
a brief description of the business desired to be brought before the meeting (including the text of any resolutions proposed for consideration), the reasons for conducting such
business at the meeting, and any material direct or indirect interest of the Holder in such business, and
|
(B) |
a description of all agreements, arrangements and understandings, direct and indirect, between the Holder, and any other person or persons (including their names) in connection
with the proposal of such business by the Holder.
|
(iii) |
set forth, as to each person, if any, whom the Holder proposes to nominate for election or reelection to the Board of Directors:
|
(A) |
all information relating to the nominee (including, without limitation, the nominee’s name, age, business and residence address and principal occupation or employment and the class
or series and number of shares of capital stock of the Corporation that are owned beneficially or of record by the nominee) that would be required to be disclosed in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations thereunder (including such person’s written consent to being named in the proxy statement as
a nominee and to serving as a director if elected),
|
(B) |
a description of any agreements, arrangements and understandings, direct or indirect, between or among such Holder, on the one hand, and any other persons (including any
Shareholder Associated Person), on the other hand, in connection with the nomination of such person for election as a director,
|
(C) |
a description of all direct and indirect compensation and other material monetary agreements, arrangements, and understandings during the past three (3) years, and any other
material relationships, between or among the Holder and his, her or its affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or
others acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the Holder making the nomination or on whose behalf the
nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of Item 404 and the nominee were a director or executive officer of such registrant,
|
(D) |
the class and number of shares of the Corporation that are held of record or are beneficially owned by the nominee and any derivative positions held or beneficially held by the
nominee,
|
(E) |
the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of the nominee with respect to any securities of the
Corporation, and a description of any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares), the effect or intent of which is to mitigate loss to, or to manage the risk or benefit
of share price changes for, or to increase or decrease the voting power of the nominee, and
|
(F) |
any other information relating to the nominee that would be required to be disclosed about such nominee if proxies were being solicited for the election of the nominee as a
director, or that is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act.
|
(iv) |
with respect to each nominee for election or reelection to the Board of Directors, include a completed and signed questionnaire, representation, and agreement required by Section
6.9.
|
(i) |
any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how the person, if elected as a director of the
Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation, or
|
(ii) |
any Voting Commitment that could limit or interfere with the person’s ability to comply, if elected as a director of the Corporation, with the person’s fiduciary duties under
applicable law,
|
(i) |
the Corporation’s then existing charter and all amendments currently in effect;
|
(ii) |
the Corporation’s then existing bylaws and all amendments currently in effect;
|
(iii) |
resolutions adopted by the Board of Directors creating one (1) or more classes or series of shares, and fixing their relative rights, preferences, and limitations, if shares issued
pursuant to those resolutions are outstanding;
|
(iv) |
the minutes of all shareholders’ meetings and records of all action taken by shareholders without a meeting, if any, for the past three (3) years;
|
(v) |
all written communications to shareholders generally within the past three (3) years, including certain financial statements prepared for the past three (3) years;
|
(vi) |
a list of the names and business addresses of the current directors and officers; and
|
(vii) |
the most recent annual report delivered to the Tennessee Secretary of State.
|
EXHIBIT 31.1 | CERTIFICATION |
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Cracker Barrel Old Country Store, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
EXHIBIT 31.2 | CERTIFICATION |
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Cracker Barrel Old Country Store, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
|
Date: June 7, 2022
|
By:
|
/s/Sandra B. Cochran
|
Sandra B. Cochran
|
||
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
|
Date: June 7, 2022
|
By:
|
/s/Craig A. Pommells
|
Craig A. Pommells
|
||
Senior Vice President and Chief Financial Officer
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Apr. 29, 2022 |
Jul. 30, 2021 |
---|---|---|
Shareholders' Equity: | ||
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 22,912,320 | 23,497,166 |
Common stock, shares outstanding (in shares) | 22,912,320 | 23,497,166 |
Series A Junior Participating Preferred Stock [Member] | ||
Shareholders' Equity: | ||
Preferred stock, shares authorized (in shares) | 300,000 | 300,000 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 29, 2022 |
Apr. 30, 2021 |
Apr. 29, 2022 |
Apr. 30, 2021 |
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME [Abstract] | ||||
Total revenue | $ 790,196 | $ 713,416 | $ 2,437,386 | $ 2,037,039 |
Cost of goods sold (exclusive of depreciation and rent) | 250,048 | 205,379 | 776,460 | 629,507 |
Labor and other related expenses | 283,664 | 250,368 | 854,647 | 714,418 |
Other store operating expenses | 185,870 | 167,823 | 561,715 | 495,968 |
General and administrative expenses | 40,160 | 37,356 | 124,533 | 110,877 |
Gain on sale and leaseback transaction | 0 | 0 | 0 | (217,722) |
Operating income | 30,454 | 52,490 | 120,031 | 303,991 |
Interest expense, net | 2,171 | 9,614 | 7,000 | 31,144 |
Income before income taxes | 28,283 | 42,876 | 113,031 | 272,847 |
Provision for income taxes | 767 | 9,406 | 14,515 | 54,697 |
Net income | $ 27,516 | $ 33,470 | $ 98,516 | $ 218,150 |
Net income per share: | ||||
Basic (in dollars per share) | $ 1.19 | $ 1.41 | $ 4.22 | $ 9.20 |
Diluted (in dollars per share) | $ 1.19 | $ 1.41 | $ 4.21 | $ 9.17 |
Weighted average shares: | ||||
Basic (in shares) | 23,089,521 | 23,725,185 | 23,330,093 | 23,718,777 |
Diluted (in shares) | 23,170,900 | 23,807,410 | 23,409,118 | 23,788,005 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 29, 2022 |
Apr. 30, 2021 |
Apr. 29, 2022 |
Apr. 30, 2021 |
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||||
Net income | $ 27,516 | $ 33,470 | $ 98,516 | $ 218,150 |
Other comprehensive income before income tax expense: | ||||
Change in fair value of interest rate swaps | 0 | 3,941 | 0 | 8,827 |
Income tax expense | 0 | 983 | 0 | 2,202 |
Other comprehensive income, net of tax | 0 | 2,958 | 0 | 6,625 |
Comprehensive income | $ 27,516 | $ 36,428 | $ 98,516 | $ 224,775 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands |
Common Stock [Member] |
Additional Paid-In Capital [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Retained Earnings [Member] |
Total |
Cumulative-Effect of Change in Accounting Principle, Net of Taxes (See Note 1) [Member]
Common Stock [Member]
|
Cumulative-Effect of Change in Accounting Principle, Net of Taxes (See Note 1) [Member]
Additional Paid-In Capital [Member]
|
Cumulative-Effect of Change in Accounting Principle, Net of Taxes (See Note 1) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
|
Cumulative-Effect of Change in Accounting Principle, Net of Taxes (See Note 1) [Member]
Retained Earnings [Member]
|
Cumulative-Effect of Change in Accounting Principle, Net of Taxes (See Note 1) [Member] |
|||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balances at Jul. 31, 2020 | $ 237 | $ 0 | $ (20,346) | $ 438,498 | $ 418,389 | ||||||||
Balances (in shares) at Jul. 31, 2020 | 23,697,396 | ||||||||||||
Comprehensive Income: | |||||||||||||
Net income | $ 0 | 0 | 0 | 170,680 | 170,680 | ||||||||
Other comprehensive income, net of tax | 0 | 0 | 2,601 | 0 | 2,601 | ||||||||
Comprehensive income | 0 | 0 | 2,601 | 170,680 | 173,281 | ||||||||
Cash dividends declared | 0 | 0 | 0 | (40) | (40) | ||||||||
Share-based compensation | 0 | 1,974 | 0 | 0 | 1,974 | ||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes | $ 0 | (1,974) | 0 | (18) | (1,992) | ||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes (in shares) | 22,928 | ||||||||||||
Balances at Oct. 30, 2020 | $ 237 | 0 | (17,745) | 609,120 | 591,612 | ||||||||
Balances (in shares) at Oct. 30, 2020 | 23,720,324 | ||||||||||||
Balances at Jul. 31, 2020 | $ 237 | 0 | (20,346) | 438,498 | 418,389 | ||||||||
Balances (in shares) at Jul. 31, 2020 | 23,697,396 | ||||||||||||
Comprehensive Income: | |||||||||||||
Net income | 218,150 | ||||||||||||
Other comprehensive income, net of tax | 6,625 | ||||||||||||
Comprehensive income | 224,775 | ||||||||||||
Balances at Apr. 30, 2021 | $ 237 | 5,061 | (13,721) | 656,536 | 648,113 | ||||||||
Balances (in shares) at Apr. 30, 2021 | 23,726,372 | ||||||||||||
Balances at Oct. 30, 2020 | $ 237 | 0 | (17,745) | 609,120 | 591,612 | ||||||||
Balances (in shares) at Oct. 30, 2020 | 23,720,324 | ||||||||||||
Comprehensive Income: | |||||||||||||
Net income | $ 0 | 0 | 0 | 14,000 | 14,000 | ||||||||
Other comprehensive income, net of tax | 0 | 0 | 1,066 | 0 | 1,066 | ||||||||
Comprehensive income | 0 | 0 | 1,066 | 14,000 | 15,066 | ||||||||
Cash dividends declared | 0 | 0 | 0 | (52) | (52) | ||||||||
Share-based compensation | 0 | 1,992 | 0 | 0 | 1,992 | ||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes | $ 0 | (25) | 0 | 18 | (7) | ||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes (in shares) | 4,088 | ||||||||||||
Balances at Jan. 29, 2021 | $ 237 | 1,967 | (16,679) | 623,086 | 608,611 | ||||||||
Balances (in shares) at Jan. 29, 2021 | 23,724,412 | ||||||||||||
Comprehensive Income: | |||||||||||||
Net income | $ 0 | 0 | 0 | 33,470 | 33,470 | ||||||||
Other comprehensive income, net of tax | 0 | 0 | 2,958 | 0 | 2,958 | ||||||||
Comprehensive income | 0 | 0 | 2,958 | 33,470 | 36,428 | ||||||||
Cash dividends declared | 0 | 0 | 0 | (20) | (20) | ||||||||
Share-based compensation | 0 | 3,222 | 0 | 0 | 3,222 | ||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes | $ 0 | (128) | 0 | 0 | (128) | ||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes (in shares) | 1,960 | ||||||||||||
Balances at Apr. 30, 2021 | $ 237 | 5,061 | (13,721) | 656,536 | 648,113 | ||||||||
Balances (in shares) at Apr. 30, 2021 | 23,726,372 | ||||||||||||
Balances at Jul. 30, 2021 | $ 235 | 0 | 0 | 663,398 | $ 663,633 | [1] | |||||||
Balances (in shares) at Jul. 30, 2021 | 23,497,166 | 23,497,166 | |||||||||||
Comprehensive Income: | |||||||||||||
Net income | $ 0 | 0 | 0 | 33,376 | $ 33,376 | ||||||||
Other comprehensive income, net of tax | 0 | 0 | 0 | 0 | 0 | ||||||||
Comprehensive income | 0 | 0 | 0 | 33,376 | 33,376 | ||||||||
Cash dividends declared | 0 | 0 | 0 | (30,838) | (30,838) | ||||||||
Share-based compensation | 0 | 2,309 | 0 | 0 | 2,309 | ||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes | $ 0 | (2,309) | 0 | 0 | (2,309) | ||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes (in shares) | 22,691 | ||||||||||||
Balances at Oct. 29, 2021 | $ 235 | 0 | 0 | 628,980 | 629,215 | $ 0 | $ 0 | $ 0 | $ (36,956) | $ (36,956) | |||
Balances (in shares) at Oct. 29, 2021 | 23,519,857 | ||||||||||||
Balances at Jul. 30, 2021 | $ 235 | 0 | 0 | 663,398 | $ 663,633 | [1] | |||||||
Balances (in shares) at Jul. 30, 2021 | 23,497,166 | 23,497,166 | |||||||||||
Comprehensive Income: | |||||||||||||
Net income | $ 98,516 | ||||||||||||
Other comprehensive income, net of tax | 0 | ||||||||||||
Comprehensive income | 98,516 | ||||||||||||
Balances at Apr. 29, 2022 | $ 229 | 0 | 0 | 564,000 | $ 564,229 | ||||||||
Balances (in shares) at Apr. 29, 2022 | 22,912,320 | 22,912,320 | |||||||||||
Balances at Oct. 29, 2021 | $ 235 | 0 | 0 | 628,980 | $ 629,215 | $ 0 | $ 0 | $ 0 | $ (36,956) | $ (36,956) | |||
Balances (in shares) at Oct. 29, 2021 | 23,519,857 | ||||||||||||
Comprehensive Income: | |||||||||||||
Net income | $ 0 | 0 | 0 | 37,624 | 37,624 | ||||||||
Other comprehensive income, net of tax | 0 | 0 | 0 | 0 | 0 | ||||||||
Comprehensive income | 0 | 0 | 0 | 37,624 | 37,624 | ||||||||
Cash dividends declared | 0 | 0 | 0 | (30,471) | (30,471) | ||||||||
Share-based compensation | 0 | 2,203 | 0 | 0 | 2,203 | ||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes | $ 0 | (237) | 0 | 0 | (237) | ||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes (in shares) | 8,339 | ||||||||||||
Purchases and retirement of common stock | $ (3) | (1,966) | 0 | (32,261) | (34,230) | ||||||||
Purchases and retirement of common stock (in shares) | (279,664) | ||||||||||||
Balances at Jan. 28, 2022 | $ 232 | 0 | 0 | 603,872 | 604,104 | ||||||||
Balances (in shares) at Jan. 28, 2022 | 23,248,532 | ||||||||||||
Comprehensive Income: | |||||||||||||
Net income | $ 0 | 0 | 0 | 27,516 | 27,516 | ||||||||
Other comprehensive income, net of tax | 0 | 0 | 0 | 0 | 0 | ||||||||
Comprehensive income | 0 | 0 | 0 | 27,516 | 27,516 | ||||||||
Cash dividends declared | 0 | 0 | 0 | (30,110) | (30,110) | ||||||||
Share-based compensation | 0 | 1,906 | 0 | 0 | 1,906 | ||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes | $ 0 | 0 | 0 | 0 | 0 | ||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes (in shares) | 0 | ||||||||||||
Purchases and retirement of common stock | $ (3) | (1,906) | 0 | (37,278) | (39,187) | ||||||||
Purchases and retirement of common stock (in shares) | (336,212) | ||||||||||||
Balances at Apr. 29, 2022 | $ 229 | $ 0 | $ 0 | $ 564,000 | $ 564,229 | ||||||||
Balances (in shares) at Apr. 29, 2022 | 22,912,320 | 22,912,320 | |||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares |
3 Months Ended | ||
---|---|---|---|
Apr. 29, 2022 |
Jan. 28, 2022 |
Oct. 29, 2021 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY [Abstract] | |||
Cash dividends declared (in dollars per share) | $ 1.30 | $ 1.30 | $ 1.30 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Apr. 29, 2022 |
Apr. 30, 2021 |
|||
Cash flows from operating activities: | ||||
Net income | $ 98,516 | $ 218,150 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 77,288 | 80,932 | ||
Amortization of debt issuance costs | 1,326 | 0 | ||
Loss on disposition of property and equipment | 4,140 | 2,669 | ||
Gain on sale and leaseback transaction | 0 | (217,722) | ||
Share-based compensation | 6,418 | 7,188 | ||
Noncash lease expense | 43,646 | 41,601 | ||
Amortization of asset recognized from gain on sale and leaseback transactions | 9,551 | 9,551 | ||
Changes in assets and liabilities: | ||||
Inventories | (54,040) | 6,709 | ||
Other current assets | (5,073) | (9,896) | ||
Accounts payable | (9,740) | 10,161 | ||
Other current liabilities | 5,690 | 24,164 | ||
Deferred income taxes | (7,564) | 70,581 | ||
Long-term operating lease liabilities | (44,495) | (46,202) | ||
Other long-term assets and liabilities | (19,307) | 14,651 | ||
Net cash provided by operating activities | 106,356 | 212,537 | ||
Cash flows from investing activities: | ||||
Purchase of property and equipment | (59,982) | (45,135) | ||
Proceeds from insurance recoveries of property and equipment | 1,175 | 1,020 | ||
Proceeds from sale of property and equipment | 44 | 149,910 | ||
Acquisition of business, net of cash acquired | (1,500) | (1,500) | ||
Net cash provided by (used in) investing activities | (60,263) | 104,295 | ||
Cash flows from financing activities: | ||||
Proceeds from issuance of long-term debt | 45,000 | 60,000 | ||
Taxes withheld from issuance of share-based compensation awards | (2,546) | (2,127) | ||
Principal payments under long-term debt | (50,049) | (395,049) | ||
Purchases and retirement of common stock | (73,417) | 0 | ||
Deferred financing costs | 0 | (420) | ||
Dividends on common stock | (84,901) | (31,645) | ||
Net cash used in financing activities | (165,913) | (369,241) | ||
Net decrease in cash and cash equivalents | (119,820) | (52,409) | ||
Cash and cash equivalents, beginning of period | 144,593 | 436,996 | ||
Cash and cash equivalents, end of period | 24,773 | 384,587 | ||
Cash paid during the period for: | ||||
Interest, net of amounts capitalized | 5,399 | 30,522 | ||
Income taxes | 20,261 | 1,435 | ||
Supplemental schedule of non-cash investing and financing activities: | ||||
Capital expenditures accrued in accounts payable | [1] | 4,006 | 3,497 | |
Change in fair value of interest rate swaps | [1] | 0 | 8,827 | |
Change in deferred tax asset for interest rate swaps | [1] | 0 | (2,202) | |
Dividends declared but not yet paid | [1] | $ 30,668 | $ 525 | |
|
Condensed Consolidated Financial Statements |
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Apr. 29, 2022 | |||
Condensed Consolidated Financial Statements [Abstract] | |||
Condensed Consolidated Financial Statements |
Cracker Barrel Old Country Store, Inc. and its affiliates (collectively, in these Notes to Condensed Consolidated Financial Statements, the “Company”)
are principally engaged in the operation and development in the United States of the Cracker Barrel Old Country Store® (“Cracker Barrel”) concept.
The accompanying condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally
accepted in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) without audit. In the opinion of management, all adjustments (consisting of normal and recurring items) necessary
for a fair presentation of such condensed consolidated financial statements have been made. The results of operations for any interim period are not necessarily indicative of results for a full year.
These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto
contained in the Company’s Annual Report on Form 10-K for the year ended July 30, 2021 (the “2021 Form 10-K”). The accounting policies used in preparing these condensed consolidated financial statements are the same as described in the 2021 Form
10-K. References to a year in these Notes to Condensed Consolidated Financial Statements are to the Company’s fiscal year unless otherwise noted.
COVID-19 Impact
The Company continues to recover from the COVID-19 pandemic, and all dining rooms were open to some extent during the first nine months of 2022. While most of our dining rooms are
currently operating with few, if any, restrictions, it is possible that renewed outbreaks, increases in cases and/or new variants of the disease, either as part of a national trend or on a more localized basis, could result in COVID-19-related
restrictions including capacity restrictions or otherwise limit our dine-in services, or negatively affect consumer demand.
In response to the COVID-19 pandemic, we instituted operational protocols to comply
with applicable regulatory requirements to protect the health and safety of employees and guests, and we implemented and continually adapted a number of strategies to support the recovery of our business and navigate through the uncertain
environment. We continue to focus on growing our off-premise business and investing in our digital infrastructure to improve the guest experience in the face of these ongoing challenges.
Recent Accounting Pronouncements Adopted
Accounting for Convertible Instruments
In August 2020, the Financial Accounting Standards Board (“FASB”) issued accounting guidance to simplify the accounting and measurement of convertible instruments and the settlement
assessment for contracts in an entity’s own equity. For convertible instruments, the Board decided to reduce the number of accounting models for convertible debt instruments and convertible preferred stock. By removing the separation model, a
convertible debt instrument will be reported as a single liability instrument with no separate accounting for embedded conversion features. This new standard also removes certain settlement conditions that are required for contracts to qualify for
equity classification and simplifies the diluted earnings per share calculations by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings per share calculations. This
guidance is effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted. This guidance should be applied through either a modified retrospective
method of transition or a fully retrospective method of transition. The Company elected to early adopt this guidance in the first quarter of 2022 using the modified retrospective method. The impact of this adoption in the first quarter of 2022 on the
Condensed Consolidated Balance Sheet resulted in the increase in long-term debt of $49,242, a reduction in deferred income taxes of $12,286 and decrease in equity of $36,956.
The decrease in equity is comprised of a decrease in Retained Earnings of $36,956, which is due to the depletion of Additional Paid-In
Capital as a result of this adoption. There was no impact to earnings per share in the first quarter of 2022 as a result of the adoption.
Accounting for Income Taxes
In December 2019, the FASB issued accounting guidance in order to simplify the accounting for income taxes. This new guidance eliminates certain
exceptions to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of the
accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. This accounting guidance is effective for public business entities for
fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The new guidance was applied on a prospective basis, except for the guidance on franchise taxes that are partially based on income which was applied using
a modified retrospective approach. The adoption of the accounting guidance in the first quarter of 2022 did not have a significant impact on the Company’s consolidated financial position or results of operations.
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Fair Value Measurements |
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Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
The Company’s assets measured at fair value on a recurring basis at April 29, 2022
were as follows:
The Company’s assets measured at fair value on a recurring basis at July 30, 2021
were as follows:
*Consists of money market fund investments.
**Represents plan assets invested in mutual funds
established under a rabbi trust for the Company’s non-qualified savings plan and is included in the Condensed Consolidated Balance Sheets as other assets.
The Company did not have any
liabilities measured at fair value on a recurring basis at April 29, 2022 and July 30, 2021. The Company’s money market fund investments are measured at fair value using quoted market prices. The fair values of the Company’s accounts receivable and
accounts payable approximate their carrying amounts because of their short duration. The fair value of the Company’s variable rate debt, based on quoted market prices, which are considered Level 1 inputs, approximates its carrying amount at April 29,
2022 and July 30, 2021.
The Company’s financial instruments that are not remeasured at fair value include the 0.625% convertible Senior Notes (see Note 4). The Company estimates the fair value of the Notes through consideration of quoted market prices of similar instruments, classified as Level 2. The
estimated fair value of the Notes was $275,133 and $249,233, respectively, as of April 29, 2022 and July 30, 2021.
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Inventories |
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Inventories [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
Inventories were comprised of the following at:
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Debt |
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Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt |
On September 5, 2018, the Company entered into a five-year $950,000 revolving credit facility (“2019 Revolving
Credit Facility”). The 2019 Revolving Credit Facility contains an option to increase the revolving credit facility by $300,000, of which
$260,605 remains. In the third quarter of 2021, the Company entered into an amendment to the 2019 Revolving Credit Facility which reduced
the commitment amount from $950,000 to $800,000.
The Company’s outstanding borrowings under the 2019 Revolving Credit Facility were $80,000 and $85,000 on April 29, 2022 and July 30, 2021,
respectively.
At April 29, 2022, the Company had $31,896 of standby letters of credit, which reduce the Company’s borrowing availability under the 2019 Revolving Credit Facility (see Note 10 for more information on the Company’s standby letters of credit). At
April 29, 2022, the Company had $688,104 in borrowing availability under the 2019 Revolving Credit Facility.
In accordance with the 2019 Revolving Credit Facility, outstanding borrowings bear interest, at the Company’s election, either
at the London Inter-Bank Offered Rate (“LIBOR”) or prime plus a percentage point spread based on certain specified financial ratios under the 2019 Revolving Credit Facility. At April 29, 2022, the weighted average interest rate on the Company’s
outstanding borrowings under the 2019 Revolving Credit Facility was 2.91%.
The 2019 Revolving Credit Facility contains customary financial covenants, which include maintenance of a maximum consolidated
total leverage ratio and a minimum consolidated interest coverage ratio. At April 29, 2022, the Company was in compliance with all debt covenants under the 2019 Revolving Credit Facility.
The 2019 Revolving Credit Facility also imposes restrictions on the amount of dividends the Company is permitted to pay and the
amount of shares the Company is permitted to repurchase. Under the 2019 Revolving Credit Facility, provided there is no default existing and the total of the Company’s availability under the 2019 Revolving Credit Facility plus the Company’s cash
and cash equivalents on hand is at least $100,000 (the “Cash Availability”), the Company may declare and pay cash dividends on shares of
its common stock and repurchase shares of its common stock (1) in an unlimited amount if, at the time such dividend or repurchase is made, the Company’s consolidated total leverage ratio is 3.00 to 1.00 or less and (2) in an aggregate amount not to exceed $100,000
in any fiscal year if the Company’s consolidated total leverage ratio is greater than 3.00 to 1.00 at the time the dividend or
repurchase is made; notwithstanding (1) and (2), so long as immediately after giving effect to the payment of any such dividends, Cash Availability is at least $100,000, the Company may declare and pay cash dividends on shares of its common stock in an aggregate amount not to exceed in any fiscal year the product of the aggregate amount of dividends declared in the fourth
quarter of the immediately preceding fiscal year multiplied by four.
Convertible Senior Notes
On June 18, 2021, the Company completed a $300,000 principal aggregate amount private offering of 0.625% convertible Senior Notes due in 2026
(the “Notes”), which included the exercise in full of the initial purchasers’ option to purchase up to an additional $25,000 principal
amount of the Notes. The Notes are governed by the terms of an indenture between the Company and U.S. Bank National Association as the Trustee. The Notes will mature on June 15, 2026, unless earlier converted, repurchased or redeemed. The Notes bear cash interest at an annual rate of 0.625%,
payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2021.
The Notes are unsecured obligations and do not contain any financial or operating covenants or restrictions on the payments of
dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company or any of its subsidiaries. In an event of default, the principal amount of, and all accrued and unpaid interest on, all of the notes then
outstanding will immediately become due and payable. However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an event of default relating to certain failures by the Company to comply with certain
reporting covenants in the Indenture will consist exclusively of the right of the noteholders to receive special interest on the Notes for up to 180
calendar days during which such event of default has occurred and is continuing, at a specified rate for the first 90 days of 0.25% per
annum, and thereafter at a rate of 0.50% per annum, on the principal amount of the Notes.
The initial conversion rate applicable to the Notes was 5.3153 shares of the Company’s common stock per $1,000 principal
amount of Notes, which represented an initial conversion price of approximately $188.14 per share of the Company’s common stock, a
premium of 25.0% over the last reported sale price of $150.51 per share on June 15, 2021, the date on which the Notes were priced. The conversion rate is subject to customary adjustments upon the occurrence of certain events, including the payment of dividends to
holders of the Company’s common stock. As of April 29, 2022, the conversion rate, as adjusted, was 5.5197 shares of the Company’s common
stock per $1,000 principal amount of Notes. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change”
occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.
Net proceeds from the Notes offering were $291,125, after deducting the initial purchasers’ discounts and commissions and the Company’s offering fees and expenses.
In accounting for the issuance of the Notes as of July 30, 2021, the Company separated the Notes into liability and equity
components. The carrying amount of the liability component before the allocation of any issuance costs was calculated by measuring the fair value of a similar liability that does not have an associated exchangeable feature. The carrying amount of
the equity component (before the allocation of any issuance costs), representing the conversion option, which did not require separate accounting as a derivative as it met a scope exception for certain contracts involving an entity’s own equity,
was determined by deducting the fair value of the liability component from the par value of the Notes. The difference between the principal amount of the Notes and the liability component represented the debt discount, which was recorded as a
direct deduction from the related debt liability in the Condensed Consolidated Balance Sheet and accreted over the period from the date of issuance to the contractual maturity date, resulting in the recognition of non-cash interest expense. The
equity component of the Notes of $53,004 was included in additional paid-in capital in the Condensed Consolidated Balance Sheet as of
July 30, 2021 and was not remeasured since it continued to meet the conditions for equity classification. Issuance costs were allocated to the liability and equity components in the same proportion as the allocation of the proceeds. Issuance costs
attributable to the liability component were recorded as debt issuance costs in the Condensed Consolidated Balance Sheet and are amortized to interest expense using the effective interest method over the term of the Notes, and issuance costs
attributable to the equity component were netted with the equity component in stockholders’ equity.
Due to our adoption of new accounting guidance for convertible instruments on July 31, 2021, the Company no longer bifurcates
the Notes into a liability and an equity component in the Company’s Condensed Consolidated Balance Sheets (see Note 1 for additional information regarding the adoption of this new accounting guidance). Upon adoption of this new accounting guidance,
the Notes are accounted for entirely as a liability, and the issuance costs of the Notes are accounted for wholly as debt issuance costs. The equity conversion feature that was recorded to equity, as well as the unamortized debt discount and
amortization expense attributable to equity, have been derecognized.
The following table includes the outstanding principal amount and carrying value of the Notes as of the period indicated:
The effective rate of the Notes over their expected life is 1.23%. The following is a summary of interest expense for the Notes for the quarter ended and nine months ended April 29, 2022:
During any calendar quarter after September 30, 2021, in which the closing price of the Company’s common stock exceeds 130% of the applicable conversion price of the Notes on at least 20 of the last 30 consecutive trading days of the quarter, holders may in the quarter immediately
following, convert all or a portion of their Notes. The holders of the Notes were not eligible to convert their Notes during the first nine months of 2022. When a conversion notice is received, the Company has the option to pay or deliver the
conversion amount entirely in cash or a combination of cash and shares of the Company’s common stock. Accordingly, as of April 29, 2022, the Company could not be required to settle the Notes and, therefore, the Notes are classified as long-term
debt.
Convertible Note Hedge and Warrant Transactions
In connection with the offering of the Notes, the Company entered into convertible note hedge transactions (the “Convertible
Note Hedge Transactions”) with certain of the initial purchasers of the Notes and/or their respective affiliates and other financial institutions (in this capacity, the “Hedge Counterparties”). Concurrently with the Company’s entry into the
Convertible Note Hedge Transactions, the Company also entered into separate, warrant transactions with the Hedge Counterparties collectively relating to the same number of shares of the Company’s common stock, which initially is approximately 1,600,000 shares, subject to customary anti-dilution adjustments, and for which the Company received proceeds that partially offset the cost of entering
into the Convertible Note Hedge Transactions (the “Warrant Transactions”).
The Convertible Note Hedge Transactions cover, subject to customary anti-dilution adjustments, the number of shares of the
Company’s common stock that initially underlie the Notes, and are expected generally to reduce the potential equity dilution, and/or offset any cash payments in excess of the principal amount due, as the case may be, upon conversion of the Notes.
The Warrant Transactions could have a dilutive effect on the Company’s common stock to the extent that the price of its common stock exceeds the strike price of the Warrant Transactions. The strike price was initially $263.39 per share and is subject to certain adjustments under the terms of the Warrant Transactions. As of April 29, 2022, the strike price, as adjusted,
of the Warrant Transactions was $253.64 per share as a result of dividends declared since the Notes were issued.
The portion of the net proceeds to the Company from the offering of the Notes that was used to pay the premium on the
Convertible Note Hedge Transactions, net of the proceeds to the Company from the Warrant Transactions, was approximately $30,310. The net
costs incurred in connection with the Convertible Note Hedge Transactions and Warrant Transactions were recorded as a reduction to additional paid-in capital on the Company’s Condensed Consolidated Balance Sheet during 2021.
As these transactions meet certain accounting criteria, the Convertible Note Hedge Transactions and Warrant Transactions were
recorded in stockholders’ equity, not accounted for as derivatives and are not remeasured each reporting period.
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Seasonality |
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Apr. 29, 2022 | |||
Seasonality [Abstract] | |||
Seasonality |
Historically, the net income of the Company has been lower in the first and third quarters and higher in the second and fourth quarters. Management
attributes these variations to the holiday shopping season and the summer vacation and travel season. The Company’s retail sales, which are made substantially to the Company’s restaurant customers, historically have been highest in the Company’s
second quarter, which includes the holiday shopping season. Historically, interstate tourist traffic and the propensity to dine out have been higher during the summer months, thereby contributing to higher profits in the Company’s fourth quarter.
The Company generally opens additional new locations throughout the year. Therefore, the results of operations for any interim period cannot be considered indicative of the operating results for an entire year. Currently, the Company is not able to predict the impact that the COVID-19 pandemic may have on these historical consumer demand patterns or, as a result, on the seasonality of its business generally.
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Segment Information |
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Apr. 29, 2022 | |||
Segment Information [Abstract] | |||
Segment Information |
Cracker Barrel stores represent a single, integrated operation with two related and substantially integrated product lines. The operating expenses of the restaurant and retail product lines of a Cracker Barrel store are shared and are indistinguishable in many respects.
Accordingly, the Company currently manages its business on the basis of one reportable operating segment. All of the Company’s operations
are located within the United States.
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Revenue Recognition |
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Revenue Recognition |
Revenue consists primarily of sales from restaurant and retail operations. The Company recognizes revenue when it satisfies a performance obligation
by transferring control over a product or service to a restaurant guest, retail customer or other customer. The Company’s policy is to present sales in the Condensed Consolidated Statements of Income on a net presentation basis after deducting sales
tax.
Disaggregation of revenue
Total revenue was comprised of the following for the specified periods:
Restaurant Revenue
The Company recognizes revenues from restaurant sales when payment is tendered at the point of sale, as the Company’s performance obligation to
provide food and beverages is satisfied.
Retail Revenue
The Company recognizes revenues from retail sales when payment is tendered at the point of sale, as the Company’s performance obligation to provide
merchandise is satisfied. Ecommerce sales, including shipping revenue, are recorded upon delivery to the customer. Additionally, estimated sales returns are calculated based on return history and sales levels.
Gift Card Breakage
Included in restaurant and retail revenue is gift card breakage. Customer purchases of
gift cards, to be utilized at the Company’s stores, are not recognized as sales until the card is redeemed and the customer purchases food and/or merchandise. Gift cards do not carry an expiration date; therefore, customers can redeem their gift
cards indefinitely. A certain number of gift cards will not be fully redeemed. Management estimates unredeemed balances and recognizes gift card breakage revenue for these amounts in the Company’s Condensed Consolidated Statements of Income over
the expected redemption period. Gift card breakage is recognized when the likelihood of a gift card being redeemed by the customer is remote, and the Company determines that there is not a legal obligation to remit the unredeemed gift card
balance to the relevant jurisdiction.
The determination of the gift card breakage rate is based upon the Company’s specific historical redemption patterns. The Company recognizes gift card
breakage by applying its estimate of the rate of gift card breakage over the period of estimated redemption. For the quarter and nine months ended April 29, 2022, gift card breakage was $1,514 and $4,783, respectively. For the quarter and nine months
ended April 30, 2021, gift card breakage was $1,247 and $3,940, respectively.
Deferred revenue related to the Company’s gift cards was $102,390 and $93,098, respectively, at April 29, 2022 and
July 30, 2021. Revenue recognized in the Condensed Consolidated Statements of Income for the nine months ended April 29, 2022 and April 30, 2021, respectively, for the redemption of gift cards which were included in the deferred revenue balance at the beginning of the fiscal year
was $36,420 and $35,157.
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Leases |
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Leases |
The Company has ground leases for its leased stores and office space leases that are recorded as operating leases under various non-cancellable
operating leases. The Company also leases advertising billboards, vehicle fleets, and certain equipment under various non-cancellable operating leases. Additionally, the Company completed sale-leaseback transactions in 2009, 2020 and 2021 (see
section below entitled “Sale and Leaseback Transactions”). To determine whether a contract is or contains a lease, the Company determines at contract inception whether it contains the right to control the use of an identified asset for a period
of time in exchange for consideration. If the contract has the right to obtain substantially all of the economic benefit from use of the identified asset and the right to direct the use of the identified asset, the Company recognizes a
right-of-use asset and lease liability.
The Company’s leases all have varying terms and expire at various dates through 2055. Restaurant leases typically have base terms of ten years with four to five optional renewal periods of five years
each. The Company uses a lease life that generally begins on the commencement date, including the rent holiday periods, and generally extends through certain renewal periods that can be exercised at the Company’s option. During rent holiday
periods, which include the pre-opening period during construction, the Company has possession of and access to the property, but is not obligated to, and normally does not, make rent payments. The Company has included lease
renewal options in the lease term for calculations of the right-of-use asset and liability for which at the commencement of the lease it is reasonably certain that the Company will exercise those renewal options. Additionally, some of the leases
have contingent rent provisions and others require adjustments for inflation or index. Contingent rent is determined as a percentage of gross sales in excess of specified levels. The
Company records a contingent rent liability and corresponding rent expense when it is probable sales have been achieved in amounts in excess of the specified levels. The Company’s lease agreements do not contain any material residual
value guarantees or material restrictive covenants.
The Company has entered into agreements for real estate leases that are not recorded as right-of-use assets or lease liabilities as we have not
yet taken possession. These leases are expected to commence in 2022 and 2023 with undiscounted future payments of $1,086 and $22,559, respectively.
The Company has elected not to separate lease and non-lease components. Additionally, the Company has elected to apply the short term lease
exemption to all asset classes and the short term lease expense for the period reasonably reflects the short term lease commitments. As the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on
the information available at the time of commencement or modification date in determining the present value of lease payments. For operating leases that commenced prior to the date of adoption of the new lease accounting guidance, the Company
used the incremental borrowing rate as of the adoption date. Assumptions used in determining the Company’s incremental borrowing rate include the Company’s implied credit rating and an estimate of secured borrowing rates based on comparable
market data.
The following table summarizes the components of lease cost for operating leases for the quarter ended and nine months ended April 29, 2022 as compared to the same periods in the prior year:
The following table summarizes supplemental cash flow information and non-cash activity related to the Company’s operating leases for the quarter
ended and nine months ended April 29, 2022 as compared to the same periods in the prior year:
The following table summarizes the weighted-average remaining lease term and the weighted-average discount rate for operating leases as of April 29, 2022 and April 30, 2021:
The following table summarizes the maturities of undiscounted cash flows reconciled to the total operating lease liability as of April 29, 2022:
Sale and Leaseback Transactions
In 2009, the Company completed sale-leaseback transactions involving 15 of its owned stores and its retail distribution center. Under the transactions, the land, buildings and improvements at the locations were sold and leased back for terms of 20 and 15 years, respectively. Equipment
was not included. The leases include specified renewal options for up to 20 additional years.
On July 29, 2020, the Company entered into an agreement with the original lessor and a third party financier to obtain ownership of 64 of the 65 Cracker Barrel properties
previously covered in the original sale and leaseback arrangement and simultaneously entered into a sale and leaseback transaction with the financier for an aggregate purchase price, net of closing costs, of $198,083. The Company purchased the remaining property for approximately $3,200. In connection with this sale and leaseback transaction, the Company entered into lease agreements for each of the properties for initial terms of 20 years and renewal options up to 50
years. The aggregate initial annual rent payment for the properties is approximately $14,379 and includes 1% annual rent increases over the initial lease terms. All the properties qualified for sale and leaseback and operating lease accounting classification
and the Company recorded a gain on the sale and leaseback transaction of $69,954 in the fourth quarter of 2020. The Company recorded
operating lease right-of-use assets, including a non-cash asset recognized as a part of accounting for the transaction of $79,049, and
corresponding operating lease liabilities of $261,698 and $182,649, respectively.
On August 4, 2020, the Company completed a subsequent sale and leaseback transaction involving 62 of its owned Cracker Barrel stores for an aggregate purchase price, net of closing costs, of $146,357. Under the transaction, the land, buildings and building improvements at the locations were sold and leased back for initial terms of 20 years and renewal options up to 50 years. The aggregate
initial annual rent payment for the properties is approximately $10,393 and includes 1% annual rent increases over the initial lease terms. All of the properties qualified for sale and leaseback and operating lease accounting classification, and the Company
recorded a gain of $217,722 which is recorded in the gain on sale and leaseback transaction line in the Condensed Consolidated
Statement of Income in the first quarter of 2021. The Company also recorded operating lease right-of-use assets, including a non-cash asset recognized as part of accounting for the transaction of $175,960, and corresponding operating lease liabilities of $309,624
and $133,663, respectively.
|
Net Income Per Share and Weighted Average Shares |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 29, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share and Weighted Average Shares [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share and Weighted Average Shares |
Basic consolidated net income per share is computed by dividing consolidated net income
available to common shareholders by the weighted average number of shares of common stock outstanding for the reporting period. Diluted consolidated net income per share reflects the potential dilution that could occur if securities, options or
other contracts to issue shares of common stock were exercised or converted into shares of common stock and is based upon the weighted average number of shares of common stock and common equivalent shares outstanding during the reporting period.
Common equivalent shares related to nonvested stock awards and units issued by the Company are calculated using the treasury stock method. The outstanding nonvested stock awards and units issued by the Company represent the only dilutive effects on
diluted consolidated net income per share. The Company’s convertible senior notes and related warrants are calculated using the net share settlement option under the if converted method. Because the principal amount of the convertible senior notes will be settled in cash with any
excess conversion value settled in cash or shares of common stock, the convertible senior notes have been excluded from the computation of diluted earnings per share because the average market price of the Company’s common stock during the
reporting period did not exceed the conversion price of $181.17 as of April 29, 2022. Warrants were excluded from the computation of
diluted earnings per share since the warrants’ strike price of $253.64 was greater than the average market price of the Company’s common
stock during the period. See Note 4 for additional information regarding the Company’s convertible senior notes.
The following table reconciles the components of diluted earnings per share computations:
|
Commitments and Contingencies |
9 Months Ended | ||
---|---|---|---|
Apr. 29, 2022 | |||
Commitments and Contingencies [Abstract] | |||
Commitments and Contingencies |
The Company and its subsidiaries are party to various legal and regulatory proceedings and claims incidental to their business in the ordinary
course. In the opinion of management, based upon information currently available, the ultimate liability with respect to these contingencies will not materially affect the Company’s financial statements.
Related to its insurance coverage, the Company is contingently liable pursuant to standby letters of credit as credit guarantees to certain insurers.
As of April 29, 2022, the Company had $31,896 of standby letters of credit related to securing reserved claims under workers’ compensation
insurance and the July 29, 2020 and August 4, 2020 sale and leaseback transactions. All standby letters of credit are renewable annually and reduce the Company’s borrowing
availability under its 2019 Revolving Credit Facility (see Note 4).
The Company enters into certain indemnification agreements in favor of third parties in the ordinary course of business. The Company believes that
the probability of incurring an actual liability under such indemnification agreements is sufficiently remote that no such liability has been recorded in the Condensed Consolidated Balance Sheet as of April 29, 2022.
|
Condensed Consolidated Financial Statements (Policies) |
9 Months Ended |
---|---|
Apr. 29, 2022 | |
Condensed Consolidated Financial Statements [Abstract] | |
Recent Accounting Pronouncements Adopted |
Recent Accounting Pronouncements Adopted
Accounting for Convertible Instruments
In August 2020, the Financial Accounting Standards Board (“FASB”) issued accounting guidance to simplify the accounting and measurement of convertible instruments and the settlement
assessment for contracts in an entity’s own equity. For convertible instruments, the Board decided to reduce the number of accounting models for convertible debt instruments and convertible preferred stock. By removing the separation model, a
convertible debt instrument will be reported as a single liability instrument with no separate accounting for embedded conversion features. This new standard also removes certain settlement conditions that are required for contracts to qualify for
equity classification and simplifies the diluted earnings per share calculations by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings per share calculations. This
guidance is effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted. This guidance should be applied through either a modified retrospective
method of transition or a fully retrospective method of transition. The Company elected to early adopt this guidance in the first quarter of 2022 using the modified retrospective method. The impact of this adoption in the first quarter of 2022 on the
Condensed Consolidated Balance Sheet resulted in the increase in long-term debt of $49,242, a reduction in deferred income taxes of $12,286 and decrease in equity of $36,956.
The decrease in equity is comprised of a decrease in Retained Earnings of $36,956, which is due to the depletion of Additional Paid-In
Capital as a result of this adoption. There was no impact to earnings per share in the first quarter of 2022 as a result of the adoption.
Accounting for Income Taxes
In December 2019, the FASB issued accounting guidance in order to simplify the accounting for income taxes. This new guidance eliminates certain
exceptions to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of the
accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. This accounting guidance is effective for public business entities for
fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The new guidance was applied on a prospective basis, except for the guidance on franchise taxes that are partially based on income which was applied using
a modified retrospective approach. The adoption of the accounting guidance in the first quarter of 2022 did not have a significant impact on the Company’s consolidated financial position or results of operations.
|
Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 29, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis |
The Company’s assets measured at fair value on a recurring basis at April 29, 2022
were as follows:
The Company’s assets measured at fair value on a recurring basis at July 30, 2021
were as follows:
*Consists of money market fund investments.
**Represents plan assets invested in mutual funds
established under a rabbi trust for the Company’s non-qualified savings plan and is included in the Condensed Consolidated Balance Sheets as other assets.
|
Inventories (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 29, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Inventories [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
Inventories were comprised of the following at:
|
Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 29, 2022 | |||||||||||||||||||||||||||||||||||||
Debt [Abstract] | |||||||||||||||||||||||||||||||||||||
Outstanding Principal Amount and Carrying Value of the Notes |
The following table includes the outstanding principal amount and carrying value of the Notes as of the period indicated:
|
||||||||||||||||||||||||||||||||||||
Summary of Interest Expense |
The effective rate of the Notes over their expected life is 1.23%. The following is a summary of interest expense for the Notes for the quarter ended and nine months ended April 29, 2022:
|
Revenue Recognition (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 29, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue |
Total revenue was comprised of the following for the specified periods:
|
Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 29, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Cost for Operating Leases |
The following table summarizes the components of lease cost for operating leases for the quarter ended and nine months ended April 29, 2022 as compared to the same periods in the prior year:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information and Non-cash Activity Related to Operating Leases |
The following table summarizes supplemental cash flow information and non-cash activity related to the Company’s operating leases for the quarter
ended and nine months ended April 29, 2022 as compared to the same periods in the prior year:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-Average Remaining Lease Term and Weighted-Average Discount Rate for Operating Leases |
The following table summarizes the weighted-average remaining lease term and the weighted-average discount rate for operating leases as of April 29, 2022 and April 30, 2021:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturities of Undiscounted Cash Flows Reconciled to Total Operating Lease Liability |
The following table summarizes the maturities of undiscounted cash flows reconciled to the total operating lease liability as of April 29, 2022:
|
Net Income Per Share and Weighted Average Shares (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 29, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share and Weighted Average Shares [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Components of Diluted Earnings per Share Computations |
The following table reconciles the components of diluted earnings per share computations:
|
Condensed Consolidated Financial Statements (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Oct. 29, 2021 |
Apr. 29, 2022 |
Apr. 30, 2021 |
|
Recent Accounting Pronouncements Adopted [Abstract] | |||
Reduction in deferred income taxes | $ 7,564 | $ (70,581) | |
Accounting Standards Update 2020-06 [Member] | |||
Recent Accounting Pronouncements Adopted [Abstract] | |||
Increase in long-term debt | $ 49,242 | ||
Reduction in deferred income taxes | (12,286) | ||
Decrease in equity | (36,956) | ||
Accounting Standards Update 2020-06 [Member] | Retained Earnings [Member] | |||
Recent Accounting Pronouncements Adopted [Abstract] | |||
Decrease in equity | $ (36,956) |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
Apr. 29, 2022 |
Jul. 30, 2021 |
Jun. 18, 2021 |
||||
---|---|---|---|---|---|---|---|
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Liabilities at fair value | $ 0 | $ 0 | |||||
0.625% Convertible Senior Notes Due 2026 [Member] | |||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Interest rate | 0.625% | 0.625% | |||||
Level 2 [Member] | 0.625% Convertible Senior Notes Due 2026 [Member] | Estimated Fair Value [Member] | |||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Fair value of notes | $ 275,133 | 249,233 | |||||
Recurring [Member] | |||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Cash equivalents | [1] | 1 | 35,001 | ||||
Deferred compensation plan assets | [2] | 30,715 | 32,527 | ||||
Total assets at fair value | 30,716 | 67,528 | |||||
Recurring [Member] | Level 1 [Member] | |||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Cash equivalents | [1] | 1 | 35,001 | ||||
Recurring [Member] | Level 2 [Member] | |||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Cash equivalents | [1] | 0 | 0 | ||||
Recurring [Member] | Level 3 [Member] | |||||||
Assets Liabilities Measured at Fair Value on a Recurring Basis [Abstract] | |||||||
Cash equivalents | [1] | $ 0 | $ 0 | ||||
|
Inventories (Details) - USD ($) $ in Thousands |
Apr. 29, 2022 |
Jul. 30, 2021 |
|||
---|---|---|---|---|---|
Inventories [Abstract] | |||||
Retail | $ 154,298 | $ 104,143 | |||
Restaurant | 24,262 | 21,583 | |||
Supplies | 13,800 | 12,594 | |||
Total | $ 192,360 | $ 138,320 | [1] | ||
|
Debt, Revolving Credit Facility (Details) - 2019 Revolving Credit Facility [Member] $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Apr. 29, 2022
USD ($)
|
Jul. 30, 2021
USD ($)
|
Apr. 30, 2021
USD ($)
|
Sep. 05, 2018
USD ($)
|
|
Line of Credit Facility [Abstract] | ||||
Line of credit facility, term | 5 years | |||
Maximum borrowing capacity | $ 800,000 | $ 950,000 | ||
Option to increase revolving credit facility | 300,000 | |||
Remaining borrowing capacity | $ 688,104 | $ 260,605 | ||
Outstanding borrowings | 80,000 | $ 85,000 | ||
Amount of standby letters of credit | $ 31,896 | |||
Weighted average interest rates | 2.91% | |||
Liquidity requirements | $ 100,000 | |||
Dividends threshold | $ 100,000 | |||
Leverage ratio, maximum | 3.00 | |||
Multiplier used in calculating aggregate amount of cash dividends on shares of common stock in any fiscal year | 4 |
Debt, Convertible Senior Notes (Details) - 0.625% Convertible Senior Notes Due 2026 [Member] - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | ||||
---|---|---|---|---|---|
Jun. 18, 2021 |
Apr. 29, 2022 |
Jun. 15, 2021 |
|||
Convertible Senior Notes [Abstract] | |||||
Interest rate | 0.625% | 0.625% | |||
Maturity date | Jun. 15, 2026 | ||||
Periodic interest payment frequency | semi-annually | ||||
Period of special interest to be received in the event of default | 180 days | ||||
Special interest rate to be received for first 90 days | 0.25% | ||||
Special Interest rate to be received thereafter | 0.50% | ||||
Conversion rate of common stock (in shares) | 5.3153 | 5.5197 | |||
Debt instrument, converted amount | $ 1,000 | $ 1,000 | |||
Conversion price per share (in dollars per share) | $ 188.14 | ||||
Common stock premium percentage | 25.00% | ||||
Sale price per share (in dollars per share) | $ 150.51 | ||||
Net proceeds from notes offering | 291,125 | ||||
Equity component | 53,004 | ||||
Liability component [Abstract] | |||||
Principal | 300,000 | ||||
Less: Debt issuance costs | [1] | 7,331 | |||
Net carrying amount | $ 292,669 | ||||
Maximum [Member] | |||||
Convertible Senior Notes [Abstract] | |||||
Additional principal amount | $ 25,000 | ||||
|
Debt, Summary of Interest Expense (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Apr. 29, 2022
USD ($)
|
Apr. 29, 2022
USD ($)
d
|
Apr. 30, 2021
USD ($)
|
|
Interest Expense [Abstract] | |||
Amortization of issuance costs | $ 1,326 | $ 0 | |
0.625% Convertible Senior Notes Due 2026 [Member] | |||
Interest Expense [Abstract] | |||
Interest rate effective percentage | 1.23% | 1.23% | |
Coupon interest | $ 474 | $ 1,422 | |
Amortization of issuance costs | 415 | 1,326 | |
Total interest expense | $ 889 | $ 2,748 | |
Threshold percentage of stock price trigger | 130.00% | ||
Threshold trading days | d | 20 | ||
Threshold consecutive trading days | d | 30 |
Debt, Convertible Note Hedge and Warrant Transactions (Details) - Convertible Note Hedge Transactions [Member] $ / shares in Units, $ in Thousands |
9 Months Ended |
---|---|
Apr. 29, 2022
USD ($)
$ / shares
shares
| |
Convertible Note Hedge and Warrant Transactions [Abstract] | |
Number of shares of common stock included in Warrant Transactions (in shares) | shares | 1,600,000 |
Strike price (in dollars per share) | $ 263.39 |
Adjusted strike price (in dollars per share) | $ 253.64 |
Portion of net proceeds from offering of Notes used to pay the premium on Convertible Note Hedge Transactions, net of proceeds from Warrant Transactions | $ | $ 30,310 |
Segment Information (Details) |
9 Months Ended |
---|---|
Apr. 29, 2022
Line
Segment
| |
Segment Information [Abstract] | |
Number of product lines | Line | 2 |
Number of reportable operating segments | Segment | 1 |
Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Apr. 29, 2022 |
Apr. 30, 2021 |
Apr. 29, 2022 |
Apr. 30, 2021 |
Jul. 30, 2021 |
|
Disaggregation of Revenue [Abstract] | |||||
Revenue | $ 790,196 | $ 713,416 | $ 2,437,386 | $ 2,037,039 | |
Gift card breakage | 1,514 | 1,247 | 4,783 | 3,940 | |
Deferred revenue related to gift cards | 102,390 | 102,390 | $ 93,098 | ||
Revenue recognized for redemption of gift cards | 36,420 | 35,157 | |||
Restaurant [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Revenue | 632,210 | 569,402 | 1,903,704 | 1,605,869 | |
Retail [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Revenue | $ 157,986 | $ 144,014 | $ 533,682 | $ 431,170 |
Leases, Summary (Details) $ in Thousands |
9 Months Ended |
---|---|
Apr. 29, 2022
USD ($)
Period
| |
Leases [Abstract] | |
Initial lease term | 20 years |
Maximum [Member] | |
Leases [Abstract] | |
Lease renewal option | 50 years |
Restaurant [Member] | |
Leases [Abstract] | |
Initial lease term | 10 years |
Lease renewal option | 5 years |
Undiscounted future payments for leases not yet commenced in 2022 | $ | $ 1,086 |
Undiscounted future payments for leases not yet commenced in 2023 | $ | $ 22,559 |
Restaurant [Member] | Minimum [Member] | |
Leases [Abstract] | |
Number of optional renewal periods | Period | 4 |
Restaurant [Member] | Maximum [Member] | |
Leases [Abstract] | |
Number of optional renewal periods | Period | 5 |
Leases, Components of Lease Cost for Operating Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 29, 2022 |
Apr. 30, 2021 |
Apr. 29, 2022 |
Apr. 30, 2021 |
|
Components of Lease Cost for Operating Leases [Abstract] | ||||
Operating lease cost | $ 27,266 | $ 26,560 | $ 81,408 | $ 79,445 |
Short term lease cost | 99 | 116 | 2,324 | 2,180 |
Variable lease cost | 622 | 477 | 1,852 | 1,671 |
Total lease cost | $ 27,987 | $ 27,153 | $ 85,584 | $ 83,296 |
Leases, Supplemental Cash Flow Information and Non-cash Activity Related to Operating Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Aug. 04, 2020 |
Apr. 29, 2022 |
Apr. 30, 2021 |
Apr. 29, 2022 |
Apr. 30, 2021 |
|
Operating cash flow information [Abstract] | |||||
Gain on sale and leaseback transaction | $ (217,722) | $ 0 | $ 0 | $ 0 | $ (217,722) |
Cash paid for amounts included in the measurement of lease liabilities | 23,219 | 22,279 | 69,080 | 66,960 | |
Noncash information [Abstract] | |||||
Right-of-use assets obtained in exchange for new operating lease liabilities | 2,893 | 267 | 14,550 | 315,456 | |
Lease modifications or reassessments increasing or decreasing right-of-use assets | 4,993 | 3,471 | 11,409 | 28,515 | |
Lease modifications removing right-of-use assets | $ (90) | $ (104) | $ (426) | $ (452) |
Leases, Weighted-Average Remaining Lease Term and Weighted-Average Discount Rate for Operating Leases (Details) |
Apr. 29, 2022 |
Apr. 30, 2021 |
---|---|---|
Weighted-Average Remaining Lease Term and Weighted-Average Discount Rate for Operating Leases [Abstract] | ||
Weighted-average remaining lease term | 17 years 7 months 9 days | 18 years 2 months 26 days |
Weighted-average discount rate | 4.87% | 4.83% |
Leases, Maturities of Undiscounted Cash Flows Reconciled to Total Lease Liability (Details) - USD ($) $ in Thousands |
Apr. 29, 2022 |
Aug. 04, 2020 |
---|---|---|
Maturities of Undiscounted Cash Flows Reconciled to Total Lease Liability [Abstract] | ||
Remainder of 2022 | $ 23,311 | |
2023 | 87,563 | |
2024 | 68,091 | |
2025 | 64,502 | |
2026 | 63,731 | |
Thereafter | 898,650 | |
Total future minimum lease payments | 1,205,848 | |
Less imputed remaining interest | (420,473) | |
Total present value of operating lease liabilities | $ 785,375 | $ 133,663 |
Leases, Sale and Leaseback Transactions (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 04, 2020
USD ($)
Store
|
Jul. 29, 2020
USD ($)
Store
|
Apr. 29, 2022
USD ($)
|
Apr. 30, 2021
USD ($)
|
Apr. 29, 2022
USD ($)
|
Apr. 30, 2021
USD ($)
|
Jul. 31, 2009
Store
|
Jul. 30, 2021
USD ($)
|
[1] | |||
Sale Leaseback Transactions [Abstract] | |||||||||||
Initial lease term | 20 years | 20 years | |||||||||
Aggregate purchase price, net of closing costs | $ 146,357 | ||||||||||
Aggregate initial annual rent payment for lease properties | $ 10,393 | ||||||||||
Percentage of increase in annual rental payments in initial terms | 1.00% | ||||||||||
Gain on sale and leaseback transaction | $ 217,722 | $ 0 | $ 0 | $ 0 | $ 217,722 | ||||||
Right-of-use assets, non-cash | 175,960 | ||||||||||
Operating lease right-of-use assets | 309,624 | 946,813 | 946,813 | $ 974,477 | |||||||
Operating lease liabilities | $ 133,663 | $ 785,375 | $ 785,375 | ||||||||
Maximum [Member] | |||||||||||
Sale Leaseback Transactions [Abstract] | |||||||||||
Lease renewal option | 50 years | 50 years | |||||||||
Owned Stores [Member] | |||||||||||
Sale Leaseback Transactions [Abstract] | |||||||||||
Number of owned stores involved in sale-lease back transactions | Store | 62 | ||||||||||
Aggregate purchase price, net of closing costs | $ 198,083 | ||||||||||
Sale-leaseback Transactions in 2009 [Member] | Owned Stores [Member] | |||||||||||
Sale Leaseback Transactions [Abstract] | |||||||||||
Number of owned stores involved in sale-lease back transactions | Store | 15 | ||||||||||
Initial lease term | 20 years | 20 years | |||||||||
Lease renewal option | 20 years | 20 years | |||||||||
Sale-leaseback Transactions in 2009 [Member] | Retail Distribution Center [Member] | |||||||||||
Sale Leaseback Transactions [Abstract] | |||||||||||
Initial lease term | 15 years | 15 years | |||||||||
Lease renewal option | 20 years | 20 years | |||||||||
Sale-leaseback Transactions in 2000 [Member] | |||||||||||
Sale Leaseback Transactions [Abstract] | |||||||||||
Initial lease term | 20 years | 20 years | |||||||||
Remaining property purchased | $ 3,200 | $ 3,200 | |||||||||
Aggregate initial annual rent payment for lease properties | $ 14,379 | ||||||||||
Percentage of increase in annual rental payments in initial terms | 1.00% | ||||||||||
Gain on sale and leaseback transaction | $ 69,954 | ||||||||||
Right-of-use assets, non-cash | 79,049 | 79,049 | |||||||||
Operating lease right-of-use assets | 261,698 | 261,698 | |||||||||
Operating lease liabilities | $ 182,649 | $ 182,649 | |||||||||
Sale-leaseback Transactions in 2000 [Member] | Maximum [Member] | |||||||||||
Sale Leaseback Transactions [Abstract] | |||||||||||
Lease renewal option | 50 years | 50 years | |||||||||
Sale-leaseback Transactions in 2000 [Member] | Owned Stores [Member] | |||||||||||
Sale Leaseback Transactions [Abstract] | |||||||||||
Number of owned stores involved in sale-lease back transactions | Store | 65 | ||||||||||
Number of stores completed in sale leaseback transaction | Store | 64 | ||||||||||
|
Net Income Per Share and Weighted Average Shares (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Apr. 29, 2022 |
Jan. 28, 2022 |
Oct. 29, 2021 |
Apr. 30, 2021 |
Jan. 29, 2021 |
Oct. 30, 2020 |
Apr. 29, 2022 |
Apr. 30, 2021 |
|
Reconciliation of Components of Diluted Earnings per Share Computations [Abstract] | ||||||||
Net income per share numerator | $ 27,516 | $ 37,624 | $ 33,376 | $ 33,470 | $ 14,000 | $ 170,680 | $ 98,516 | $ 218,150 |
Net income per share denominator [Abstract] | ||||||||
Weighted average shares (in shares) | 23,089,521 | 23,725,185 | 23,330,093 | 23,718,777 | ||||
Add potential dilution [Abstract] | ||||||||
Nonvested stock awards and units (in shares) | 81,379 | 82,225 | 79,025 | 69,228 | ||||
Diluted weighted average shares (in shares) | 23,170,900 | 23,807,410 | 23,409,118 | 23,788,005 | ||||
Convertible Senior Notes [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract] | ||||||||
Conversion price (in dollars per share) | $ 181.17 | $ 181.17 | ||||||
Warrants [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract] | ||||||||
Adjusted strike price (in dollars per share) | $ 253.64 | $ 253.64 |
Commitments and Contingencies (Details) $ in Thousands |
Apr. 29, 2022
USD ($)
|
---|---|
Standby Letters of Credit [Member] | Revolving Credit Facility [Member] | |
Loss Contingencies [Abstract] | |
Letters of credit outstanding | $ 31,896 |
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