<p>corrected transcript Barbara A. Gould,RelationsBarbaraA. Investor MANAGEMENT DISCUSSION SECTION carefully. annualquarterlyand we thereports andthat with file urgeSEC we informationyou to read this uncertaintiesfound at the ofend this press morning’s releaseand are in described detailin our of the Many that factors results can affect are summarized cautionarythe in description of risks and information.statementsor expectations.urgecautionWe to our listenersreaders and considering in forward-looking controltheof company the and actualcause may results to management’sdiffer frommaterially statements,forward-looking which and involve risks uncertainties that many in cases are beyond expectationsand as tocompany’s the future operating results. are These whatare knownas press In our releaseand duringthis statements call, bemaymade by management beliefs of their 2010 releasedwas before market the thisopened morning. press Our releaseannouncing fiscal our 2010 resultsquarterfirst and updated our outlook for fiscal you,Christine.Thank Welcome to our 2010 quarter first conference webcastand call this morning. Please Gould. goahead. time At openingthis for introductions,remarks and would likeI turn the to over call to BarbMs. enteringand passcode 8640132. Eastern PM Time throughDecember 8, 2009 at 11:59EasternPM Timeby dialing 719-457-0820 ConferenceToday’sCall.call recordedis being will and beforavailable replay today 2 from o’clock Operator: Good day,and toCracker thewelcome Old Barrel CountryFirstStoreQuarter2010 Mike? then will close.We respond to your questions. ofreviewbusiness, the Sandy reviewthewill and financials outlook,thenand return Mikewill the to Woodhouse; ourand Executive andVice Sandy President CFO, Cochran. beginMikewill a with On with call the this me Crackermorning Barrel’s are Chairman, President CEO,and Mike opens. comparableand store restaurant and sales retail onTuesday, February, 23 before market the releases press in with or filings SEC.plantheto We release 2010 fiscal second earningsquarter we should provideany updates aftertoday, will they be broadmadeonly by dissemination, such as disclaimsThe company anyobligation to disclosedupdate informationontrends guidance,or and disseminateddisclosures,such as this press morning’s releaseand this call. own expressguidanceor continuingcomfortit with as except requiredby andlaw broadly in In addition,any guidance giveonly we speaks as of date the isgivenandit donot we ourupdate alsoWe youremind that don’t we reviewor comment estimateson earnings madeby parties.other </p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Store, Store, Inc. Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q1 Q1 2010 Call Earnings Event Type▲ Event Nov.200924, Date▲ 1 corrected transcript Michael A. Woodhouse, Chairman, PresidentChief A. Chairman, Michael and Officer ExecutiveWoodhouse, being very being cautious on wherewhenand they spending are their disposableincome.we’re Until overall the isimproving,economy anunemployment rate of 10%translates intoconsumers still However, recognize we we that still a have toughroadahead. there Although some are signs that brand. employees66,000 and look we forward to continuingto deliver premiumresults our from premium our executionas becomes even consistentmore and want toI acknowledge daily the byefforts our seen measurableWe’ve a improvement across the However, company. I anticipatefurther progress I tohad chooseIf a fromtheme quarter,first the it’sone I’d beginningsay of just tostride. hit our presentations. focus third isonreinvigorating our sales new retail with product strategies, store layouts visual and waysfinding to the complement and tried truewith favorites number a offerings. of new the And Theappropriate.second area emphasis of hasbeen promotionalonour new menuitems. We’re weekends,rather than trying to ourreinvent concept.We that’sbelieve don’t or necessary foremost, First and been we’ve putting the on better focus executionatperiods, peak meaning ourprograms business,to simplify providea better experience guest improve and profitability. our can accomplishwe going forward. As previously we reported, we’ve beenon working number of a are we While happyour with recent quarterlyresults, I’m more even pleased aboutbelievewhat I that sheet resulted both in &Standard Poor’sMoody’s and raising outlookour credit to stable. also We’re pleased our with business actionsand trends that taken we’ve to strengthen balancethe earnings. combinedquarter the with positivecheckaverage, improving operatingmargin and strongvery share news to pleasedyou.We’re with report to positive comparable store restaurantthe sales for Barb. Thanks, morning, Good everyone.youThank for joining us today. have We lot ofa good that we’re that executingathighest the standardpossible timesat busiest the of week. the Second, to things.three totheFirst, ensure possiblebest experience guest during weekends certainby making the eachwithin four walls of store.Soto sales get growthback we on track, setto out accomplish variety a of negativeexternal We factors. believeat CrackerBarrel our that opportunity lies to grow The recentchallenge in years has been finding in toways generate profitable the growth in offace other make capital-intensive investments to refresh our brand. appealbrand leads to advantage,another significant lackthe of any need ourto redesign stores or heritage,country our retail and shop leading our interstate presence. The enduring thenature of ofOne our advantagescompetitive we’re is that uniqueourtruly in customer appeal with our to successthe of our strategy. last the 19years Restaurants andby Institutionmagazine’s ChoiceChains surveyin istestimonial valuegreatalong a with great experience. guest votedBeing Bestthe Dining Restaurant Family for anaverage With checkof 8.94, highquality and food ample portions, offersclearly Cracker Barrel a earlier. respondentsspendingreporting anaverage of $13.25 meal adoneper studyin similar nine months consumerswho said plantheyto spend anaverage of $11.49 meal per nextyear compared with 2009.Thewas study businessdone by AlixPartners,consultant LLCit and asurveyed 1000 said restaurant customersare planning to spend aboutper20% less meal 2010 in than didthey in Specifictorestaurant the industry, recent a in article Nation’s RestaurantNewsciteda thatstudy more seeing thanjobs created lost, we expectdon’t dramaticto seechangea spending in habits.</p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Store, Store, Inc. Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 2 corrected transcript everybody everybody else. look feelofand CrackerBarrel. don’t We need like to look something should else, or say, I learned valuableWe a lessonthat our guests a have emotionalstrong attachment to original the whenlike while, changed we our putbillboarddesign ofto more anemphasis and on food retail. been sincethere our founding. this to Now, say isn’t we that haven’t offcourseveered a in once the well over isbecause years stayed we’ve true tobrand the trueand to the principles have that I’ve As said aboutmany it’sall the times, brand. believe I Crackerreasonthe hasdone Barrel so typesof discounting. portions or noreductionand in levels. ofservice And course, did we resortnot to couponsor other improved bottom the without line compromising guest the experience. No productchanges in specs atsamewhile the providingtime controltighter of store operating mostcosts.And weimportantly, new toolsOur and systemsmanagement have a longwaygone towards improving execution our tocompared a year ago. loweroperatingexpenses produced that bettersignificantly at themargins store operating level favorable in commodity quarter,firstcosts the wasit combinationthe of positivesales leverage and sayme Let a about profitword margins. weWhile benefited ourtofrom take ability advantageof industrywhere discountinghas become norm.the quarters two by than more percentagethree points. ourAnd check average remains an positivein now outperformedWe’ve Knapp-Trackthe indexin traffic guest for 13pastquarters,the in pastthe index. efforts these canbeclearlyseen our in continuing performance with compared Knapp-Trackthe new billboardsagainonce ahave distinctiveCracker lookfeel. Barrel and The positiveeffects on Iwhile speakingAnd am of advertising, I hope of youthose who travel have will noticed our that increased with radio TVand advertising key in markets. seriesintroduce a ofnew strong product offerings our in promotions, third,and to support brandthe Double ChocolateDouble Fudge CocaCake yearCola all long. are We now our in promotionholiday dessert, toFor celebrate also our 40th anniversary, are we offering popular our and exclusive reintroducedLemon Pepper Trout.Grilled andrange built on successthe ofpineapple the saladthat offer we summer.duringthe also We and Dressing introduced Autumn Applefest Chicken Grilled Salad, broadened which our salad lunchand For we dinner, brought backa favorite guest Autumn ChickenApplefestGrilled n’ tenderloin. Toastalong a with traditionalmore offering of CountryBiscuitsMeatour n’ with fried chicken this users. fall for breakfastNew were for YogurtFresh the n’ Fruit and Apple the FrenchStreusel also we want to expand the ofrange offerings at affordable points stimulate price to newertrial from tie new in to our anniversary. with 40th wantWe our regular guests to visitus frequentlymore and Let’slook recent at our menuadditions. introducedThis we fall whichnew bothitems, were old and musicfromlatest the favorite a artist.country availabilitythe of something new onmenu,the quickly peoplehow are servedbeing or ableto buy accomplished througha combination contributedof that factors to guest satisfaction,whether it’s in scores quarterthe twoincreased percentage points last over year. ofAll this hasbeen evidence to show our that areefforts producing positive boxtop results. Our satisfaction guest to brand,the that’s and ofreasonone the peoplewhy continue theto rate us Thereismore best. There’s something about genuineCrackerBarrel hospitality inspiresstrong that a ofsense loyalty I As mentioned early,don’t we need to the reinvent concept,keythe for isbetter us execution. </p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Store, Store, Inc. Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 3 corrected transcript $20. And $20. these are items specificallynot tiedtothey Christmas, intended are to begiftable atitems whencenteryou first ourenter storesit and that bothoffersitems are fun practical and for all under alsoWe introduced our GreatGift isaprogram. This colorful and displayprominent that’s frontand to potentialreduce seasonal markdowns thereforeand improve margins. feelsChristmas,likeand thebut numberof and themes quantitythe of each islowerin item order If youitems. walkintoa CrackerBarrel unit over month,pastthe you would’ve findthat stillit looks So talknow, let’s about what’s new retail. in we’ve First of all, reduced numbertheof Christmas turnoverannualized the for was quarterfirst 72%for hourly andemployees 19%for management. we At Cracker Barrel, pridetake in continued our ability to and attract retain people.greatOur labor. our are we working on something onan new, working effectivemore wayeven to schedule deployand hasbeen effective.very And verywe’re while resultspleased the with asmany with things, other periodpeak demand the and times weekendexecution of this we initiative outthat rolled 2009 in order in totime provide possiblebest the This service. canbechallenging, especially challengingat all make difference.theOur goalisalways tothe have people in right rightthe placeat right the The huge part of guest the experiencerelatestoservice table the and experiencedemployees that plantothe complete overeffort 18months out it rolling region-by-region on a basis. process. flow begun toWe’ve rollthis out initiative,we at thestarted beginningof October weand entering order,the reduces and cooktimes theimproves in toability kitchen controlthe the order increaseand Theprogram productivity. reduces numbertheof steps seatingfrom attable the to a few Next onquickerwords guest service. to EatThe Seat toolto initiative drive is a trafficmore forand severaldessert varieties of fresh-baked pies topped vanilla cream.with ice promotional theinclude items Breakfast Sampler,Holiday popular always the RoastBeef Dinner Breakfast the and has addedTrout been to menu theon a basis.full-timeOur holidayother periodand continued we’ve Applefestthe ChickenGrilled Salad Freshthe and n’ Fruit Yogurt retail merchandise retail related to ourmusic and brandedfood products. downtown Nashville. The store Alanthefeatured collectionasJackson well as CrackerBarrelother event, created we a Oldtemporary CrackerBarrel CountryStore shop retail & Broadway at 1st in tie with To in CountrytheMusicAssociation’s CMAAwardsNashville, in which major is a industry When.” as wellsongs, as 10songsother suchincluding hits as the “Herein World” “Remember and Real called Songsexclusive CD Of Love Heartache.And TheCD two includes previously unreleased womenswear,foodcollectibles items, anAlanand Jackson SignatureRocker of course,and, an On November we out2nd, rolled TheCollection,AlanJackson includes which menswear, Academythe Country year.of Music this introduced we by an exclusive Zacthe CD Brown wasBand, which the named newtop group by Show Letterman,Late David With withLate Fallon Night Jimmy and inHuckabee.Then September, was and with supported appearancesGeorge’s September onin several popular talk shows, the by exclusive GeorgeCD calledJones A Collection of MyRecollectionBest went onsale August, in In mediathe category,featured we something old something and newthe in quarter. first An been pleased to more see that peopletolikeCrackerBarrel take them.home with additionto pancake the mix,coffee and fried that apples offered forwe’ve pastthe year, we’veand branded Our product hasbeen line expanded further to apple include and sauce coffeesflavored in anyofyeartime the and shouldagain, this ourreduce potential seasonal markdowns.for </p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Store, Store, Inc. Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 4 corrected transcript Sandy Cochran,ViceSandy Executive FinancialPresident Chief Officer and on those onthose however. items, traffic Guest was downfor1.4% quarter.the outperformed We’ve the The negativepromotional effects onaverage offsetcheck were by improvements in margin gross beveragesincidence of last in year promotionaland effects in early quarter.the increasemenu price of 2.7%.approximately Our average negativelycheckwas affected lowerby a storeComparable restaurant sales increased 0.6%. average Our check increased 2%, including a store partiallygrowth, year-over-yearoffset by decline comparable in store retail sales. restaurantrevenues, which driven was by anincrease in storecomparable restaurant plus sales Revenuesfirstduringthe increasedquarter to1.3% $581 million,reflecting linetop2.4% growth in share diluted quarterfirstthe in of last year. reported2010, we a 37%increasein earnings diluted per shareof $0.78 compared $0.57 perwith Mike. like reviewThanks, I’d to nowfinancialsthe in detail. morefor quarterOverall, firstthe of Sandy? reviewandfinancial alsoshewill betalkingabout guidance our the offor the rest year. at which rates arewith we pleased.very And Sandy to coveris going this more in her detailin Shortlyendafterthe ofquarter, the were we ableto extend a ofportion our debt maturities to 2016 asmentioned Finally, we onyear-endthe we call, looking refinancing were at ouroptions debt.for wrappingand retail our employees helpguestswill andcreate shape baskets.our special gift part of CrackerBarrel the experience. retail of we And course, continuetoour have free gift product floor, whichon retail the intendedisall to the”thrill better ofsatisfy hunt,” the which key is a backtoSo going our strategy. As move we intoholidaythe season,now we have 25% more benefited benefited lowerfreightfrom costs. a from porchstrongerclearance event September. in restaurant Both ofretail salesand cost quarterthe in lowerwas toshiftdue a in mix product and assortments highermarkdowns resulting retail Higher cost of offset sales favorablepartially the restaurant of sales. Retail cost gross margin promotional onfood effects costs. declines price dairy, andin eggs seafood. mentioned As we benefited earlier, from also favorable and pricing lowerfood costs,which 2.1% declined compared last primarily with year becauseof asside,cost of asales percentage of sales lowerthan was last because year of favorable menu marginthe Gross for improvedquarter 110 basis comparedpoints last with year. Onrestaurant the apparel. strengththese in businesses morewas than by offset declines toyswomen’s in and and children’s growthcontinued foodthe in business, especially in and candy, our in collegiate business. The comparable CrackerBarrel store retail sales down4.8% were firstthe in ofquarter 2010.saw We was quarter sixpercentageapproximately points. positiveaverage Ascheck. a favorable result, our gap to Knapp-Track the indexfor the sales for ourwhile brandstrong solidand everydayvalue hasenabledus topricing sustain power aand The industrynegativehashad average checkresultas a of discountingand promotional activity, traffic in haswidened tothan more threepercentage points the in two past quarters. trafficKnapp-Track 13indexfor consecutive sincequarters lastthe quarter fiscal of ‘06 the and gap</p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Store, Store, Inc. Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 5 corrected transcript improve our improve cash flow reduce and debt. and sheet statementcash flow show benefitsthe ofinitiatives the that have we underway to income of millionthe $18 in was quarter first million40% or $5.2 higherthan year. Ourlast balance a result As of higherrevenues, higher operating margins lowerinterest and expense,our net income. highertaxthe rate in was quarter todue loweremployer tax credits percentas a of higherpre-tax the quarter, income tax rate 31.2%was compared 30.7% thewith in lastquarter first year. The debt less outstanding as ofa the result reductions debt that made were 2009. fiscal in In firstthe Interest expenseof $11.8 million$2.3 was million than less last quarter first year’s due primarily to higher. higherthan the in quarter yearsame last and operatingincome margin 80of basiswas 6.5% points higher by and general administrativeexpenses, our operatingincome ofmillion $38 was 16.7% expense. comp resultAs a of highergross margin favorableand operating expenses,partially offset andGeneral administrativeexpenses higherby were 60basis because points of higherincentive expenseresultingfrom sale-leasebackthe that completedwas at the 2009.of end fiscal expensesupplies and lowerexpenses torelated our turnoverwere offset partially by higherthe rent Otherstore operatingexpenses 30basis were points than better last year. lower Lower utilities, helpedcontribute to higherguest satisfaction scores positiveand experience. guest which turnover, isnow atas 72%, Mikementioned, has hiringreduced our and trainingcosts and priortwo Our quarters. hourly wageinflation quarterthe in onlywas 0.1%. Continued hourly low costs Healthcare were line expectationsin with for quarterthe were and favorable tocompared the expense. partially were higheroffset by healthcarecosts versusyear last and storeincreases in bonus Restauranthourly labor costs,management labor workers’and compensation costslower, were but expensesLabor a percentageas of salesunchanged were comparablethefrom quarter year. last of of year.the comparable our store sales ranges the and revenue overall guidance we that atbeginninggave the 2010.Totalrevenues are projected upto be flat to 2%.approximately We lowered endtopthe of environmentyetisnot improving thatand consumerspending tight remain will throughout our fiscal let’s Now, attakea the look outlook.Givenmost the trends,recent believe we consumerthe quarter. new unitsfewer in 2010. Andfiscal paidcash we of $4.6dividends million$0.20 or a share in the Capital expenditures quarterthe $15for were million with compared million $22 last year, reflecting inventory reflects our management initiatives. highernetthe income smallerand seasonal increasein inventories retail in 2010, which fiscal activities million$23 comparedwas the with use of incash of $7 million 2009. Theincreasereflects let’s toNow, ourmove cash flow. In quarterfirst the 2010,of cashfiscal provided by operating issubstantially which below the 3.75 maximum allowedof by creditthe agreement. with compliancedebt our covenants. Atend the of quarter, thetotal our ratio leverage was 2.92, nooutstanding were borrowingsourunder revolver at end the the of quarter. in remain We ofquarter 2009. Our borrowings,total currentincluding maturities, were $644 million there and ofquarterfirst fiscal 2009 ourand inventorytotal $153was million,down$33 million first the from example, For balance sheet,on our our retail ofinventory $120 million isdown$29 from million the </p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Store, Store, Inc. Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 6 corrected transcript Michael A. Woodhouse, Chairman, PresidentChief A. Chairman, Michael and Officer ExecutiveWoodhouse, guidanceondiluted earnings share per fiscal for 2010 is expectedto bein ofrange $3.05the to offset than the expensehigherinterest the allowingfor usyear to increasethe guidance. EPS Our strong Our performance firstthe in and quarter expectations continued for solid performance more enhancesand structurethe debt. of our were that extended rates.at attractive believethisWe transaction strengthens our balance sheet our from participatinginstitutions.financial We oversubscribed were for portionsthe offacility the In regardtoamendment the to our credit agreement,we’re pleasedthe with that receivesupport we ourextending credit agreement, offset partially by expectations lower for interest underlying rates. guidanceisa result of additionalexpenseinterest associatedfees and amending with and projected range at a ofto $48$50 million. The $2million increaseover beginningthe of year the to be betweenand6.2% compared6.5% 6% with in 2009. Ourfiscal interestnet expenseis investment out rolling initiatives. in key are ourWe raising operatingmargin guidance fiscal for ‘10 begin we managementto lap cost efforts begun last year, we and ahave levelgreater of expect year-over-yearWe our operatingimprovements in to diminishmargins in later year,the as expectation of inflationaryeasing pressures onkey cost lines. initiatives yearduringthe against benefitsthe our ongoing of cost effortsmanagement and guidancebalances uncertainties aboutconsumerspending costthe and from importantout rolling remainderfiscal of our 2010 commodity underrequirements contract. believe We 2010 our for commodity 2010 fiscal costs to bedown to 2%. We 1% have currently approximately 70%of the additional keyWith commodities now and locked, quarter a visibility,nowwe’remore forecasting open secondthe in halfof the year. fiscal open newseven CrackerBarrel fiscal units in of which2010, five are open,remainingthe two will maintaining inventory our levels, improvingand sales trends. yearthe progresses,As we to intend store retail sales for to be negativetheto flat for year. focusedWe’reon controlling costs, our to0.5% anincreaseof 1%, including approximately of2.5% menu pricing. expect We comparable storeComparable restaurant sales for full the are year projected to range betweena decrease of Okay. And IOkay.And thinknow we’re readyto goto questions. I’ll turnNow, callbacktheover to Mikeand you thank your for time. operatingenvironment and premiumto deliver shareholders.returns to our differentiatedbrands industry,the in wellwe’re positionedto take advantageof animproved generated we positivecash our in quarter.first flow As ofstrongestone the and most highly sales substantialearningsand growth in anenvironment continues that to bechallengingand that In conclusion, are we pleasedvery that abletowe’re achieve positivecomparable store restaurant spendingfor 2011, newfiscal stores,plus investment and innovationinitiatives such as Eat.Seat to approximately million$30 of maintenance seven capital, stores for new 2010, fiscal anticipated Capital expenditures forecast are tothe bein ofrange $70 to million,which $75 for allows share-basedother compensation. sharesduringthe only toyear offset dilutionin yearthe associated option with exercisesstock and an$3.30estimated with average 23million diluted sharesoutstanding. plantoWe repurchase </p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Store, Store, Inc. Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 7 corrected transcript QUESTION ANDQUESTION SECTIONANSWER quarter, we quarter, abit saw little of a reduction checkbecause ofin the onthe mix promotional but items, going we’re to some get downsups onand cost,but food Sandy specifically,mentioned, as this in and mix lookingat overall dollar goingWe’re margin. tosome get upsand downson price and designinga promotion total we lookingand are at impact the of promotiontotalthe onour overall – Michael <A Woodhouse>: you are on focusing amore margin little whenputting those together?menuitems talked lotwe abouta those very and havegood, I enjoyed oneand Ithing haven’t beforeasked is, Brad – <QLudington>: later.information – Cochran>: Sandy <A Brad – <QLudington>: – Michael <A Woodhouse>: – Cochran>:Sandy <A Brad – <QLudington>: – Cochran>:Sandy <A in year secondthe quarter forward,and doyou have whenthose last were year? Brad – <QLudington>: Operator: [Operator Instructions]. gotofirst Brad LudingtonWe’ll with KeyBanc Capital Markets. <A – Cochran>:Sandy <A Jeffrey – <Q Omohundro>: take Operator: We’ll our nextquestionJeff from WellsOmohundro Fargo.with – Michael <A Woodhouse>: Brad – <QLudington>: lowerbeing we than expectedhad aoffset deteriorationby retailthe in gross margin. that. majorityoftheBut the improvementduewas to benefit the we foodfrom got costsare that – Cochran>:Sandy <A didmanagement not helpthis quarter. attributableallreally to restaurant cost of sales retail and managementinventory priceand to coston, clarify of sales improved a quite yearbit the this in andquarterfirst you are sayingthat’s Brad – <QLudington>: to positive onmargin at neutral dollars traffic. the drive numberof peoplebutcoming up, in design we products,the the topromotions beneutral tolike thinkspeed. that We’d attractivenessthe ofproducts the increasewill frequency our and margin gross per perseat hourand focusing ourwe’re with advertising, our with execution on dollar ona basis,that was inwe offset termsof dollar margins. So overall the of goalisdollars </p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com I I expectdon’t toit bematerially I different,but to have getwill you that You looking are to know forward going for balancethe ofyear? the Brad, don’t I that have me. with Goodmorning. we haveWell, did a increase. price were So we abletobenefitthe get of Okay. And thenOkay.And finally more, one somebody I’ll let else on.get just I want will to Okay. youI later talk about that. thenAnd onthe menu new items, Yes. problem. No you.AThank housekeeping issue,lookingat the of porchtiming sales last Okay. Thank youOkay.Thank very much. Store, Store, Inc. Thanks goodand morning. Thank you.Thank are. we We Yes,at the look individualitems, are we but really are we How matching up... Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 8 corrected transcript selling season, selling we toso continueexpect to collection.thedo well with in results termsof publicity and isselling.range Andthe justwe’re coming intoChristmasour key with very that a countrypopular artist. aput So we little behindeffortmore We somethat. saw great from both an ambiance ofpointand view pointa from sales This of view. an effort broadenwas to positioning of our bothbrand as an old storeascountry and a placewhere musicmakes sense becausethere’ssome natural associations based consumers on our demographicsand and the The effortAlanJackson awas part of our strategy overall of tyingmusicinto country brand, our now. right soldWe’rewell. ofout a of items couple the within GreatGifts lookingwe’re and to replacethem forward. going Sowe avoidseasonalwill markdowns on GreatGiftsthethey and selling are quite season,theybut virtuethe have ofexpiring, not youif will, daythe afterChristmas, valuehavethey items They’re aregiftable that tied not Christmas, to ofbut course Christmasisa big gift-giving The complementsGreatGifts then that becausethose tenditems toattractive have points. price Christmaspiece. and themesto get betterlook a overall onall themargin of product we that sold. So thethat’s qualityof products, make wecertain that attractivehad product, reduce numbertheof Christmas then – in amiddle the deepening of recession. Sostrategythe towas protect ourselvesin termsof making aboutdecisions Christmasbackin Februaryand of March this coming year, offofso a very – Michael <A Woodhouse>: us with what you’rein seeing termsofresponse initial to that relative expectations.to your Thanks. a effortput significant behind AlantheJackson collection, if I’m wondering youcouldmaybe share bit little aboutmore these strategies going throughthis season.holidayimportant alsoAnd you’ve Jeffrey – <Q Omohundro>: – Michael <A Woodhouse>: quarter report?quarter did Howquarter firstthe guess fare I relative internalto your expectations? ofhow the much earnings full-year revision reflects better-than-expectedresults thefrom first Chris O’Cull>: – <Q – Michael <A Woodhouse>: – Cochran>:Sandy <A Chris O’Cull>: – <Q take will Operator: We our nextquestionChris from O’Cullwith Bank. SunTrust – Michael <A Woodhouse>: Jeffrey – <Q Omohundro>: – Michael <A Woodhouse>: – Cochran>: Sandy <A – Michael <A Woodhouse>: expectation superior marginis a performance through this holidaythan last thatyear. Is correct? Jeffrey – <Q Omohundro>: </p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com I I understandyou don’tthat give quarterlyguidance, wouldbut you describe Goodmorning,guys. Yes. Hey,Chris. Store, Store, Inc. Verygood.you. Thank theBut partfirst of your response would toleadme inferthe that Myquestion isrelated andto retail particular in if you couldsharea Good morning. Good you.Thank builtthat’s And intoour guidance. That’s correct. in Okay.we’relongFirst of all, a lead-time business, we so were morning. Good Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 9 corrected transcript <Q – Chris O’Cull>: – <Q – Michael <A Woodhouse>: frequentmore users. because light user of top-of-mindawarenesslow and need your toconvert really them to being Chris O’Cull>: – <Q that. wantdon’t toWe get aheadof ourselves or aheadof where economythe can takeus. industry fareisgoing over to the nextseveral andquarters just we’re ataking cautious outlook on abouteconomy,the I continuingly think a unemploymentincreasing majorfactor rate is a how in the industrythebased onKnapp-Track and thangetting better Knapp-Track. But are we optimistsnot On salesthethink it’sa side, I question of where the isgoing.economy areWe doing than better about.talked seen improvementWe’ve some confidentwe’re and to improve food our cost outlook, which we operationalcost side and managing labor cost foodand wasteall those and kindsof of things. prettyfeelingwe’re good aboutcost the controls and cost improvements seen in both the increase that achieved.so we far thinkwhen we I look theat rest the of thinkyear,it’simportant I don’t year. I But wantthink we get to intoarithmeticthe gameof what percentage of the year’s noquestion, was, better we than planned originally for quarter. the So builtthat’s intorestthe of the – O Michael <A Woodhouse>: – Cochran>:Sandy <A – Michael <A Woodhouse>: guidance. – Cochran>:Sandy <A don’t have don’t box thethat behappy we’d with to go intosmallerthe markets. thinklookingWe to the and efficiency angotinitiative going on that, will which thetakesome So, time. answer we is no, – Michael <A Woodhouse>: smaller markets?these Chris O’Cull>: – <Q – Michael <A Woodhouse>: development foropportunities CrackerBarrel storesis building in smaller markets... Chris O’Cull>: – <Q youquestion, really can’t measureweek-by-week becausethere soare just many fluctuations. it increasinglike to used that share travelour isholdingof But up. ofterms answering in the sustainedoverand time, over last the several where years miles driven hasflattened not out, we pickso should up. that overall,thinkBut I ofthingsone the I that would topoint isthat have we hoping are be to weekpleased whenthis we hear that peoplemore arethan driving flying this year, seasonal effect travel. Soyou’vefor really to got look at year-to-year. itI justmean, right now, we frequentlyannual,More annual than is tough to goodget readsbecause there’s much so of a – Michael <A Woodhouse>: development,can so you usshare with thatsome results you’veseen? group? know I you’vespent ona that, lot you’ve a lotdone of good productadvertising, new </p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Wouldyou talk aboutevidence the you’ve in seen frequency thatimproving of Okay.Fairenough. And Mikeyoulot talk abouta how travelingthe isa user Haveyou builtdo youor plan to build any new year somestores this in of No.understand. I thenAnd lastone question, believe I ofone the How muchHow didbeat we our own number? I’mtrying to figureif out cananswer we that givingwithoutquarterly the Store, Store, Inc. To get To to smallerthe markets, at lookingwe’re the prototypeand the Right. it’s toughWell, toa get readon frequency greater less or than Right. You’retrying to us someget to retrogive guidance.quarterfirst Company▲ bviously we ahad numberfor quarterfirst the ourand performance Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 10 corrected transcript average average experience,arethey looking own at individualtheir experience. Soby eliminatinglong averagethe ticket time, afrombut guest satisfaction ofpoint view, aren’t lookingguests at an downsubstantially and bigfirstthe that’s win. does It a of things couple It right. obviouslyimproves and testing earlythe rollout numberis theof outliers,the numberof longticket thattimes goes the for anyteam givenstore in to adjust to new the platform.The big thatwin seen we’ve the in – Michael <A Woodhouse>: a beingfrom guest seated tofood the being delivered? JoeBuckley>: – <Q the over next18months. SoIplanned. would say atsuccessfulwe’re this andpoint expect to be assuccessfulroll out we we once a rolled regionfor what doreal lookwe and we like are continuingon with program our as feelstores.likeSo we are we muchvery ontrack. didWe built have in,had checkwe a ofpoint whattrying we’re to the dowith numberof and employees some equipmentchanges and numberof to regionwasfirstthe insuccessful termsofmechanics the logistics, and which trivial not in were – Michael <A Woodhouse>: as learned you began roll out to program?the to theOctober wasregion, first completed that in regionfirstthe canand you tell what you us JoeBuckley>: – <Q take will Operator: We our nextquestionJoe from Bank America Buckley with Merrillof Lynch. – Michael <A Woodhouse>: Chris O’Cull>: – <Q smaller markets. longerterm, significant there’s a opportunity us tofor build overout nextthe five, 1510,years in and forgetand about. gaincomes busiest at Soour it’snow time. a of way life rather than thatsomething roll outnew we ofAnd courseis. weekends, we’ve as talked about before,busiestare Soour the time. greatest ismakingother certainthat are we executing at our highest on level currentwhateverthe platform So two it’s really Onedifferent things. isinnovationto improve how dothings we structurally, the execution. service and to table. thewe So as out,incorporateroll that we’ll in andthat Way BestOne weekend exampleof that.to Eat Seat significant is a improvement in operatingtheplatform kitchenthe for we focusing Now, are onhow do we improve structurally our execution and toisa Eat Seat good standards. banner headlineofWay.Best One have We standards our thisand isabout executing to our beenhad through both phases. It’s aboutall operating our current to standards. useoverallWe the phases rolledit and overout a periodof time. the So by offiscalend the year, wholethe system – Michael <A Woodhouse>: program,how should we think about as yearthe on?goes program begantoemphasis get year, whenwelast it might justlap ofand the sort dynamics of that of uptobring dateus ofyou’re if finding ways executemore to onthe better weekendswhenthator JoeBuckley>: – <Q I ticket times, thinkgoingreallywe’re to seesome satisfaction guest improvements.</p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Right.Okay,great. Thanks, guys. Okay. And thenOkay.And one questionmore onthe weekendexecution goals, kind just were Mike, you ableto meetservice the which thinkgoals, are I 14minutes you. thank Hi, First on Seat the I to Eat, believeyou started outit rolling in Store, Store, Inc. Yes, we started we Yes, it rolling October in out a year There were ago. two met goals.We our don’t We instant expect success.It atakes while learnedwhat Well, we isthat thegot we’ve right program. Therollout you.Thank Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 11 corrected transcript <A – Michael <A Woodhouse>: Bryan Elliott>:– <Q improve.dayparts to sequentiallymonthlies, are in we improving restaurant traffic.Breakfast slowestisthe of the three – Michael <A Woodhouse>: Bryan Elliott>:– <Q – Cochran>: Sandy <A Bryan Elliott>:– <Q continuesand are we tobeginning see abit little of weekday softness in breakfast. mix. In termsof daypart, the we’ve been someseeing thesoftness in dinnerweekday partthat and effect, fall the had promotion lower a although retail a food better cost.So that aneffecthad onthe add-ons, some seeing we’resoftness insome that. as discussed,Then hadwe we a promotional isa we’vewhich trend overseen the pastfew as managequarters guests their check, well as as – Cochran>:Sandy <A ofsense some daypart geography,and just drill little down a bit on restaurantthe sales? acouldgive little us to where insightas you are still seeing of the declinessome mix maybeand a Bryan Elliott>:– <Q take Operator: We’ll our nextquestionBryan from with Elliott RaymondJames. – Michael <A Woodhouse>: JoeBuckley>: – <Q <A – Michael <A Woodhouse>: – Cochran>:Sandy <A Stephen Anderson>: – <Q go will Operator: We Andersonnextto Steve MKMPartners. with – Cochran>:Sandy <A – Michael <A Woodhouse>: Bryan Elliott>:– <Q and desserts new ways some of that, doing so tomore follow on that. been abletothem get to a level significant of our menu team mix. isworkingSo our onsome new thinkan area I isa thereopportunity. real haveWe some goodverywe desserts, just neverhave – Michael <A Woodhouse>: initiatives certainly so...too Bryan Elliott>:– <Q daypart impacted. most overall earlier, isanimpact onindustry,the and thinkon probablyus I breakfast would bethe </p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Okay. Thank you.Okay.Thank But it But demonstratesclearly getting ontractiona the lot of daypartother Okay. Yeah,yeah, okay.Thank you. Okay. Hi,good morning.I wanted baseto touch onmixthe atrestaurants, the youif All right,All great. you.Thank Which Which attribute we tounemployment the issue. Thebiggest issue about mix,Bryan,continues to be beverageincidence, Thank you,Stephen. Thanks,Bryan. Store, Store, Inc. Goodmorningcongratulations and onquarter.the Thank you.Thank you.Thank backonAnd the nextquestion and add-ons,the we’ve – dessertis the would Is sayI way that I and dothink it’sunemployment, I as said Bryan,let just me clarifyonbreakfastthe theme. ourAs in you saw you.Thank Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 12 corrected transcript <Q – Michael – <QWolleben>: – Michael <A Woodhouse>: point time?this in onupdatethe progress being madeon reducing numbertheof trailersthat you guys haveuse to at agive balanceinventory us you guysthat ended at tohere compared last year give and us an Michael – <QWolleben>: – Michael <A Woodhouse>: – Cochran>: Sandy <A Michael – <QWolleben>: take Operator: We’ll our nextquestionMichael from Wolleben Sidoti& with Company. – Michael <A Woodhouse>: Stephen Anderson>: – <Q guidance.the second half ‘10of fiscal to seeimproved healthcarecost versus last bakedyear, all that’s but into – Cochran>:T Sandy <A any expect incrementalincreasefrom there? Isincrease. something that that you are still to looking anniversaryin 2010 calendar and doyou Stephen Anderson>: – <Q us. percentageguests, fewer our guests of are shopping in store retail whenthe comethey to with eat – Cochran>:Sandy <A than so you were before? seeing or youitems, seeing are aof purchaseslack somefrom of these arecustomers that coming in more suchticket asitems, gumsthe and Are mints. you still a seeing trade-down intothose lowerticket I a retail, know few for back,quarters commentingyou guys were guests that were lowerbuying Michael $ – <QWolleben>: – Cochran>:Sandy <A Michael – <QWolleben>: the than ofquarterfirst ‘09. Theretail out. forinventory yearthe foror quarterthe $120was million,which millionis $29 less – Cochran>: Sandy <A Michael – <QWolleben>: – Michael <A Woodhouse>:</p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Thereisa couple of stillstores them, have that they’rebuton their way Goodmorning. Thetickets aresmaller. slightly thinkit’smore I about conversion of Totalinventory $153was million. henew planrolls out beginningthe January, andof doexpect we the in Okay.And then... 100%gone? 100%? I wanted to sidego back to retail thereal here. quickly Could you guys Goodmorning. Store, Store, Inc. Okay,great. Thanks. Veryknowquickly, I you mentioned healththe insurance costs 153. And 153. then youif couldjust comment onsome of attrends the Excuse me. Excuse Percentage-wiseoninventory, I youcan the tell gone.trailershave morning. Good you.Thank Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 13 corrected transcript Michael A. Woodhouse, Chairman, PresidentChief A. Chairman, Michael and Officer ExecutiveWoodhouse, prettygood momentum there, youabouttalked the average clearlycheckand trend, the youif just you saidwhy youdown took endtopthe of your restaurant comp-storesales range, seems it a like Larry – <Q Miller>: – Michael <A Woodhouse>: – Cochran>: Sandy <A Larry – <Q Miller>: take Operator: We’ll our nextquestionLarry from with Miller RBC. – Cochran>: Sandy <A – Michael <A Woodhouse>: Michael – <QWolleben>: arethey coming now. in So working we’re on proactive the of how do side we it make attractivemore them to buyfor when certainly guests feellike cantheybuy retail at CrackerBarrel,again reallythat’s difficultto predict. our with restaurant traffic,we’ll goodbe in shape. But it’s difficult to predictat whatdoespoint the see someshould improvement. If cando that we thenand atsame the havetime move retail up benextthere And we time. as continueto workonuniqueness the of our product, I we think that bounceseconomy areback.We aboutall impulse we’re and aboutallnow, buybecauseit won’tit – Michael <A Woodhouse>: retailabout that bouncingback on eventualthe consumer? dorebound,you those expect conversions to backquickly snap howor are you kind of thinking Michael – <QWolleben>: offer our offerour isthe guests experiencetrue CrackerBarrel we’ve that forhad many years. as saidAnd I and times proudvery we’re of that factbrandthe our continuesto bewhat it hasbeen what wethat Okay,thank as you.Well,said we’re we earlier, pleasedvery with donewhat we’ve in difficult these backconferenceover to Mr. Woodhouse anyadditional for closingor remarks. will Operator: This conclude question-and-answertoday’s Atsession. this I’d time, tolike turn the – Cochran>:Sandy <A – Michael <A Woodhouse>: Larry – <Q Miller>: as simple that. And number. don’t we want to aheadgetof ourselvesin termsof our projections guidance, or it’s as thingsthink that are to getgoing before worse getthey driven bybetter, this unemployment – Michael A <A Woodhouse>: there?any color to staywere onit, would youput at leastto top the of end that revised down range, can youprovide </p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Okay,thanks. areHow you doing? quarter.Nice I apologizeI if this, I’mmissed but not sure Yeah,heyguys. Hi,Larry. Thank you. Thanks,Larry. Great. you.Thank Okay.And then lastly, just how doyou look at whenconsumerthe does Store, Store, Inc. Thanks. Larry.Hi, you.Thank trying we’re Well, hardto actuallyhave happen that before the Company▲ s I said I aearlier,s little justwe’re cautious aboutoutlook. the We Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 14 corrected transcript IHU IIAIN DMGS FR LS RFT R RVNE, GOWL, WR TPAE EUIY BECE, VRSS OPTR FIUE OR FAILURE CallStreet, FactSet All other areLLC. mentionedtrademarks of trademarksrespective companies. reserved. their All rights of marks COMPUTER service and trademarks are LLC CallStreet, FactSet and CallStreet VIRUSES, 2009. LLC CallStreet, FactSet Copyrighted are report this SUCH BREACHES, of appearance and OF contents The POSSIBILITY SECURITY THE OF STOPPAGE, ADVISED IS PARTIES WORK SUCH OF GOODWILL, ANY IF EVEN REVENUES, DAMAGES, COMMERCIAL OR OR HEREOF. 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AND COMPLETENESS, ACCURACY, PURPOSE, PARTICULAR A FOR FITNESS MERCHANTABILITY, OF WARRANTIES DISCLAIM IMPLIED ANY LIMITATION WITHOUT SUPPLIERS AND ASSOCIATES BUSINESS LICENSORS, ITS AND LLC CallStreet, FactSet LAW, APPLICABLE BY PERMITTED EXTENT MAXIMUM THE TO AND IS," "AS PROVIDED IS HEREUNDER YOU TO PROVIDED INFORMATION THE CallStreet, FactSet LLC, FactSet CallStreet, orLLC. moreorone its including of of employees, thewriter thisreport, aposition ofmay have of in herein. any the securities discussed beliefs or opinions the represent not do information this in contained assertions or opinions Any notice. without change to subject is date this on herein expressed information Any illegal. be would solicitation or offersuch an wherestate information any in any security buy to for anoffer ofthe solicitation or solely sell to offer an oras other advice orfinancialpublished construedas be to isnot and is purposes, report This the investor. as any of needs used investment be particular the to meet intended to designed not advice as is construed be information not This should It information. decisions. such investment of of basis primary usefulness or safety completeness, accuracy, the on reliance any including hereunder, provided information any of use the with, associated risks all bear and evaluate, must You information. the of timeliness or integrity, accuracy, completeness, availablethe guarantee the or endorse warrant, not of do we summary such, As data. or statement error-free or complete a be to purport not does and us by guaranteed not is but reliable be to believe we sources on based is herein information The Disclaimer Operator: will Operator: This conclude conference.today’s thankWe you for participation. your everybody.Thanks. are we lookingforward to reporting Februaryon ourin second quarter. Have a Thanksgivinggreat experience,and continuingto workon our profitability. our like performance,We quarterfirst and combination.And internally,we’ll continuetoonsimplifying focus business,the improving guest the andlong-term users new products attractmay that a audiencebroader be seems winningto a thatfinding this combination of serving restaurantthe up in products thatside appeal to our loyal in to come frequently,more we and want to reachingkeep toout new guest us to aWe’regive try. thinkbrandWe the thinkissolid,there I continuesto beopportunities to encourage loyal our guests helping with lineus topthe withand costthe and side margin ofbusiness. the also, earlier I think just we’re beginningto hit our stride. intoThingsare coming areplace that </p><p>CrackerBarrel Old Country www.CallStreet.com • 212-849-4070 • • 212-849-4070 • www.CallStreet.com Store, Store, Inc. Company▲ Ticker▲ CBRL Copyright © 2001-2009 CallStreet 2001-2009 © Copyright Q12010 Earnings Call EventType▲ Nov. 24, Nov. 2009 Date▲ 15</p>