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Operator
Good morning, and welcome to the Cracker Barrel's Fiscal 2020 Fourth Quarter Earnings Call. (Operator Instructions) I would now like to turn the conference over to Adam Hanan, Manager of Investor Relations. Please go ahead.
Adam Hanan - Manager of IR
Good morning, and welcome to Cracker Barrel's Fourth Quarter Fiscal 2020 Conference Call and Webcast. This morning, we issued a press release announcing our fourth quarter and full year results. In this press release and on this call, we will refer to non-GAAP financial measures for the fourth quarter and 12 months ended July 31, 2020. The fourth quarter non-GAAP financial measures are adjusted to exclude the fees related to 2 sale-leaseback transactions, the noncash gain on sale of assets related to the sale-leaseback transactions that occurred during the fourth quarter, noncash impairment charges related to store assets and the related tax impacts. The full fiscal year non-GAAP financial measures are adjusted for the items listed above as well as expenses related to COVID-19, an impairment charge related to our equity investment in Punch Bowl Social and the related tax impact of these items. The company believes that excluding these items from its financial results provides investors with an enhanced understanding of the company's financial performance. This information is not intended to be considered in isolation or as a substitute for net income or earnings per share information prepared in accordance with GAAP. The last page of the press release includes a reconciliation from the non-GAAP information to the GAAP financials.
On the call with me this morning are Cracker Barrel's President and CEO, Sandy Cochran; Senior Vice President and CFO, Jill Golder; and Vice President of Finance, Jeff Wilson. Sandy will begin with a review of the business and Jill will review the financials and outlook. We will then open up the call for questions for Sandy, Jill and Jeff.
On this call, statements may be made by management of their beliefs and expectations regarding the company's future operating results or expected future events. These are known as forward-looking statements, which involve risks and uncertainties that, in many cases, are beyond management's control and may cause actual results to differ materially from expectations. We caution our listeners and readers in considering forward-looking statements and information. Many of the factors that could affect results are summarized in the cautionary description of risks and uncertainties found at the end of the press release and are described in detail in our reports that we file with or furnish to the SEC.
Finally, the information shared on this call is valid as of today's date, and the company undertakes no obligation to update it, except as may be required under applicable law.
I'll now turn the call over to Cracker Barrel's President and CEO, Sandy Cochran. Sandy?
Sandra Brophy Cochran - President, CEO & Director
Thanks, Adam. Good morning, everyone. Thank you for joining us, and I hope everyone's continuing to stay safe and healthy. Since we last spoke in early June, our business and the casual dining industry have unsurprisingly remained pressured due to the pandemic. But despite this, I'm very pleased with the progress we've made in our recovery and on key initiatives in recent months. While we anticipate dealing with pandemic-related challenges for some time, I believe the decisive actions we've taken to strengthen our business model, bolster liquidity and adapt our operations have us well positioned to successfully navigate this environment. And I'm confident our fiscal 2021 business priorities and the corresponding plans will further strengthen our leadership position in casual dining and drive long-term value creation.
I'll discuss some fourth quarter highlights and speak to you about our priorities and plans for fiscal 2021. Then Jill will review our fourth quarter financial results and our liquidity, comment on our expectations for fiscal '21 as well as our sales performance quarter to date.
Before I go on, I want to comment on our restaffing and our commitment to ensuring a safe and healthy environment in our stores. I remain pleased with our effectiveness in restaffing our stores, which I believe has been facilitated by our strong culture and the actions we've taken to support our hourly store employees in recent months. Through the fourth quarter, approximately 80% of our PAR IVs had returned to work. I'm also impressed with our operator's commitment to ensuring a safe environment for both our guests and our employees. I believe these factors have been and will continue to be important in the current environment. Especially proud of how our store managers and hourly team members continue to deliver our mission of pleasing people during these difficult times. I want to again express my gratitude to all of our employees for the excellent job they've done over the past several months.
We were pleased with our sales trend and the sequential monthly improvements we saw in the fourth quarter. Comparable store restaurant sales decreased 39.2% in the quarter, improving from down 59% in May to down 28.2% in July and this improvement has continued into fiscal '21. We believe this trend has been driven by our reopened dining rooms, sales improvements at stores with open dining rooms, increased demand and the success of our off-premise and menu initiatives. Additionally, we believe these results reflect the strength of our brand, our strong everyday value and the trust our loyal guests have in us to deliver a great, safe experience with genuine hospitality even when the hospitality is delivered with a facemask on.
We also believe we benefited from summer travel. The demand for off-premise dining has remained strong. In the fourth quarter, we leveraged successful initiatives, such as third-party delivery and curbside pickup, and our family meal baskets offering maintained its popularity with our guests. Supported by our work to further enhance our off-premise operations, these sales grew approximately 145% over the prior year quarter and represented approximately 35% of fourth quarter restaurant sales compared to approximately 8.6% in the prior year quarter.
During the fourth quarter, we rolled out the new lunch and dinner menu that is part of our menu evolution initiative. The menu includes new craveable offerings, such as Chicken Pot Pie and Maple Bacon Grilled Chicken, which are available every day as well as new daily specials, such as Saturday Country Fried Pork Chops and Sunday Pot Roast Supper. Additionally, we believe the new simplified menu results in increased consistency and execution that it better highlights our signature offerings, value and variety. This is a significant initiative, which we've been taking a phased approach and I continue to be pleased with the results. It began with the introduction of our Signature Fried Chicken platform in fiscal 2019, and I'm looking forward to the future menu innovation we have planned as part of this initiative in fiscal '21.
We continue to make progress on the addition of a beer and wine program. As a reminder, at the time of our last earnings call, this test was in approximately 20 stores. Currently, these offerings are available in approximately 100 stores. Based on the favorable results, we'll be introducing the beer and wine program to the majority of our system in fiscal '21 and we expect it to be in approximately 600 stores by the end of the fiscal year.
I remain excited about this initiative. And in addition to the financial benefits, we believe these offerings support the guest experience by providing additional variety. The performance of this initiative has been in line with our expectation. And while it is mostly targeted enhancing the dinner day part, our mimosas have proven to be quite popular in the breakfast and lunch day parts.
I was also pleased with our retail performance this quarter, especially considering the headwinds our retail business is facing as a result of our dining room closures and capacity restrictions. Teams were focused on managing inventories and strong sales in categories, such as furniture decor and accessories, contributed to top line retail performance that exceeded our internal expectations. We believe consumers are looking for affordable ways to improve and update their homes during the pandemic and that our offerings in these categories strongly appeal to guests and provided a compelling price value relationship.
Fiscal 2020 was unlike any year we've ever experienced and the challenges presented by the pandemic have and will persist into our fiscal '21. Fortunately, I believe our existing business priorities around menu innovation, growing off-premise and enhancing the guest experience had us well positioned going into the crisis and they remain highly relevant. We'll build on these priorities to drive performance and long-term value creation amid this challenged environment.
Our fiscal '21 priorities include the following: first and most importantly, ensuring the health and safety of our guests and employees; second, driving restaurant sales by leveraging our new menu, introducing additional craveable offers and further growing our off-premise business; third, driving retail sales by increasing off-premise attachment and optimizing our floor space for the current reduced capacity environment; fourth, enhancing our digital infrastructure and evolving our digital strategy to drive sales and improve the guest experience across all channels; and last, accelerating the growth of Maple Street Biscuit Company.
Now I want to speak to some highlights of our fiscal '21 business plans and priorities. Our first and top priority is ensuring the health and safety of our guests and employees. Our elevated health and safety measures remain in place, and our teams continue to do an excellent job diligently executing the procedures and protocols and adapting to a dynamic situation. We're committed to prioritizing, and we'll be investing in health and safety over the long term, and we believe this emphasis has and will continue to strengthen the trust that both guests and employees have in our brand.
Culinary plans are focused on driving frequency by leveraging our new menu and introducing new craveable offerings during the fiscal year. For example, our Q1 menu promotion features our new Chicken Pot Pie, a highlight of our new menu and is being supported by an integrated marketing campaign that includes national TV. Looking ahead, I'm excited about future menu innovation, such as the hand-breaded chicken tenders we'll be introducing to the core menu later in the year, as we build on the success of our Signature Fried Chicken platform and I'm also looking forward to the continued rollout of our beer and wine program to our stores.
Turning to off-premise. We've been pleased with the growth of this business in recent years, which was further accelerated by the pandemic, and we anticipate that off-premise will remain elevated for some time. Fiscal '21, we're focused on growing our various off-premise channels by building brand awareness and affinity, optimizing off-premise operations and leveraging initiatives, such as curbside pickup and third-party delivery. Additionally, we'll be testing 2 new off-premise formats, grab-and-go and a dedicated catering kitchen. We believe grab-and-go will drive incremental To-Go purchases from our dining guests and can build off-premise behaviors and guests that may not use the To-Go channel as often. Our dedicated catering kitchen is designed to improve our ability to meet demand in high-volume markets and drive productive growth in catering. These tests are launching this month and I'll share additional details and future updates.
I continue to be impressed with the adaptability of our teams, and I'm pleased with how we've been able to quickly and successfully introduce initiatives, such as Front Porch Dining. This is currently available in approximately 350 stores and has helped mitigate the impacts of the capacity restrictions. Additionally, in certain locations, we've also set up tables beneath tents in our parking lots. Teams are focused on ensuring we deliver hospitality to our guests, whether they're dining in our stores, on our front porch, picking up an order To-Go. And we continue to adjust our operations to support the guest experience for all of these occasions.
In retail, we're currently focused on our core holiday business, which accounts for a significant portion of our annual retail sales. And our retail stores are presently set with fall and holiday assortments. We're encouraged by the early performance of these assortments and believe our affordable and unique holiday decor and merchandise will resonate with guests in the current environment. Our teams continue to work on optimizing the floor space in response to the capacity restrictions.
Additionally, we're focused on driving higher retail attachment for off-premise occasions, and this will be a key priority for the team throughout the fiscal year, as we evolve our assortments and the location of merchandise targeted for off-premise guests.
In fiscal '21, we'll be enhancing our digital infrastructure and evolving our digital strategy to drive sales and improve the guest experience across all channels. The coming weeks, we'll be launching our digital store to our system, which is a new digital platform that provides an integrated and improved user experience for guests, ordering food and retail. It is foundational for future planned initiatives that we believe will further enhance the guest experience and empower guests by giving them more control over their journey.
In addition to increasing convenience, we believe the digital store and these initiatives allow us to extend our hospitality in new ways. The digital store is already live in approximately 150 stores, and the initial response has been positive as we've seen strong user engagement. The digital store will also support sales driving opportunities, such as bundled restaurant and retail offerings, a loyalty program and increased personalization and customization as well as it will result in richer guest data and support of deeper analytical insights.
Another technology initiative that will provide additional guest experience enhancements as well as cost savings opportunities is our new POS system. We had suspended our rollout due to pandemic and I'm looking forward to resuming the implementation. Approximately 175 stores currently have the new POS, and we plan for approximately 500 stores to have it by the end of the fiscal year.
I continue to be impressed with how the Maple Street team is navigating a difficult environment and I'm excited about the brand's future. The resilience they've demonstrated during the pandemic has reinforced the attractiveness of the concept and their business model. We have a high degree of confidence in this brand and we're anticipating opening up to 15 new units this year. In addition to opening these new locations, the Maple Street team is focused on developing replicable processes and on leadership development, staffing and training to support the successful scaling of the brand as we accelerate their growth.
And lastly, before turning it over to Jill, I'll update you on our capital allocation strategy. Continue to work closely with the Board to ensure we have the appropriate capital allocation strategy. We believe we're well positioned from a liquidity standpoint and remain committed to our highly disciplined and balanced approach to capital allocation. Top priority is investing in Cracker Barrel and Maple Street.
Regarding the regular dividend, our Board continues to evaluate the environment and intends to reinstate the dividend as soon as it is prudent to do so. And lastly, we're evaluating our debt levels, and we'll be normalizing our leverage, both by reducing debt and by increasing EBITDA.
And with that, I'll now turn it over to Jill.
Jill M. Golder - Senior VP & CFO
Good morning, and thank you, Sandy. In light of the ongoing impacts of COVID-19, my prepared remarks will focus on our fourth quarter financial performance and our liquidity position. Then I will provide some comments on our outlook for fiscal 2021 and our recent sales trends.
I would like to begin by discussing our financial performance for the fourth quarter of fiscal 2020. For the quarter, we reported total revenue of $495.1 million, a decrease of 37.1% compared to the prior year quarter. Our restaurant revenue decreased 38.2% to $401.5 million, and our retail revenue decreased 31.7% to $93.5 million. Despite the headwinds from the pandemic, we were pleased with the improvement we saw throughout the quarter in our comparable store restaurant sales.
Fourth quarter comparable store restaurant sales decreased 39.2% with sequential monthly improvements from down 59% in May to down 28.2% in July. The improvement during the quarter was broad, both geographically and across day parts, with our dinner day part remaining the strongest and the breakfast day part seeing the biggest improvement. We believe our top line results have been supported by summer travel, improvements in dining room capacity, initiatives such as our new lunch and dinner menu and in a portion of our stores, the addition of front porch dining and the introduction of beer and wine.
We were also pleased with our strong retail top line performance, which similarly saw sequential monthly improvements during the quarter. Comparable store retail sales decreased 32.3% in the fourth quarter, and for the month of July, comparable store retail sales declined 16.9%.
Now moving on to expenses. Overall, we were pleased with our manageable expenses during the quarter as well as the cost savings we achieved as part of our business model improvement initiatives. Total cost of goods sold in the quarter was 30.5% of total revenue versus 28.8% in the prior year quarter. We delivered restaurant cost of goods sold of 24.7% of restaurant sales, which was relatively flat versus the prior year quarter. On a constant mix basis, our food commodity costs were approximately 40 basis points higher compared to the prior year quarter, driven by increases in beef and eggs, which was partially offset by a decrease in pork.
Our retail cost of goods sold was 55% of retail sales versus 48.7% in the prior year quarter. This 630 basis point increase was primarily due to employee discounts and increased used up markdowns, as our merchandising team aggressively worked to manage our inventories. I'm really proud of our retail teams who have been diligently working to ensure appropriate inventory levels and deliver improved retail sales in a difficult environment.
Our operators continue to do a nice job managing labor this quarter, as labor and related expenses were $187.8 million or 37.9% of revenue compared to $276.2 million or 35.1% of revenue in the prior year quarter. Although we had deleveraging from our fixed expenses in the current sales environment, we were able to partially offset this with approximately $7 million in cost savings we realized during the quarter as a result of our field management restructuring initiatives. We have been pleased with the results of this initiative, which we believe has been successful, in large part due to our focus in recent years on better training and leveraging our PAR IV hourly team members as leaders and mentors within our stores.
Other operating expenses were $141.3 million or 28.5% of revenue in the fourth quarter compared to $164.5 million or 20.9% of revenue in the prior year quarter. This 760 basis point increase was primarily the result of sales deleverage. Additionally, the growth in our off-premise business resulted in higher supplies expenses, which also contributed to the increase.
General and administrative expenses in the fourth quarter were relatively flat to the prior year quarter at $41 million, which includes approximately $5.7 million in fees related to the 2 sale-leaseback transactions. These fees were partially offset by approximately $3 million in cost savings realized during the quarter from our corporate restructuring initiative.
GAAP operating income was $40.1 million or 8.1% of revenue. On an adjusted basis, operating loss was $20 million. Net interest expense for the quarter was $9.9 million compared to $3.9 million in the prior year quarter. The increase in interest expense was primarily due to higher debt as a result of drawing on our revolving credit facility in order to bolster liquidity. Our effective tax rate for the fourth quarter was 16.8% compared to an effective tax rate of 13.9% in the prior year quarter. This increase was primarily driven by deferred taxes recorded as part of the sale-leaseback transaction that occurred in the fourth quarter. We reported fourth quarter GAAP earnings per diluted share of $1.05 and adjusted earnings per diluted share was a loss of $0.85.
I now want to speak to our liquidity position. Since the pandemic began, we have made it a priority to ensure the company is well positioned for the long term from a cash standpoint. To achieve this objective, we have been actively managing our balance sheet and have taken actions, such as implementing cost savings initiatives, drawing down on our revolver, exercising our accordion feature and completing a sale-leaseback transaction. We believe these actions, combined with the strong performance of our operations teams, have put us in a strong financial position.
I would now like to spend time discussing our 2 sale-leaseback transactions. The first transaction closed in the fourth quarter and involved a group of 64 properties that were part of a previous sale-leaseback that was set to expire in 2021. We entered into a new lease agreement with better terms that will result in cash rent savings of approximately $30 million over the life of the 20-year agreement. Additionally, we entered into a second transaction to further bolster our liquidity. This transaction closed in the first quarter of fiscal 2021 and resulted in us selling 62 properties for approximately $150 million. We believe the company's historically strong financial performance helped facilitate the transaction and secure an attractive long-term rate.
Regarding the financial and accounting impacts of the sale-leaseback transactions, the first sale-leaseback resulted in us recording a noncash gain on sale of assets of approximately $70 million. Our fourth quarter results also included $5.7 million in fees related to the 2 sale-leaseback transactions. The adjusted fourth quarter operating income and adjusted EPS results, I referenced earlier, exclude this gain and these fees as well as noncash impairment charges related to store assets. Adjusted EPS also excludes the related tax impacts from these items.
We anticipate the second sale-leaseback will result in a noncash gain on sale of assets of approximately $218 million in our first quarter of fiscal 2021. In fiscal 2021, we expect that these 2 transactions combined will increase our total rent expense by approximately $25 million compared to the prior year, which includes the amortization of the right-of-use asset related to the gains on the sale-leaseback transactions.
Our cash rent will increase $8.9 million versus the prior year, which includes the reduction in rent from the better terms of the first transaction as well as the increase in cash rent for the group of stores in the second transaction that are now being leased.
I now want to walk you through our change in cash from the end of the third quarter through the end of August. We ended our third quarter with $363 million of cash on hand. At the beginning of our fourth quarter, we exercised an accordion feature and increased our borrowings by approximately $40 million. During the fourth quarter, we generated approximately $64 million in operating cash flow, primarily driven by our improvement in comparable store sales. Some of the cash from our improved performance was used to invest in our key initiatives, such as our digital guest experience enhancements, expansion of the new POS system and our beer and wine initiative. We ended the fourth quarter with $437 million of cash.
The sale-leaseback transaction we closed on in August, further increased our cash, and we ended the month of August with approximately $565 million of cash. We believe our strong liquidity position enhances our flexibility, both for managing through the environment and as we consider capital allocation going forward.
The Board continues to evaluate the environment and our debt levels, and they will maintain a balanced approach to capital allocation and will take our strong cash position into account when determining the optimum mix of investing in our business, returning cash to shareholders and paying down debt.
Before moving to our outlook, I would like to comment on Maple Street. We are pleased with their performance and with their resilience during the pandemic as all of their stores are open with limited dine-in service. We continue to believe they have strong unit economics, which in normal environment includes targeted AUVs over $1 million, store-level EBITDA over 17% and the build-out cost of less than $750,000. We are excited about accelerating Maple Street's growth and anticipate opening up to 15 stores in fiscal 2021. And we believe Maple Street will meaningfully add to our results in the coming years.
I would now like to speak to our outlook. Everyone should be mindful of the risks and uncertainties associated with this outlook as described in today's earnings release and in our reports filed with the SEC. Because of the uncertainties resulting from the pandemic, we are not providing annual guidance. For fiscal 2021, we currently anticipate opening 3 Cracker Barrel stores. These stores had been in the fiscal 2020 pipeline, but were delayed due to the pandemic. We anticipate capital expenditures of approximately $100 million for the fiscal year. Of this amount, approximately half will support strategic initiatives and new unit growth with the remaining amount supporting existing store maintenance. We expect to achieve the remaining balance of our approximately $50 million cost savings target in fiscal 2021. Given the savings already realized, this means that the first 3 quarters of fiscal 2021 are each expected to deliver approximately $12 million to $13 million of cost savings.
We anticipate 50% coming from labor and related with most of the remainder coming in G&A. However, we do expect that these savings will be partially offset by inflationary pressures and investments with our investments driving sales and/or margin improvements over the long term.
We continue to closely monitor our restaurant supply chain and are having regular discussions with our vendors. To date, we have not experienced any meaningful supply chain disruptions, and we do not anticipate any significant disruptions in fiscal 2021, assuming that there are no severe COVID-19 outbreaks that affect our suppliers. We anticipate commodity inflation of approximately 1.5% to 2% in fiscal 2021.
We were pleased with our sales improvements in the fourth quarter and this trend has continued into the new fiscal year. Through the first 6 weeks of fiscal 2021, our sales trend has continued to improve with comparable store restaurant sales decreasing approximately 20% and our comparable retail sales decreasing approximately 15% when compared to the same period in the prior year.
We have continued to see strong off-premise sales growth in stores that have reopened dining rooms in some capacity. And currently, stores with open dining rooms are maintaining approximately 75% of their elevated year-over-year off-premise growth compared to off-premise-only locations.
Although we are encouraged by our trends, our overall outlook remains cautious for several reasons. First, the possibility of additional COVID outbreaks and resurgences; second, despite the improvement in our sales trend, there continues to be much uncertainty around consumer willingness to revisit full-service restaurants as well as our ability to continue front porch dining in the fall and winter; third, uncertainty concerning the economic impacts of the pandemic remains high. Despite these potential headwinds, we are confident our plans and initiatives in fiscal 2021 will drive performance and long-term value creation.
Additionally, we continue to believe we will potentially benefit from several factors. First, we are a trusted, differentiated brand with loyal guests; second, we have a strong value proposition; third, our interstate locations position us well when families choose to travel by car for holidays or vacations; and lastly, we believe key initiatives, such as our new lunch and dinner menu, the introduction of a beer and wine program and our investments in digital guest experience enhancements will help sustain our momentum and drive improved performance.
Open it up for questions. I'd like to turn it back over to Sandy.
Sandra Brophy Cochran - President, CEO & Director
One final point before we head into Q&A. We recognize the importance of maintaining a strong independent Board that serves the best interests of our shareholders, employees and guests with the expertise and experience critical to our business. Our Board regularly reviews its capabilities and is committed to an ongoing refreshment process. Part of that process, we've recently added 2 outstanding directors to our Board following a rigorous search process, Gilbert Dávila and Gisel Ruiz. Gilbert joined our Board in July and we announced Gisel's addition yesterday. Both of these candidates are tremendous additions who enhance the diversity and skill sets of an already outstanding Board, with Gilbert bringing substantial marketing, market segmentation and digital expertise and Gisel bringing a wealth of talent, having led complex operational and human resources functions for the country's largest company, Walmart. We're excited about what they will bring to our boardroom as we continue executing a clearly defined strategy to accelerate the growth of the company and enhance value for all shareholders.
And with that, Jason, now we'll open it up to Q&A.
Operator
(Operator Instructions) The first question comes from Todd Brooks from CL King.
Todd Morrison Brooks - Senior VP & Senior Research Analyst
You spoke to just things that kind of cautious on or watching going forward. Just wonder if you could kind of reconcile the down 20% restaurant same-store sales that we've seen quarter to date. How much of that is supported by the porch front and the tent-based outdoor dining that we may lose in some locations as we do approach the winter season? And if we could tie it to -- when you look at optimal performance, given the capacity restraints that you're having to operate under, is down 20% at the restaurant level pretty much as well as the concept can do in the current capacity environment?
Jill M. Golder - Senior VP & CFO
Todd, this is Jill, and thank you for your question. It's a great question, a tough one to answer. So let me kind of walk you through some things as we're looking at our -- the impact of capacity constraints on our sales versus demand. From a demand standpoint, just as we're focused on the health and safety of our guests and team members, guests are focused on their health and safety. So there may be some reduced demand because consumers are reluctant to eat in a dining room. Others might be cutting back on their kind of away-from-home dining occasions, just given the uncertain environment from an unemployment standpoint or an economic standpoint.
As we said, as the dining rooms have reopened kind of even under the capacity restrictions, we have seen our demand increase. And as we've looked at the demand progression, it's increased across all 3 day parts. We've seen the most improvement in our breakfast day part, but of all 3 day parts, dinner remains the strongest, so which says to us that there is demand out there from the consumer.
On the capacity constraints, we do believe that, in general, we benefit from the fact that we have a large open dining room and the operators have done a really nice job maintaining capacity restrictions, the 6-foot separation and managing through that, that approximately 50% to 60% restriction. Where we tend to run into capacity limitations, tends to be on the weekend, kind of weekend dinners as well as Sunday, that Sunday occasion.
As we said, we did introduce front porch dining in approximately 350 stores to help increase our overall capacity. The front porch dining adds anywhere from 5 to 6 tables, those are 4 top tables. That piece of it will most likely be curtailed as we get into the cooler months here. But -- so to your point, can we do better than down 20%? I mean, we have seen that we've been able to support the increased demand. The team has done a nice job. We can't directly talk to what our overall number can be at the 50% to 60% capacity levels. But hopefully, that gives you a little bit more color.
Todd Morrison Brooks - Senior VP & Senior Research Analyst
Yes, that's helpful. And then just a follow-up on that, one more question. If you look at the store base and the 350 stores where you do have the front porch dining setup, does it skew more across the southern tier, so you think you should be able to keep a decent amount of that in place through, I mean, not necessarily the heart of winter, but let's say, the fall shoulder period and if necessary, the early spring shoulder period?
Sandra Brophy Cochran - President, CEO & Director
Yes, it does. First of all, that's where our store base skews, and those were a lot of the states that allowed us to go to on-premise dining, some of the soonest. And we're also hoping that, that geography will help us extend our ability to allow guests to eat outside the long -- as long as we can.
Operator
The next question comes from Jeff Farmer from Gordon Haskett.
Jeffrey Daniel Farmer - MD & Senior Analyst of Restaurants
A couple of questions. I was looking to drill down on the summer travel season. So I was curious what was the highway location same-store sales performance like versus the nonhighway performance units? And what was the mix of local versus travel customers that you saw this summer?
Jill M. Golder - Senior VP & CFO
So Jeff, that's a great question. We've been slicing and dicing our data kind of 10 ways to Sunday. And we really did not see a huge differentiation between the stores that are kind of off-highway versus kind of more local. What we have seen is in the Northeast, we've seen more improvement as their capacity restrictions have been lifted. That's probably the biggest trend change that we have seen.
Jeffrey Daniel Farmer - MD & Senior Analyst of Restaurants
Okay. And then second topic. So for the 20% same-store sales decline that you've seen through the first 6 weeks of the quarter, just looking for some cadence there, meaning, what did it look like at the beginning of that 6-week period, in the middle of the 6-week period, and then how did you sort of exit that 6-week period? Meaning, in the last 2 weeks, just sort of how the same-store sales progressed or what they looked like over that 6-week period to get you to minus 20%?
Jill M. Golder - Senior VP & CFO
Okay. So as you can appreciate, 6 weeks isn't a too, too long of a time period, so I mean clearly versus where we were in the fourth quarter, we saw some improvement, but we don't really want to slice and dice the weeks themselves. I guess what I would say is that we've been pleased with sales kind of at all levels. We're pleased with breakfast, lunch and dinner sales, pleased with our ability to retain a significant portion of the off-premise sales as the dine-in grows. And then with us premise, all -- virtually all channels have done well, individual To-Go, the third-party as well as our catering. So overall, we've been pleased.
Jeffrey Daniel Farmer - MD & Senior Analyst of Restaurants
And I apologize if I can just sneak one more in, which was on the $50 million. I know I'm pushing my luck here, but the $50 million cost control that you had talked about last quarter and to this quarter, you mentioned on the call that, that could be offset by some investments in technology and some other things. So $50 million cost control versus what amount of dollars of investment are we talking about here?
Jill M. Golder - Senior VP & CFO
So we're going to continue to manage the P&L based on the business performance and our cash generation. So as we look out, let's talk about some of our kind of puts and takes in terms of our overall expectations. So we expect -- as we think about some of the puts, we expect to continue to generate cash from the sales performance. We will benefit from the cost savings initiatives. And we're expecting to take approximately 2% pricing, maybe a little bit less than that. On some of the takes, we're expecting wage inflation in the range of 2%. And we talked about on the call, our commodity inflation in the range of 1.5%. And so some of that then will be reinvested in our initiative. Probably the biggest investments there are going to be around the beer and wine initiative, as we do training and we obtain licenses. Then we'll have some of our investment in POS, which will both be capital investment as well as you'll see some training and incremental depreciation expense associated with that. And then, of course, our digital that Sandy mentioned, we'll see some impact in that in G&A expense and potentially other OpEx.
Operator
The next question comes from Brett Levy from MKM Partners.
Brett Saul Levy - Executive Director
Following on with Jeff's question there. I guess if you could give a little bit more incremental detail on the technology front from how you're thinking about spreading the costs to what level of internal disruption you might see as well as any potential operating or sales lift? And then just on the menu front, can you give any more detail on how your new menu items are mixing? What you're seeing from the beer and wine tests?
Sandra Brophy Cochran - President, CEO & Director
Hey, why don't I start this off, Brett, and then maybe, Jill, you can add whatever additional calls. Let's talk about technology first. We're really excited, we've got a variety of initiatives. As a foundational issue, I'm excited that we're going to restart the installation of our new POS systems. So that, as Jill mentioned, we'll be doing, I think we said we'll be about 500 by the end of the year.
Jill M. Golder - Senior VP & CFO
That's right.
Sandra Brophy Cochran - President, CEO & Director
That allows us as a platform to then have whether it's tablets at the table or we've got a new labor system, a new food system, all of which we'll be able to sort of layer on to that.
In terms of the digital initiative, we are rolling our digital store in the next few weeks. That's sort of a foundational piece, and as a beginning, sort of integrates variety of functions that currently sort of operate on a stand-alone basis. It's going to be a much better experience for our guests to be able to just enter the brand and then whether they want to get on the waitlist or order something, catering or whatever they want to -- however they want to interact with the brand. That is not really a very disruptive in the field, that's our IT team, and we have a digital team that will be rolling that functionality over time. What it will help in terms of empowering the guests, which will help our field. So for example, currently, curbside is an important part of our off-premise business, new functionality that our digital initiative will allow as you -- to be able to pull up and on your device, let us know you're there. And also, if you haven't paid already, you could pay either while you are in your car on your device or it will allow a server to be able to take payment through a tab, but at your car. So some of this functionality, it will be slightly disruptive as we inform the stores and do a little bit of training, but it will really streamline the operation going forward.
In terms of the dinner menu, and then I'll turn it over. I'll get all mine in. To begin with, we're really pleased with the guest reaction to our initial relaunch of the dinner menu. It -- what it was doing was allowing us to highlight some new craveable items as well as do a better job of reminding people about our signature offers. It does a better job, in my opinion, of highlighting our value. It's difficult to get a read given everything going on, but we believe that it is making it easier on our operators, and we are getting a lot of positive feedback from our guests. So we're pleased.
Jill M. Golder - Senior VP & CFO
So I guess what I would add, this is Jill, on the investment portion. Probably the biggest portion will be around capital to support our overall POS. So with -- we've said we'll spend about approximately $100 million in capital in fiscal '21. Of that, about 20% is to support our new store growth, about 30% is our strategic priorities or initiatives. And of that, half of it is the POS. And really, the remaining portion of that is store maintenance. So that's probably the biggest area where you're going to see some of the investments.
Operator
The next question comes from Jon Tower from Wells Fargo.
Jon Michael Tower - Associate Analyst
Right. Just a few from me. More modeling than (technical difficulty) So the cost savings you outlined in this call, Jill, $10 million realized to date, there was a $50 million target on last call given. But I believe there's also an $11 million from the previous initiative that was there. So can you just remind us whether or not that was the $50 million in addition to the $11 million? Did that include the $11 million that was already in place?
Jill M. Golder - Senior VP & CFO
Yes. So the $50 million were new cost savings. I will say that some of those were contemplated prior to and we pulled those forward. So to address the $11 million, just as a reminder, in fiscal '20, we achieved $12 million in the cost savings. And so it's -- to be clear, that was 4 initiatives that were planned in '20, and those were separate from the $50 million. So as you forecast out then, the $50 million is expected to impact -- of course, it impacted our fourth quarter of the last fiscal year, a little bit in the third quarter, and you'll primarily see the benefits in Q1 through Q3 of fiscal '21.
Jon Michael Tower - Associate Analyst
Okay. And then just on the G&A line in the quarter itself. It seemed like it was a little bit higher than at least I was anticipating, excluding the sale-leaseback fees. Was there anything else in there that you could speak to? Perhaps there were some costs around getting the beer and wine initiative up and going or some of the other investments that you are making for the business right now?
Jill M. Golder - Senior VP & CFO
Sure. Yes. So as you look at the G&A for the fourth quarter, there was some spending in the fourth quarter tied to our initiatives, specifically around beer and wine. As you look to prior year, I know some people -- some of the analyst expectations had all of the cost savings in G&A. And as we've outlined, about half of those should be up in labor and then most of the remaining in G&A. I will say, in G&A, there were some timing shift based on some accruals as well as I believe you just called out that there were some professional fees associated with closing on both sale-leaseback transactions.
Operator
The next question comes from Jake Bartlett from Truist Securities.
Jake Rowland Bartlett - Analyst
My first question -- I have a couple here. The first question is just, Sandy, on the alcohol test, if you could give us any color what you're seeing at the stores that you've had in test for a while now who we're trying to kind of assess what the longer-term impact might be to the model? And then you mentioned that you expect it to be completely rolled out by the end of the fiscal year. What should we expect for the cadence of that? I mean, should we -- is it going to be a gradual rollout or really kind of more lumpy?
Sandra Brophy Cochran - President, CEO & Director
So as I mentioned, it's currently in about 100 stores, which is [concentrated in] Florida, Kentucky and about 20 stores in Tennessee. We anticipate it next -- I think the Indiana, Mississippi, Virginia, it -- the cadence is dependent to some -- to a large degree, on the licensing requirements in the communities we're in and to what degree we can move through that. So that's how the rollout will go. It's difficult to predict. And as I mentioned, I think we expect to have it in about 600 stores by the end of the year, but we're doing it as quickly as we can.
In terms of the performance, it's early, and there's clearly some noise due to traffic declines, and then we have a new dinner menu. So we've got a lot of things going on right now. But overall, we're pleased. We have not yet really started to promote it. But I'm encouraged with how strong it's continued to be, especially in Florida, where we've had it the longest. As Jill mentioned or I mentioned in my remarks, mimosas continue to be the most popular, but we'll continue to relook at the assortment. In fact, I think we're testing some new items. And our first seasonal mimosa in maybe it's next quarter, even in Florida.
Jill M. Golder - Senior VP & CFO
Yes. And so -- and Jake, on the financial results, it's achieving our expectations. We will like to get a little more time under our belt. And hopefully, we can give you a little more color on our next call.
Jake Rowland Bartlett - Analyst
Great. And then in terms of the POS rollout and the ultimate savings that you can achieve from that, I believe that, that was all part of the kind of the 2015 through '18 or '17 plan or maybe was later. The last kind of 3-year target that you had a $40 million. I think a large portion, or I believe, the large portion was from the POS rollout. So if you can just remind us what kind of savings, and I think a big chunk was going to be software that was going to be layered on through labor and then a big chunk was going to be from software that was going to be layered on for food costs? But just remind us what kind of savings you can ultimately get once that POS system is rolled out?
Jill M. Golder - Senior VP & CFO
Okay, great. Jake, this is Jill. So what we like about the new POS system is it provides more functionality that we will -- that we believe both benefits the employee experience as well as the guest experience. So you're right. It enables a new system that will be implementing a new labor management system and a new food waste management system that we believe will generate savings. We believe it's -- honestly, it's easier for the team members to use. So it's easier to learn on. And from a training standpoint, it enables tablets, which we're in, in probably close to 170 restaurants as well. And the beauty of tablets is it keeps the server on the floor, so they have more time to interact with the guests. It helps with the speed of the guest experience. And it's, again, easier for the team members to use. And then just in general, it will help enable some of the digital technology that Sandy mentioned.
Operator
The next question comes from Gregory Francfort from Bank of America.
Gregory Ryan Francfort - Associate
I had 1 clarification and 2 questions. The first was just on the $25 million rent comment, is that a gross number, not excluding what you're rolling off, just to clarify that?
Jill M. Golder - Senior VP & CFO
It's -- Jeff's going to correct me, but it's a net number. So it's $25 million in incremental rent. It's net of all the transactions. Of that, $8.9 million is cash rent. Most of it is the amortization piece of it.
Jeffrey M. Wilson - VP of Financial Planning & Analysis and CFO of Emerging Brands
Right.
Gregory Ryan Francfort - Associate
Got it. Okay. Got it. And then just -- that's helpful. And then just the 2 questions I had. The first is, margins have, I think, been better than I would have expected or probably anyone would have expected 3 or 4 months ago. And I think one of the important questions for the investment community is if you get back to 100% AUV recovery, I guess, I should say, when, like where do you think margins go? Do you think they're like a couple of hundred basis points higher because of the alcohol program? You guys have kind of found efficiencies on the menu? Do you think it's maybe lower because you have some incremental costs around safety and food safety? What's your thoughts in terms of 100% AUV recovery? And where the margins might go on that?
Jill M. Golder - Senior VP & CFO
So excellent question, and we're all looking towards the period when we are in a more normalized time period, and we have more normalized sales. I guess what I would say is there's going to be a number of puts and takes. So from the -- on the expense side, we'll have more normalized expenses kind of back in the business. But we will benefit from our accelerated cost savings of the $50 million cost savings. And then, I guess, another piece of it will be where the sales are coming from. So I think we've talked a little bit in the past that off-premise sales have slightly lower flow-through just based on the higher supply cost.
Gregory Ryan Francfort - Associate
Okay. Okay. And then maybe my other question is, Chili's moved recently to do their version of a ghost kitchen. I think it has the market very excited. And I'm curious maybe, Sandy, what your thoughts are on -- I use ghost kitchen, I think, the word loosely, but your thoughts on how that plays out? How Cracker Barrel might fit into that trend? Or if you guys want to participate in that trend? And how it might work?
Sandra Brophy Cochran - President, CEO & Director
Yes. Great. Well we've been thinking about that as well. And one thing I figured out is that people use the word ghost kitchen to me in a lot of different things. So let me tell you how we're thinking about the opportunity for Cracker Barrel and how we intend to at least go after it initially. So we are going to be converting one of our locations in Indianapolis, actually, to be a catering-only kitchen. And what I mean by that is it will be a location that will focus on just developing in that market, a catering business, potentially have new menu items that the stores are not really in a position to either have the equipment, the expertise or the time to produce. It will be able to concentrate sales, delivery capabilities in one place. We're also planning to use it to do individual To-Go for things like DoorDash. We might choose to use it to supplement the store's needs at peak holiday seasons, where sometimes our capacity is constrained in times like Thanksgiving, is the -- is our location's ability to manage the volume of the off-premise with the dining guests. So we're going to explore how having this asset might allow us to even further expand the seasonal business that we're doing in our stores. So that's the way we're going to start out looking at it. I'm excited to get into it and to give you an update on our next call.
Operator
The next question comes from Alton Stump from Longbow Research.
Alton Kemp Stump - Senior Research Analyst
I just had kind of one question, but just -- I get to that, kind of going back to the point about heading into winter season and your outdoor seating. If I do my math right, over 40% of your stores are in Sunbelt states, so to speak. I was thinking that people would actually want to eat outside more often in those hot states versus the mid-summer. Am I wrong on that? Or just kind of -- what's the thought process as far as that offsetting, obviously, up north, where clearly, there won't be as much outdoor seating?
Sandra Brophy Cochran - President, CEO & Director
You're right. We're hoping that we have a nice dry fall all through the Sunbelt and through Florida, and you certainly are able in -- lots of places where we do business, we believe we will be able to leverage our outdoor seating for the majority of the year. But even here in Tennessee, we do have days where you would not want to sit outside.
Alton Kemp Stump - Senior Research Analyst
Yes. That makes sense. And then kind of the main question, which is as we kind of think back over the last 6 months, obviously, off-premise being up to 35% of sales here in 4Q. I was curious as to what kind of things you have learned over the last 6 months that you can use once you do eventually get past COVID to help bolster your long-term off-premise sales?
Sandra Brophy Cochran - President, CEO & Director
Lots of learnings. And I think anyone who has, after going through this, is hopefully taking a minute to figure out what have they learned and how they can apply it to being even better going forward. So we've learned that the brand can be more innovative than maybe we expected our operators and their capacity and resilience in dealing with a rapidly changing environment has been just absolutely phenomenal, just magnificent. I think that we have realized that our guests are forgiving in these times, and they have been really flexible when it has come to whether we've had to open and then reclose in response to a particular community's requirements or whether we've had menu items or temporary shortages and items or limited menus to deal with the realities in particular locations. We have front porch dining, and we're loving it and our guests love it, but we weren't really designed to do that. So it's a little bit more difficult on our servers to take care of the guests out there and they're lot of -- that they've been really flexible in giving us the freedom to try some things. I think that was a big learning.
We didn't learn, but I was pleased to have confirmed that we have a lot of employees who were ready, willing and able to come back when we needed them to, and that has been a great benefit to us and to our brand and our guests. And then we learned about how loyal our guests are to the brand and how much they missed the food we offer and how much I think our brand and the experience in our brand reminds people of just safer, happier times and that role that we play for them and their families, whether they're celebrating something or they're just all trying to get back to normal.
Operator
The next question comes from Robert Derrington from Telsey Advisory.
Robert Marshall Derrington - MD & Senior Research Analyst
Sandy, can you give us a little bit of color, when you talk about the digital store rollout, are we talking about an upgraded and improved app? Can you give us some kind of color on that? And how it essentially will help the business?
Sandra Brophy Cochran - President, CEO & Director
Yes. It is an upgraded app. So you're probably -- it's in 150 stores, if you happen to be in the proximity of one of those, and you were to log on to our app, it will redirect you to the new Cracker Barrel app. And what it does is give you a much more integrated and improved user experience for both ordering food. So it's just the way it helps you navigate the menu and customize, your order is more clear as well as attach retail to it. So that's what the initial pilot is really foundational. It's about integrating. You get on the waitlist in a way that we think the guests will understand better and will be a better experience. And then as I mentioned, on that platform, we intend to then add additional functionality that will help us be able to personalize -- remember you, personalize, make suggestions, customize, and then eventually support a loyalty program.
Robert Marshall Derrington - MD & Senior Research Analyst
That's great. And as a follow-up, traditionally, in the Southeast, and I think in a lot of parts of the country, football season is a really big time for travel for weekends, for morning breakfast after a game. The fact that so many schools are essentially kind of shutting down are really dramatically restricting the number of consumers who can go to a football game. Does that give you any pause for concern? Or are there enough programs that can offset that? What -- little perspective there, if you could?
Sandra Brophy Cochran - President, CEO & Director
Well you've just listed just one of the many issues that we have been trying to understand the impact of as we think about our sales expectations for the fall. I mean, you're right, those football weekends at the big SEC schools, that's not going to happen in the same way they certainly did before. Whether that will be offset with families who would have flown somewhere and now their vacation plans are going to be get the family in a car and just travel somewhere by car and do smaller vacations, and maybe that will be a benefit to us as an offset. We're hoping so. But although the football weekends might be the big events that you remember, but just whether or not kids are going to go back to school and stay in school and soccer tournaments and just the normal movement of the country, we're going to have to see how it plays out in the fall. And what we hope is that we're going to be a brand they trust. It will be an experience that they have confidence in and that we will be there, staffed and ready to go whenever they try to use us.
Operator
This concludes our question-and-answer session. I would like to turn the conference back over to Sandy Cochran, CEO, for any closing remarks.
Sandra Brophy Cochran - President, CEO & Director
So the last several months have presented significant disruptions and unprecedented challenges which we are likely to be facing for some time. But that said, I have great confidence in our brand and in our company's future. Cracker Barrel remains a trusted and highly differentiated brand with loyal guests. We believe we have a strong value proposition with great appeal in any economic environment, and we're confident that we have the right business priorities and plans in place to further strengthen our brand and our business model and to drive long-term value creation.
So thank you all for joining us today. We appreciate your interest and support.
Operator
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.