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Operator
Good morning and welcome to the Cracker Barrel fiscal 2017 first-quarter earnings call.
(Operator Instructions)
Please note this event is being recorded.
I would now like to turn the conference over to Jessica Hazel, Senior Manager, Investor Relations.
Please go ahead.
Jessica Hazel - Manager of IR
Thank you, Chad.
Good morning and welcome to Cracker Barrel's first-quarter fiscal 2017 conference call and webcast.
This morning we issued a press release announcing our first-quarter results and our outlook for the 2017 fiscal year.
The press release can be found in the investor section of our website, CrackerBarrel.com.
In that press release and during this call statements may be made by management of their beliefs and expectations of the Company's future operating results or future expected events.
These are what are known as forward-looking statements which involve risks and uncertainties and in many cases are beyond management's control and may cause actual results to differ materially from expectations.
We urge caution to 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 this morning's press release and are described in detail in our reports that we file with or furnish to the SEC.
We urge you to read this information carefully.
We also remind you that we do not comment on earnings estimates made by other parties.
In addition, any guidance or outlook we provide or statements we make regarding trends speak only as of the date they are given and we do not update or express continuing comfort with our guidance, outlook or trends except broadly disseminated disclosures such as this morning's press release, filings with the SEC or as otherwise required by law.
On the call with me this morning are Cracker Barrel's President and CEO Sandy Cochran, Senior Vice President and CFO Jill Golder, Vice President, Marketplace and Product Development Chris Ciavarra and Vice President and Principal Accounting Officer 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, Chris and Jeff.
We ask that you please limit your questions to matters relating to the Company's performance, outlook and plans.
With that I will now turn the call over to Cracker Barrel's President and CEO Sandy Cochran.
Sandy?
Sandy Cochran - President & CEO
Thank you, Jessica.
Good morning, everyone.
Thank you for joining us on the call.
This quarter marked the 10th consecutive quarter of positive sales growth and our 20th consecutive quarter of outperforming the casual dining industry.
We believe the differentiation of our brand experience and our excellent operations execution and our broadened marketing efforts helped us in outpacing the industry.
We grew our first-quarter earnings per diluted share by 18% to $2.01 which was above our previously stated guidance and above consensus.
In short, this favorability was driven by additional commodity favorability and the timing of some anticipated expenses which was partially offset by increased retail markdown spend.
Jill will be providing more detail around the financials for the quarter, but before she does I'd like to share highlights from the quarter and update you on some of our plans for the remainder of the year.
This quarter included the final month of our Summer Campfire Menu promotion which ran through mid-August and drove continued favorable sales mix.
Following the Summer Promotion we introduced our Fall Menu offerings which included an indulgent Pumpkin Spice Pancake Breakfast, a guest favorite French Dip Sandwich Platter and a new Harvest Kale Chicken Salad.
We are pleased with the guest responses toward this promotion which ran for much of the quarter.
Our stores are currently gearing up for the busy holiday season as we focus on growing our off-premise business.
This year we will offer an expanded family sized meals to-go program during the Thanksgiving and Christmas holidays.
We are excited about the growth of this platform to include a Heat n' Serve offering that serves up to 10 guests and can be picked up in stores during the holiday week and prepared at home.
We believe our strong equity in real homestyle foods and history as a destination for holiday occasions position us well for large party off-premise solutions.
And we anticipate the system-wide rollout will drive favorable sales mix during the holidays.
Regarding our retail business this quarter proved to be very challenging period both within Cracker Barrel and within the retail industry as a whole.
We had fewer restaurant guest visits with fewer of those guests purchasing a retail product and for the first time since the second quarter of fiscal 2014 we reported negative orderly retail sales.
Across merchandise categories the favorability in print media offering like cookbooks and stationary as well as in decor and cookware was offset by year over year declines in apparel, particularly outerwear, accessories and candles.
Our teams are working diligently to address the current sales situation through the use of promotional activity as we continue to see guests favoring value price points in our assortments.
Additionally, we have new product assortments that will hit the floor beginning this week and we will continue introducing fun, unique and nostalgic themes throughout the fiscal year to drive guest interest and purchase intent.
Our first-quarter marketing efforts centered on brand strengths including the affordability of our menu and our unique breakfast all day platform.
First, regarding our messaging around our everyday menu affordability, through national cable advertising, local television media heavy-ups and localized Spanish media advertising, we brought the story of our country dinner plates category to life.
This core menu category allows the guest to customize their meal by selecting one of 10 protein offerings and pairing it with two of our more than 20 side options.
Served with a choice of biscuits or cornbread at a $7.99 price point the country dinner plates category builds value perceptions targeting the dinner daypart.
Recognizing that today's consumers are focused on value, affordability and variety we will continue to feature our country dinner plates throughout our six week second-quarter cable flight.
Another brand strength we chose to highlight in our first-quarter marketing efforts was our Breakfast Y'all Day platform and for those of you who didn't hear me I did in fact say y'all day.
Breakfast all day has been a key differentiator to the Cracker Barrel brand since 1969 and we chose a play on words to convey our distinct Southern brand heritage in a humorous way, particularly targeting the millennial consumer.
With breakfast all day emerging as a recent topic of conversation among consumers looking for a differentiated experience, and with it being one of our natural brand strengths we identified an opportunity to interact with guests through the use of our billboard advertising, social and digital media and retail merchandise in a fun and uniquely Cracker Barrel way.
Looking to our fiscal year marketing efforts we are continuing our national cable advertising flight with pulsed on-air weeks throughout the remaining three quarters.
We are expanding our social media presence with the addition of new channels.
We are leveraging location-based marketing to effectively reach our consumers and we are increasing our presence in paid search advertising.
We believe the diversification of these marketing efforts will keep our brand relevant and drive both reach and frequency with today's consumer.
The operations team made significant progress on our identified cost-reduction initiatives during the first quarter.
As a result of our fusion learnings we changed the structure in our retail sales and service functions and now cross-train our retail sales associate and cashier positions.
This system-wide change allows us to deploy fewer associates during our low volume hours, reducing store hourly labor by between 25 to 30 hours per week.
We believe this initiative will be a significant contributor to our fiscal 2017 cost savings.
Additionally, we continue to see favorability in our restaurant cost of goods line driven by our targeted food management initiative as well as in our utilities line from the implementation of LED lighting which is currently being installed in the exterior of our stores.
We continue to grow our store base in new and developing markets and opened two new Cracker Barrel stores during the first quarter including our second store in Las Vegas.
We've been pleased with the guest responses to our new store openings and we currently anticipate opening six or seven additional Cracker Barrel stores this year including our entry into the Pacific Northwest.
We opened our third Holler & Dash restaurant earlier this month and continue to be pleased with our progress.
Each store has provided its own learnings around performance in different markets or types of locations.
With stores open in Homewood, Alabama, Tuscaloosa, Alabama and now in Celebration, Florida we remain optimistic about the brand and are excited about our upcoming opening in the Nashville area.
Before I turn the call over to Jill let me say that our fiscal year is off to a good start.
We are seeing early success from our cost-saving initiatives, continuing to experience commodity favorability and are excited about growing our off-premise business through programs like our holiday Heat n' Serve offering.
While we continue to believe our efforts will resonate with our core and targeted guest base we remain cautious in our traffic outlook for the fiscal year.
Yet I remain confident that our continued strategic focus to enhance the core, expand the footprint and extend the brand will further move the brand forward and deliver solid returns for our shareholders.
With that I will turn the call over to Jill Golder, our CFO, for more details on the quarter.
Jill Golder - SVP & CFO
Good morning, everyone, and thank you, Sandy.
I would like to begin by discussing our financial performance for the first quarter of fiscal 2017 and then our outlook for the 2017 fiscal year.
In this morning's release, we reported first-quarter net income of $48.4 million or $2.01 per diluted share, representing an 18% increase over prior-year earnings per diluted share of $1.70.
For the quarter we reported total revenue of $710 million, an increase of 1% when compared to prior-year revenue of $702.6 million.
Our restaurant revenue increased 2% to $573.7 million.
This was partially offset by a 2.9% decrease in retail revenue to $136.3 million.
Our total revenue increase was driven by positive comparable store sales growth and the net opening of two new Cracker Barrel stores, one in Mayfield, Kentucky and one in Las Vegas, Nevada.
Comparable store restaurant sales in the quarter increased 1.3% as average check increased 3% and traffic decreased 1.7%.
The increase in average check reflected menu price increases of approximately 2.2% and a favorable menu mix impact of 0.8%.
The first-quarter mix favorability was driven primarily by seasonal featured offerings including a limited time mushroom Swiss Hamburger Steak Country Dinner Plate, our core menu Grandpa's Country Fried Breakfast and our limited time Pumpkin Spice Pancake Breakfast, all of which we believe were offered at a great value to the guest.
Comparable store retail sales decreased 4%.
As Sandy shared, the quarter included negative store traffic in addition to fewer guests making a retail purchase.
We continue to be cautious in our outlook of our retail business through the holiday season.
Total cost of goods sold in the quarter was 30% of total revenue, a 170 basis point improvement from the prior-year quarter.
Our restaurant cost of goods was 25.4% of restaurant sales compared to 27.5% in the prior quarter.
This 210 basis point improvement was driven primarily by favorability in our commodity market basket.
On a constant mix basis, or food commodity costs were approximately 5.1% lower in the quarter than in the prior-year quarter, driven primarily by deflation in most of our market basket categories with the greatest dollar favorability from our eggs and beef categories.
The commodity deflation we realized in the first quarter was more favorable than we had previously anticipated.
Our retail cost of goods sold was 49.6% of retail sales compared to 48.6% in the prior-year quarter.
This 100 basis point increase was primarily the result of increased markdown spend.
Our retail inventories at quarter-end were $146.9 million compared to $145.3 million at the prior-year quarter-end.
Labor and related expenses were $249.1 million, or 35.1% of revenue compared with $244.3 million, or 34.8% of revenue in the prior-year quarter.
This 30 basis point increase was primarily due to higher wage pressure, increased management staffing and a higher store bonus that was driven by first-quarter favorability versus plan.
These were partially offset by favorability we realized through our retail sales and service cost reduction initiative and by employee benefits favorability.
Other store operating expenses in the quarter were $137.9 million, or 19.4% of revenue compared with other store operating expenses of $135.7 million, or 19.3% of revenue in the prior-year quarter.
This 10 basis point increase was primarily driven by planned depreciation and advertising expense increases that I spoke to on our last quarterly call.
This unfavorability was partially offset by favorability related to lower expenses for our current-year district manager meeting than for our prior-year biannual manager conference and training event as well as by decreased utility expenses from the implementation of our LED lighting initiative.
Store operating income was $109.8 million in the first quarter or 15.5% of revenue compared with store operating income of $99.6 million, or 14.2% of revenue in the prior-year quarter.
General and administrative expenses in the quarter were $34.1 million compared to $34.3 million in the prior-year quarter.
As a percent of revenue, G&A decreased 10 basis points to 4.8% versus 4.9% in the prior-year first quarter.
This 10 basis point decrease was primarily driven by lower incentive compensation.
Operating income was $75.7 million or 10.7% of revenue compared with operating income of $65.3 million, or 9.3% of revenue in the prior-year quarter, a 140 basis point improvement.
This favorability was primarily driven by sales growth, additional commodity deflation and timing of expenses we now anticipate occurring in the second half of our fiscal year.
These timing shifts, which drove approximately $0.10 of our first-quarter earnings per diluted share growth, included expected increased marketing spend and investments in employee-related expenses which will now occur in the second half of our fiscal year.
Net interest expense for the quarter was $3.7 million compared to $3.5 million in the prior-year first quarter.
Our effective tax rate for the first quarter was 32.9% compared to an effective tax rate of 33.8% in the prior-year quarter.
This 90 basis point decrease was primarily due to the reinstatement of the Work Opportunity Tax Credit.
Turning to our balance sheet, we ended the fiscal year with $125.1 million of cash and equivalents compared to $127.5 million at the prior-year quarter-end.
Our total debt was $400 million at quarter-end.
With respect to our fiscal 2017 outlook, everyone should be mindful of the risk and uncertainties associated with this outlook as described in today's earnings release and in our reported filed with the SEC.
As we announced in this morning's release we are raising our full-year earnings guidance.
We now expect to report earnings per diluted share for the 2017 fiscal year of between $8.10 and $8.25.
We continue to expect total revenue of between $2.95 billion and $3 billion.
We continue to anticipate comparable-store restaurant sales growth for the full fiscal year in the range of 1% to 2%.
We now expect our fiscal year performance to be in the lower half of that range, driven by a modest expectation for traffic improvement in the second half and a planned second-half pricing deceleration.
We now anticipate comparable-store retail sales of approximately negative 1%, reflecting a more cautious outlook in the retail environment.
Specifically, we believe that retail sales will improve from our first-quarter performance but will remain negative through the second quarter.
We now expect to open eight or nine new Cracker Barrel stores in fiscal 2017.
We anticipate increased fiscal 2017 second-half pre-opening expenses attributable to this updated expectation and to support planned openings for the first quarter of fiscal 2018.
We continue to expect to open four or five new Holler & Dash stores in fiscal 2017.
We now expect decreases in food commodity costs on a constant mix basis in the range of 3% to 4% for the fiscal year with the first half of the year being more deflationary than the second half of the year.
We believe the additional anticipated favorability is being driven by the lower industry traffic, yielding additional domestic supply in the commodity market.
We have locked in our pricing and approximately 60% of our commodity requirements for fiscal 2017 compared to 50% at this time last year.
We expect depreciation expense of between $85 million and $87 million for the year.
We expect our operating income margin for the year to be approximately 10% of total revenue.
We anticipate net interest expense of approximately $15 million.
We now expect an effective tax rate for the year of approximately 32%.
We anticipate that capital expenditures for the year will be approximately $125 million.
For the second quarter of fiscal 2017, we expect to report earnings per diluted share of between $2.05 and $2.15.
The second-quarter guidance is predicated on our current expectations including expected headwinds from a continued cautious traffic and retail sales outlook coupled with an anticipated increase in retail markdown spending, partially offset by tailwinds from anticipated commodity deflation and second-quarter favorability in our advertising spend.
With that I will turn the call over to the operator so that we can take your questions.
Thank you very much.
Operator
(Operator Instructions) Joseph Buckley, Bank of America.
Joseph Buckley - Analyst
Hi, thank you.
I have two questions.
Jill, can you go through the $0.10 of timing EPS benefit in the first quarter?
I think you mentioned marketing and employee-related expenses, but could you expand a little bit on that and when do you think that will surface?
Is that like a third-quarter, fourth-quarter timing when those expenses will come back into play?
Jill Golder - SVP & CFO
Sure, Joe.
The timing shift which we believe drove approximately $0.10 of our first-quarter earnings growth included shifts in anticipated incremental marketing spend, some expected impact from employee-related expenses like training as well as general and administrative expense timing.
We do believe these expenses will occur in the second half of our fiscal year.
Joseph Buckley - Analyst
Okay.
On the marketing side was there any difference in the number of weeks you were on TV year over year or was this spending outside of that TV medium?
Chris Ciavarra - SVP, Marketing
Joe, it's Chris.
We had one fewer week in Q1 versus prior year.
As we move into Q2 we will have the same number of weeks on a year-over-year basis with more weights.
Joseph Buckley - Analyst
Okay.
Then I have one more question, just kind of big picture.
Sandy, are you seeing any change in consumer behavior, are there any sign consumer might be picking up again at this point?
Sandy Cochran - President & CEO
I was wondering how long it would take for that question, Joe.
We don't comment in between the periods, so I won't comment on the performance in the second quarter.
As we stated on our last call and as we do currently believe we are hopeful that the consumer environment will be improved in the second half of the year.
Joseph Buckley - Analyst
Okay, thank you.
Operator
Steve Anderson, Maxim Group.
Steve Anderson - Analyst
Yes, good morning.
I actually have a couple of questions.
First, I want to ask about any impact that you saw from Hurricane Matthew given your exposure in the Southeast US?
And I have a follow-up on labor costs.
Jill Golder - SVP & CFO
Great.
Good morning, Steve.
Yes, there were several unfortunate weather events during the first quarter which included flooding in Southern Louisiana, Hurricane Hermine and Hurricane Matthew.
We believe these events negatively impacted our traffic results in the quarter by about 20 basis points with the majority of that impact from Hurricane Matthew in October.
Steve Anderson - Analyst
Okay.
And with regard to the potential change in the managerial overtime costs that as it's slated to go in by December 1 I just wanted to ask if you have a detailed estimate of what you would see that going forward?
Sandy Cochran - President & CEO
A detailed estimate of -- I'm sorry, Steve.
Steve Anderson - Analyst
I'm sorry, this is the regulation that requires increased compensation for managerial overtime.
Sandy Cochran - President & CEO
We've done that analysis, of course, and are well-positioned when it goes into effect on December 1. It had a modest impact on our managers.
Steve Anderson - Analyst
Okay, thank you.
Operator
Michael Gallo, CL King.
Michael Gallo - Analyst
Hi, good morning.
Just a question on the spread between, obviously check up 3%, commodity is down 5%.
I know you've talked about in the past that you thought that would moderate.
So given that commodities have continued to be probably if anything a little bit more deflationary I was wondering how we should think about your plan for pricing as you come to the back half of the year and some of the pricing rolls off?
Thanks.
Sandy Cochran - President & CEO
I will let Chris -- Chris, why don't you take that one?
Chris Ciavarra - SVP, Marketing
Good morning, Mike.
I think you know we launched our market level pricing program a few years ago.
And we continue to refine that program bleed through continued selective adjustments that we can reach our guidance.
As a matter of confidence, we continue to read our pricing actions and believe that we can pull through those plan increases.
Obviously, we remain careful in this environment.
As Jill still noted, our plan for a slightly lower level pricing in the back half, which is baked into our guidance.
Michael Gallo - Analyst
Thank you.
Operator
Alton Stump, Longbow Research.
Alton Stump - Analyst
Thank you, good morning and congrats on first-quarter result.
Just a quick question following up on the consumer question of certainly it's been a choppy last couple of quarters in the restaurant space.
But it would appear based on what you guys reported and also a couple of other family dining concepts that, obviously, have a lower average ticket seem to be holding up better than mid to high teens average ticket in the bar grill space, etc.
Is that in line with what you are seeing and is that part of your strategy to focus more on value with your advertising?
Sandy Cochran - President & CEO
Well, with respect to the consumer as we talked about on the last conference call, the environment that we certainly were in during the first quarter and to a certain degree expect to continue to be in through the second is uncertainty.
Clearly with the election behind us some of that has been resolved.
But there are a number of issues that will continue to be on, I think, consumers' minds and potentially impact the degree to which they eat out at restaurants.
In terms of our emphasis, we have believed that value was important to our consumer and that we needed to ensure that our marketing programs, our offerings were reinforcing our value position.
We also do want to highlight the new news in the menu, things like our campfire offering and then reinforce the strength of our brand with things like breakfast all day as I mentioned in my remarks.
In addition, our marketing plans, I think in the emphasis that we placed on integrating our marketing plans this year and putting more emphasis on the digital side we were able to engage with our guests in new ways that continue to make the brand more relevant.
Alton Stump - Analyst
Helpful, thanks, Sandy.
And then a just real quick follow-up, I know it's awfully early with your new two stores out in Vegas.
But any early read as to how that's going in comparison to other stores that you've opened up perhaps in core markets if there's any differences that you are seeing?
Sandy Cochran - President & CEO
We've been very pleased with the guest reaction out in Las Vegas and we now have two stores there and are, I don't know how else to characterize it, we are pleased.
We appear to be attracting some of our guests are clearly tourists in Las Vegas, it appears that some of them are traveling to dine with us from California and we haven't had a restaurant that was close enough prior to these two.
So I am optimistic about our move to the West.
Alton Stump - Analyst
Great, thanks, Sandy.
Operator
Jake Bartlett, SunTrust.
Jake Bartlett - Analyst
Great, thanks for taking the question.
Understanding that you don't give very much detail about the current quarter, I believe you said that you did mention that retail was going to be negative.
Are you giving any indication of what you expect for the restaurant same-store sales as you've done in some quarters in the past?
Sandy Cochran - President & CEO
No, we are not really providing much more than the guidance that Jill gave.
I think we were more clear about the retail given that that environment was unusual and we did feel that the retail environment, the weakness there would persist or at least we are anticipating that it's going to persist through Christmas and through potentially the end of the second quarter.
Jake Bartlett - Analyst
Okay, and is that weakness, is it purely just the conversion or I guess would it also be a function of traffic and what you are expecting there?
Sandy Cochran - President & CEO
It's both really.
As I mentioned it is -- our traffic was down, so we had fewer guests to begin with, and then within that group our conversion was down in the first quarter.
I think to some degree that reflects the impulse nature of a lot of our retail offering and in an environment where the consumer is challenged, anxious, you might come and dine with us but then decide to wait on the retail purchase.
The team did a good job, I think, of using our markdown spend to drive retail sales in the categories that we did.
And I am optimistic about the new product that's coming onto the floor and hope that that will be interesting to the consumers that we drive in over the next couple of months.
Jake Bartlett - Analyst
And just some pushes and pulls in the quarter.
I know Christmas and the timing of Christmas has had different impacts for other competitors.
I believe you mentioned last call that you expect it to be a benefit, and I just want to understand that given that I would think that Sunday would be a pretty good day for you anyway.
Maybe if you can clarify how Christmas is a benefit having it shift to Sunday this year?
And maybe if you could go into some of the differences with the takeout or the full meal offering that you are doing this year in Thanksgiving and Christmas versus what you've done in the past.
Sandy Cochran - President & CEO
Why don't I start with the Christmas question and then I will ask Chris to speak on the off-premise offering.
So generally when people talked about it being a benefit it is the number of days between Thanksgiving and Christmas and in this year what we are getting is an extra Friday which we consider to be, it's a very strong day.
In our projections we view that as a positive and that's baked into our plan for the Christmas season.
Chris, I will let you speak to the off-premise product.
Chris Ciavarra - SVP, Marketing
Sure.
I think you all know we have a pretty successful off-premise business in Q2, particularly tied to Thanksgiving and to what we call a ready-to-serve program.
It's a hot program that goes out our doors for about $65, this year $67.99.
One of the limitations of that program has been that it's only able to be served on that day, so it places a lot of pressure on our stores both in terms of the ability to service that business and our dine-in business.
So we have been testing over the past couple of years a cold program we call Heat n' Serve.
It carries a higher check at Thanksgiving, $99.99.
That serves 10 and allows the guest to pick it up two days in advance of that holiday.
So thereby opening up more occasions we can serve and reducing demands and constraints on our stores.
We are excited to extend that program also into Christmas and so, obviously, that program will have some benefit for us in the form of mix which is baked into our projections.
Jake Bartlett - Analyst
Great, and lastly in the first quarter here, how much was the lower, how much did the lower commodities help?
What were you expecting, I think you got the 5.1% deflation, what were you expecting in the first quarter?
Sandy Cochran - President & CEO
Go ahead, Jill.
Jill Golder - SVP & CFO
Well, I would just say that we did expect to have lower commodities but more modest than what we actually experienced.
But we don't like to give out the detailed line item.
Jake Bartlett - Analyst
Thank you very much.
Operator
(Operator Instructions) Bob Derrington, Telsey Group.
Bob Derrington - Analyst
Yes, thank you.
Chris, could you give us a little bit of color on the TV spots?
Here locally in the national market I think I've seen recently some of your TV spots featuring your country dinner plates with a price point.
The spots look better than, I shouldn't say better, but they look more appealing from a food photo standpoint.
Are those different?
Have those changed over the last couple of months?
Chris Ciavarra - SVP, Marketing
Hey, Bob, good to talk with you.
Yes, we did, I think as Sandy talked about in her prepared remarks, we were focused on driving a message around affordability and variety at the dinner daypart in Q1.
We utilized a new spot we call troubadour which was really a way of bringing the customer experience in the store to light, having some fun, being a lot more engaging and using that as a vehicle to drive excitement and interest in the brand.
So as Sandy said in her prepared remarks really trying to drive affordability and value and variety.
Bob Derrington - Analyst
It's interesting you say that because when I think about affordability and value and I look at the pricing that you've got this year for your Thanksgiving dinners in the store, it looks like the adult menu, the adult meal is priced 8% higher and the kids meal is priced 14% higher.
So is it a function of having a captive market out in suburbia where you can charge that much and you are not afraid of any pushback from consumers?
Chris Ciavarra - SVP, Marketing
I would say I would talk about it a couple of ways.
One is, obviously, we continue to believe we've got a very competitive offer in the marketplace and are pretty proud of what we have.
We pay a lot of attention to the other offers that are in the marketplace and ensure that we are driving what we believe is both competitive and a good value and we continue to believe that what we present is that.
So I'm not certain I'd talk about it as a captive market so much as just ensuring we are presenting something that works.
Bob Derrington - Analyst
Well, in this area there's not too many restaurants open on Thanksgiving.
So yours is a go-to place.
Thank you.
Operator
Ladies and gentlemen, this concludes our question-and-answer session.
I would like to turn the conference back over to Sandy Cochran for any closing remarks.
Sandy Cochran - President & CEO
Thank you all for joining us today.
I'm pleased with our first-quarter results and encouraged by the initial progress we've made in our business plans.
We look forward to building on the success of this quarter throughout the remainder of our fiscal year.
We appreciate your interest and support and wish you all a safe and happy holiday season.
Operator
The conference has now concluded.
Thank you for attending today's presentation.
You may now disconnect.