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Operator
Good morning, and welcome to the Cracker Barrel Fiscal 2018 First Quarter Earnings Conference Call.
(Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Jessica Hazel, Director of Investor Relations.
Please go ahead.
Jessica Hazel
Thank you, Laura.
Good morning, and welcome to Cracker Barrel's First Quarter Fiscal 2018 Conference Call and Webcast.
This morning, we issued a press release announcing our first quarter results and our outlook for the 2018 fiscal year.
On the call with me this morning are Cracker Barrel's President and CEO, Sandy Cochran; Senior Vice President and CFO, Jill Golder; Senior Vice President of Marketing, Don Hoffman; 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, Don 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
Thank you, Jessica.
Good morning, everyone, and thank you for joining us on our call.
In this morning's press release, we reported positive comparable restaurant sales that outpaced the Casual Dining Industry for the quarter and earnings per share that exceeded our expectations.
Also, during the quarter, our field and leadership teams made significant strides in the plans we set out for the fiscal year, many of which I'll speak to this morning.
Our first quarter focus was on implementing initiatives to drive top line improvement in both our restaurant and retail businesses as we navigated through an ongoing challenged industry environment and 2 major hurricanes, which impacted our first quarter results.
During the quarter, we held our biannual managers conference and training event.
At the event, we educated our restaurant and retail managers as well as our regional leaders on our long-term strategic plans through keynote speeches and an interactive learning center.
Each store manager participated in hands-on training for several key initiatives, including off-premise, crafted coffee, a new point-of-sale system and our retail conversion program.
Our leaders left the conference excited for the new initiatives and ready to execute within their 4 walls.
On the restaurant side, much of our focus this quarter was on the rollout of our enhanced off-premise platform, including the introduction of new catering menu offerings and the in-store training of our hourly employees.
We completed system-wide rollout of our off-premise platform during the 3 weeks in October.
To support the off-premise platform, we launched full-menu online ordering for large parties as well as individual To-Go offerings.
Guest responses to the new off-premise platform and the convenience of online ordering have been great.
On the retail side, we continue to navigate through a highly promotional environment, with consumers seeking deep discounts and value offerings.
Our first quarter retail results fell below our expectations, with our underperformance occurring broadly across the majority of our categories.
We worked hard to improve our merchandise value offer, particularly in apparel.
Although we focused on a number of promotional events in Q1 as well as an emphasis on the value in our assortment, the majority of our promotional activity was shifted into November, which we felt would better coincide with our traffic expectation.
Moving forward, we're even more focused on value and our second quarter plan anticipates deeper sales discount, which is incorporated into our value.
Jill will be taking you through the detail of our financial results for the first quarter, but before she does, I'd like to update you on some of our plans for the remainder of this fiscal year.
Throughout this year, we plan to leverage our enhanced off-premise platform as we seek to grow market share through catering, individual To-Go and the Heat n’ Serve.
During the second quarter, our off-premise efforts were once again focused on the Holiday Heat n’ Serve program, which has driven favorable sales performance over the last 2 years.
We believe this success results from the convenience of the program, combined with the quality and style of our food, to create the differentiated offering in the market.
We anticipate continued growth this year during the Thanksgiving, Christmas and Easter holidays.
We plan to support growth in off-premise through marketing efforts by our social and digital messaging, geo-targeted consumer e-mails and in-store collateral, and we anticipate off-premise sales to be a primary component of our full year sales growth target.
We will continue to invest in our product lineup, the guest experience and employee training to support our long-term plans within the space, and we have plans to test multiple delivery options this fiscal year.
Another major area of focus this year is our value proposition.
Results from our first quarter 100-store enhanced value test were promising.
Coupled with new product offering, the test featured value messaging across 4 weeks of local television and in-store advertising.
We plan to extend the test with additional markets in television week, January through March, seeking additional learnings regarding customer awareness and versus frequency during off-air periods.
We continue to believe an enhanced focus on every day value, including periodic introductions of new menu offerings, reinforced television and social media messaging necessary to meet consumers' need for value, and it's prudent against today's backdrop of heavy industry discounting.
Regarding our crafted coffee program, we've introduced the program in approximately 40 stores and have been pleased with the results.
We believe the platform will complement the strength of our Breakfast Y'All Day offering, drive check favorability and promote guest perceptions of menu variety.
We currently anticipate completing rollout to all stores by the end of the third quarter.
Through everyday feature offerings of iced and flavored lattes and mocha as well as limited-time-only offerings like a pumpkin latte during Q1 and the peppermint mocha during Q2, we expect the crafted coffee program to deliver favorable mix results this fiscal year.
An upcoming limited-time-only promotion that we're excited about is the introduction of Southern Bowls.
The Southern Bowls' product line will be featured as our spring menu promotion, highlighting 3 signature offerings: a Fried Chicken Benedict Bowl, a Ham n' Maple Bacon Bowl and a Sausage Brick Cake and Green Tomato Gravy bowl, they're available at breakfast, lunch and dinner, and we believe these offerings will appeal to both our core guests and to diversed and younger consumers, providing new news in the market and driving increased frequency of visits.
The introduction of Southern Bowls will be supported with an integrated advertising schedule.
On the retail side, our teams are working diligently to improve sales by placing greater emphasis on the price-value relationship of our merchandise.
Combined with increased operational focus on conversion-driving activities, we're optimistic that these events will support improved sales performance from our first quarter results and help manage our seasonal merchandise inventory levels.
We're pleased with results to-date on our seasonal collections, like our Halloween and Christmas assortments, as guests continue to seek out unique holiday offerings in our retail shop.
Also, our value assortment, like our Great Gifts, which are priced at $19.99 and below, and our women's wrap assortments are resonating with our guests.
We'll continue to support sales growth through our improved value assortments and through retail offerings that provide our guests with products that are both stylish and functional.
Our plans for the third and fourth quarters include some seasonal timing shift of our merchandise as well as the introduction of timeless themes that feature unique product offering.
Additionally, in the current retail environment, we remain nimble, making opportunity buys in on-trend, relevant assortments at price points that resonate with our guests.
While our merchants are working to mitigate full year margin erosion, we do anticipate our margin to be pressured by our fiscal year effort.
In addition to supporting our major restaurant and retail initiatives across all marketing medium, our full year marketing plans include a slightly condensed weekly national cable advertising schedule with higher weight levels.
We believe this advertising approach will increase our share of voice and top-of-mind awareness with consumers during key time periods for both restaurants and retail.
We're currently on-air with national cable advertising for a 6-week post (inaudible) with brand messaging regarding Cracker Barrel's hospitality and multigenerational appeal.
While our primary focus this fiscal year is top line sales growth, we continue to pursue business model improvements to drive sustainable margin expansion.
As we shared on our last call, we target $7 million to $8 million in annualized cost reductions for this fiscal year.
And With 1 quarter behind us, we're pleased with our progress and anticipate achieving this target.
We believe these ongoing business model improvements are necessary, especially given continued labor and commodity pressures.
Despite these headwinds and the pressures of an ongoing challenged restaurant and retail industry, I remain confident in our ability to execute against our plans for this and upcoming fiscal years, and with that, I'll hand the call over to Jill for details on the quarterly financials.
Jill M. Golder - Senior VP & CFO
Good morning, everyone, and thank you, Sandy.
I would like to begin by discussing our financial performance for the first quarter of fiscal 2018 and then our outlook for the 2018 fiscal year.
In this morning's release, we reported first quarter net income of $46.4 million or $1.92 per diluted share, representing a 4.5% decrease over prior year earnings per diluted share of $2.01.
We estimate that the combined impact of hurricanes Harvey and Irma negatively impacted our first quarter EPS by approximately $0.07 and the full year by approximately $0.10.
This estimate factors in the impact of lost sales from store closure days; food product waste; employee support, including closure pay; and expenses incurred for preparedness and reopening of the physical location.
For the quarter, we reported total revenue of $710.4 million, an increase of 0.1% when compared to prior year revenue of $710 million.
Our restaurant revenue increased 0.8% to $578.2 million.
This was partially offset by a 3.1% decrease in retail revenue to $132.1 million.
Our total revenue increase was driven by the net opening of 5 new Cracker Barrel locations and 3 new Holler & Dash locations since the prior year first quarter.
Comparable store restaurant sales in the quarter increased 0.2% as average check increased 2% and traffic decreased 1.8%, including 30 basis points of unfavorability from the 2 hurricanes.
The increase in average check reflected menu price increases of approximately 2.2% and an unfavorable menu mix impact of 0.2%.
The first quarter mix unfavorability was driven primarily by lower beverage incidents, which we are addressing as part of our 3-year plans regarding specialty beverage offering, like crafted coffee.
First quarter comparable store retail sales decreased 3.6%, falling below our expectation.
Included in these results is a 60 basis points unfavorable impact from the 2 hurricanes as well as the timing shift of promotional cadence, which drove unfavorability in October and is providing favorability in our November results to date.
The retail industry has remained highly promotional, and we anticipate this to continue into the foreseeable future.
We continue to be cautious in our outlook of the retail business and do not anticipate significant industry improvement this fiscal year, although we do expect that our retail performance will improve versus our first quarter results.
Total cost of goods sold in the quarter was 29.7% of total revenue, a 30 basis point improvement from the prior year quarter.
Our restaurant cost of goods was 24.9% of restaurant sales compared to 25.4% in the prior year quarter.
This 50 basis point improvement was driven primarily by the benefit of menu price increases.
On a constant-mix basis, our food commodity costs were approximately 0.1% lower in the quarter than in the prior year quarter.
Our retail cost of goods sold was 50.6% of retail sales compared to 49.6% in the prior year quarter.
This 100 basis point increase was primarily the result of lower initial markup.
Our retail inventories at quarter-end were $151 million compared to $146.9 million at the prior year quarter-end.
Labor and related expenses were $248.1 million or 34.9% of revenue compared with $249.1 million or 35.1% of revenue in the prior year quarter.
This 20 basis point decrease was primarily due to lower bonus expenses.
Other store operating expenses in the quarter were $143.8 million or 20.2% of revenue compared with other store operating expenses of $137.9 million or 19.4% of revenue in the prior year quarter.
This 80 basis point increase was primarily driven by expenses related to our previously discussed managers' conference and training event, increased supply expenses to support the system-wide introduction of our enhanced off-promise platform and increased computer software fees and licensing expense to support some of our technology initiatives, like online ordering and online Wait List.
Store operating income was $107.7 million in the first quarter or 15.2% of revenue compared with store operating income of $109.8 million or 15.5% of revenue in the prior year quarter.
General and administrative expenses in the quarter were $36.9 million compared to $34.1 million in the prior year quarter.
As a percent of revenue, G&A increased 40 basis points to 5.2% versus 4.8% in the prior year first quarter.
Much of this increase was driven by expenses to support project staffing, include included increased salaries and wages as well as travel expense.
Operating income was $70.8 million or 10% of revenue compared with operating income of $75.7 million or 10.7% of revenue in the prior year quarter.
This unfavorability was primarily driven by: first, the previously stated first quarter investments included our managers' training conference, store-level training and increased general and administrative expenses; and second, the negative impact of the 2 hurricanes.
Net interest expense for the quarter was $3.6 million compared to $3.7 million in the prior year first quarter.
Our effective tax rate for the first quarter was 31% compared to an effective tax rate of 32.9% in the prior year quarter.
This 190 basis point decrease was primarily due to a change in the accounting standard, which requires the recognition of the tax benefits associated with share-based compensation and earnings.
Turning to our balance sheet.
We ended the first quarter with $120.2 million of cash and equivalents compared to $125.1 million at the prior year quarter-end.
Our total debt was $400 million at quarter-end.
With respect to our fiscal 2018 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.
As we announced in this morning's press release, we are updating our full year earnings guidance to reflect the approximately $0.10 total impact of hurricanes Harvey and Irma, $0.03 of which we anticipate occurring in the second quarter.
We expect earnings per diluted share for the 2018 fiscal year of between $8.75 and $8.90.
We continue to expect total revenue of approximately $3.1 billion.
We now anticipate comparable store restaurant sales growth for the full fiscal year to be in the range of 2% to 3% and comparable store retail sales to be approximately flat.
This reflects a more cautious outlook regarding improvements in the restaurant and retail industry.
We expect to open 8 or 9 new Cracker Barrel stores and 3 new Holler & Dash stores in fiscal 2018.
We now expect increased food commodity cost on a constant-mix basis in the range of 2% to 2.5% for the fiscal year, reflecting expectations of a more inflationary environment, particularly within the categories of egg and beef.
We have locked in our pricing on approximately 45% of our commodity requirement for fiscal 2018 compared to 60% at this time last year.
Last year, our percentage of locked pricing was higher than usual.
While we are lower than last year, our current level is comparable to previous year's.
We expect depreciation of -- expense of between $95 million and $100 million for the year.
We now expect our operating income margin for the year to be approximately 10.5% of total revenue, driven primarily by higher commodity inflation, ongoing wage pressure and deleverage from sales.
We now anticipate net interest expense of approximately $15 million to $16 million.
We continue to expect an effective tax rate for the year of approximately 31% to 32%.
We continue to anticipate that capital expenditures for the year will be $150 million to $160 million.
Predicated on these expectations, and particularly related to our outlook on sales and commodity inflation, we dissipate full year earnings to be at the lower end of the previously stated fiscal 2018 EPS range of $8.75 and -- to $8.90.
For the second quarter of fiscal 2018, we expect to report earnings per diluted share of between $2.15 and $2.25, including an estimated $0.03 of residual hurricane impact.
And 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) And our first question will come from Gregory Francfort of Bank of America.
Gregory Ryan Francfort - Associate
Maybe just the first one.
Can you dive a little bit more into the labor cost in the first quarter and -- I mean, how you were able to get 20 basis points of leverage on the comps that you had.
And maybe, any changes to the store level operations or sort of management structure that you guys are putting into place and the timing of any of that?
Just sort of curious, maybe, what drove the favorability?
Jill M. Golder - Senior VP & CFO
Sure, Greg.
This is Jill.
So from a wage rate inflation standpoint, we had guided to approximately 2.5% of inflation for the year, and our first quarter was a little bit higher than that, at about 2.8%.
But we still expect to remain in that range of 2.5% to 3%.
So some of the other things where we experienced favorability in the first quarter, as I mentioned in our prepared remarks, we had lower bonus as well as lower working -- workers' compensation in the first quarter versus prior year.
And then, as you'll remember, our cost savings initiative in fiscal 2018, we expect to be in the range of $7 million to $8 million, some of which are in the labor line item.
Gregory Ryan Francfort - Associate
Okay.
And that's because you have most of your store-level management flowing through the labor line rather than G&A, is that right?
Jill M. Golder - Senior VP & CFO
That's true.
Gregory Ryan Francfort - Associate
Got it.
Okay.
And then maybe just within your consumer base, I think one of the things we've seen is potentially the lower-income consumer doing better than the higher-income consumer.
I'm curious if you've any thoughts on that, maybe Sandy, and just if you're seeing that in higher-income versus lower-income markets or higher-income versus lower-income consumers, any sort of discrepancy in your consumer base?
Sandra Brophy Cochran - President, CEO & Director
No, I don't think that we've seen that.
I'm -- we continue to believe that our guests are anxious.
They're anxious about a variety of things and depends on where they live and how old they are and what the pressures are.
So whether it's getting a job, keeping a job, affording their health care needs or affording retirement, they continue to struggle against a backdrop with a lot of uncertainty.
And so that is certainly one of the issues in the macro environment that we're dealing with.
Gregory Ryan Francfort - Associate
Got it.
And maybe just one last one for Jill.
In terms of the CapEx, I know this was a guidance from your Investor Day, but the CapEx step up in 2019 and 2020, which, I think, it basically goes from $150 million to $160 million up to -- close to $200 million over the following few years.
I guess, what are the -- going to be the biggest drivers of that?
Is that the new POS system?
Is that the, kind of, -- I guess, I'm sort of trying to gauge what's going to drive that delta.
Jill M. Golder - Senior VP & CFO
Okay.
Greg.
Yes, that's a good recap.
So for this fiscal year 2018, our guidance for CapEx is $150 million to $160 million.
And at our Analyst Day, we guided for over the 3 years, we said that capital would be in the range of $550 million to $600 million.
The 2 biggest drivers are new store growth as we step up new stores and then maintenance CapEx.
So those were both approximately maybe up to 40% each in those categories.
And then the other piece of it is what you just mentioned.
The sales-driving initiatives as well as business model-enhancing initiatives like a new POS system.
Operator
And the next question will come from Jeff Farmer of Wells Fargo.
Jeffrey Daniel Farmer - MD and Senior Restaurant Analyst
Looks like the downward revision to your full year same-store sales guidance range was much greater than that hurricane impact we saw in the first quarter.
You guys did touch on it.
But in terms of your updated thinking on Casual Dining segment traffic, your own menu pricing in the mix over the balance of 2018, what are the components that did lead to that reduction in your full year same-store sales guidance?
Sandra Brophy Cochran - President, CEO & Director
I'll kick it off, and then I'll hand it over to Jill, Jeff.
So I've kind of already started touching on it.
We continue to believe the macro environment is challenging between the consumers, the competitive pressures, those from discounting as well as the preference-professed casual from at least some of -- with the demographic shift to Millennials, the Amazon effect, and the somewhat related, but in addition, the retail closures, the Netflix effect that may be keeping people at home more than out and shopping.
So all of those issues that we've been talking about, we continue to believe are out there.
And now, in addition, we're adding, sort of, commodity pressure.
So we do continue to anticipate some improvement in the restaurant industry, although our assessment of the backdrop and -- is that our expectations for industry improvement have become more modest.
I do -- we continue to believe, though, the brand, the Cracker Barrel brand, which is the most differentiated, which is focused on delivering this very consistent guest experience, will continue to resonate with guests in this environment and that we're really well positioned as we go into that challenging one.
Jeffrey Daniel Farmer - MD and Senior Restaurant Analyst
Okay.
And 1 more on the same-store sales.
So you mentioned that there was some softness from October just related to, I think, it was timing shift in advertising.
What was the impact on your October same-store sales number from that timing shift and did you get that back in November?
What's the order of magnitude in terms of the impact advertising is having on these numbers?
Jill M. Golder - Senior VP & CFO
So Jeff, this is Jill.
I'll answer that.
So we didn't dimensionalize the impact, but let me give you a sense of what we did.
So we did fall a little bit below in October, but our performance still outperformed the restaurant industry for the quarter.
So in October, we were comping over 3 weeks of national cable advertising versus prior year October.
And we have planned 1 additional week of national cable advertising in November compared to the prior year.
So we've had a little volatility within the month between October and November.
Jeffrey Daniel Farmer - MD and Senior Restaurant Analyst
Okay.
Just one more.
So I think I underappreciated last year, the Thanksgiving holiday Heat n' Serve.
The impact that, that could have had on your 2Q '17 same-store sales number.
But can you give us some color on that?
How impactful is the holiday Heat n' Serve?
And can you build upon what you did last year with this Thanksgiving?
Sandra Brophy Cochran - President, CEO & Director
Well, I'll talk about it generally, and I suspect Jill is not going to give you any specific.
It's very important during this week.
I would say it's less than important with the fiscal year or the quarter.
But we have put a lot of thinking and emphasis about how we can both grow the Thanksgiving holiday in terms of additional productivity in our stores, expanding the holiday to have an offer that our guests can pick up to 3 days ahead of the holiday, to position our stores so that they can better execute, both the To-Go demand and the dining room demand.
So we are looking to grow this Thanksgiving week business versus last year, and -- but Jill, I don't think we offer any more detail on, specifically, how much.
Jill M. Golder - Senior VP & CFO
No, we don't.
So we're not going to provide guidance on that piece of it.
Operator
And the next question comes from Michael Gallo of CL King.
Michael W. Gallo - MD & Director of Research
Sandy, my question is, I know you gave some commentary about the To-Go rollout doing really well in the month of October.
It didn't appear that given some of the hurricane impacts that you had in August and September that really accelerated the traffic trends to any great degree.
So I was wondering, I guess, looking at that, whether you have any signs of whether it is or isn't cannibalizing in-store occasions.
And then also, whether as you move more of your business to To-Go, whether that puts even further pressure on the retail business.
Sandra Brophy Cochran - President, CEO & Director
So let me be clear.
When I said I was pleased with the rollout, what I was referring to was the -- our field operators did an excellent job, I think, of implementing a key and important initiative over a very few number of weeks in the month of October, and that took a lot of people and a collective commitment to getting that done.
That will then set us up, that platform sets us up now to grow the business on top of it, starting this week with the Heat n' Serve offer and the individual To-Go business that is so important to us for this week, connected with Thanksgiving.
The month of October -- in fact, most of those implementations probably happened towards the end of month of October.
In terms of the October business, as Jill mentioned, we believe we were impacted both by our media shift out of October into November, we also shifted some retail promotional activity out of October into November.
Both of those decisions were made to better match our traffic expectations to our media and marketing plans.
And then for -- in some cases, we think that the hurricane, depending on where your geography was on your stores, you might've been better positioned on the restaurant side.
And some of our guests that are dining with us after the hurricane might not be as interested the retail than as they might otherwise during the year.
In terms of cannibalizing on the To-Go business, we will be measuring that.
There will certainly, I think, be some cannibalization, and we have anticipated some.
We believe, and our test results would indicate that the large-party To-Go business cannibalizes less than the individual To-Go business, which was one of the reasons that we emphasized and focused on that component of off-premise first.
So we started with our holiday Heat n' Serve.
We had a -- we already had a business there and a competency and credibility.
Cracker Barrel has a long history of being part of our guest holidays and which we've been testing for couple of years, and then the large-party To-Go is what we really added that operational platform for -- in the month of October.
Jeffrey Daniel Farmer - MD and Senior Restaurant Analyst
Okay, great.
And then just a follow-up question on the value platform.
You mentioned you tested it in 100 stores, and you'll expand the test here in January-to-March period.
Can you give us some -- any high-level thoughts on what you're seeing from a traffic and also margin standpoint, as we think about an environment where commodities are going to be more inflationary?
Sandra Brophy Cochran - President, CEO & Director
I'll ask Don to speak to the value test.
Donald H. Hoffman - SVP of Marketing
Sure.
Thanks, Michael.
Well, basically, the [Daily Delights] program that we were looking at was designed to hit 3 areas, and we were measuring 3 things: traffic, trade and guest value perceptions.
And so far, we're happy with the way the program is performing.
However, the hurricane that we've been talking about did have some sort of impact on our ability to read some of those measures.
So we intend to extend that test, as Sandy mentioned, during additional time periods in Q4, and we're optimistic about the program.
The program works across 3 dayparts, and we supported it with 4 weeks of advertising.
Early results are good.
There is a number of factors we intend to take necessary time to evaluate.
We continue to monitor how it sustains without advertising support using in-store merchandising.
In a few of the southern markets, we're uncertain if hurricane affected the test results so we're going to extend the duration in those markets.
And then finally, we're encouraged by the order rate the guests have for Daily Delights right now.
The impact that we've seen on value perceptions and taste measures and the increased scores that we're seeing on returned visitant then, especially on those markets we're running the program versus not.
Michael W. Gallo - MD & Director of Research
Okay, helpful.
Just again, a follow-up to that.
You hit on all the sales drivers and consumer metrics, but I was wondering whether you saw any negative impact from a margin standpoint as well?
Jill M. Golder - Senior VP & CFO
So from the value test, I mean, we continue to read the mix of it.
And so I guess what I would say is right now, it's been relatively flat and is achieving our expectations.
But as Don said, we're expanding the test, and we'll continue to read that.
Operator
The next question comes from Stephen Anderson of Maxim Group.
Stephen Anderson - Senior VP & Senior Equity Research Analyst
I am -- I wanted to follow up on the mix question, and specifically the everyday value.
I think, as we ran on [Daily Delights], has that increased as a percentage of total sales?
And as far as the other -- like, some of the more indulgent in the higher-ticket items, have you seen that decrease as a percentage of mix?
Jill M. Golder - Senior VP & CFO
So Steve, as we're continuing to read that test.
I mean, right now, we've seen overall mix remain relatively flat, and it's achieving our expectations.
But as we continue to read the test, that's something that we're definitely focused on.
Operator
The next question will come from Robert Derrington of Telsey Advisory.
Robert Marshall Derrington - MD & Senior Research Analyst
A couple of questions.
One, Sandy, you mentioned you anticipate some margin pressure for the retail goods in this holiday season.
Last year, it looks like your retail COGS were some of the highest that I can remember during the holiday season.
I think they were around almost, I think, 55.9%.
Should we anticipate that the retail COGS, in fact, would be higher than that this year?
Jill M. Golder - Senior VP & CFO
Right now, this is Jill, we're expecting retail COGS in the second quarter to be comparable to last year, relatively flat.
Robert Marshall Derrington - MD & Senior Research Analyst
Okay.
Along the line of the retail same-store sales trend, Sandy, you and I have spoken a little bit about this, I'm trying to understand the trend in retail same-store sales versus the growth in your retail average unit sales.
And basically, year-over-year, your average unit sales, I think, were down 4.3% for the retail goods, your retail same store sales were down 3.6%.
Basically, that implies something going on within the restaurants that have opened within the last 12 months.
Can you kind of help us understand if there is some dynamic that we need to understand on that?
Jill M. Golder - Senior VP & CFO
So Bob, this is Jill.
I think you're talk about overall total sale so...
Robert Marshall Derrington - MD & Senior Research Analyst
No.
No.
No, I'm talking about specifically your average unit volumes as quoted out of your press release.
Your retail average unit sale.
Jill M. Golder - Senior VP & CFO
Yes, that's right.
So that has the honeymoon that we're wrapping on.
Again, some very strong openings in Las Vegas last year.
So I think that's what you're seeing, that's driving that volume number..
Stephen Anderson - Senior VP & Senior Equity Research Analyst
Okay.
And last question, back to -- there was a question asked about the 3-year trend in CapEx.
And basically, that 3-year plan for CapEx, essentially, your slideshow -- or notes that new stores are roughly 40% to 45% of the $550 million to $600 million.
And if you look at some of the notes within the slideshow, it implies that you can open about 30-plus restaurants over the next 3 years.
Well, if you look at the 40% to 45% of the total CapEx, that implies that the average unit sales per store -- or excuse me, the CapEx per store is somewhere in the vicinity of $7 million plus.
Is there something that we should know about the new stores that you plan on opening in the years to come?
Jill M. Golder - Senior VP & CFO
Yes, so I think there is a couple of things going on there.
So one, as you look at the 3-year range with new stores being about approximately 40% of that total capital that you discussed, we would expect the capital to increase as we increase the number of stores that will open each year.
And we do expect new unit to increase, and there's regular inflation, but we expect them to increase as we expand westward and into some new market.
And then there's some dollars in there for expectations about Hollar & Dash.
Robert Marshall Derrington - MD & Senior Research Analyst
I was going to say, but some of the new stores implied there are Hollar & Dash, which cost roughly what?
About 1/3 of what the Cracker Barrels cost?
Sandra Brophy Cochran - President, CEO & Director
We haven't given that out.
But to answer your specific question, no, we don't anticipate new stores costing as much as you said.
Operator
And our next question comes from Jake Bartlett with SunTrust Robinson Humphrey.
Kevin Deshawn Robinson - Associate
This is Kevin Robinson on for Jake Bartlett.
My question centers on the first one around enhanced off-premise initiative and just trying to get a sense of what percent of sales were off-premise for the quarter.
And could you talk a bit about the orders versus small group versus the large group, and -- just to get a better understanding of early readings?
Jill M. Golder - Senior VP & CFO
Okay.
Well, thank you for the question.
Yes, we don't provide that level of detail in our comments, but the last year off-premise was 7% of sales.
I mean, it had grown versus the previous year.
Off-premise in this first quarter was up over prior year, and as we focus on the off-premise program, as we talked about, that rollout has just completed so we'd expect it to grow and accelerate in the remaining quarters.
Kevin Deshawn Robinson - Associate
Okay.
And my final question is, please talk about the potential impact of increased competitive value promotions or you marketing?
And also your plans for menu pricing going forward?
Sandra Brophy Cochran - President, CEO & Director
Well, I think that the -- I'll touch on the competitive environment as we continue to see a competitive environment with significant discounting.
We believe that it's important that we reinforced our value positioning against that backdrop.
So as a brand, it's been known for decades for offering value in really all 3 dayparts and every day value.
So we don't do the discounting and the couponing that some of our competitors do.
We do think it's important to reinforce that, which is really what the [Daily Delights] program was designed in part due to do.
It was to improve and reinforce that perception.
As we continue to see that happening in the industry, we -- Don, as he mentioned, does anticipate continuing that promotion in the second through the fourth quarter at the end of the second through the fourth with the advertising and as we expand the test that we've been running.
In terms of the pricing, Jill, I think that you -- why don't you give the guidance?
Jill M. Golder - Senior VP & CFO
Yes, so our pricing on the current guidance still includes pricing of 2% to 2.25%.
We're continuing to watch that closely.
And we take pricing twice a year, so when we get ready for our next round of pricing in the spring, we'll make the decision.
Operator
And this concludes our question-and-answer session.
I would like to turn the conference back over to Sandy Cochran for any closing remark.
Sandra Brophy Cochran - President, CEO & Director
Well, thank you all for joining us today.
I'm pleased with our first quarter results and encouraged by the continued progress we've made against our strategic initiatives.
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.