Cracker Barrel Old Country Store Inc (CBRL) 2019 Q2 法說會逐字稿

Good day, and welcome to the Cracker Barrel Fiscal 2019 Second Quarter Earnings Conference Call.

(Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Adam Hannon, investor -- Manager, Investor Relations.

Please go ahead, sir.

Good morning, and welcome to Cracker Barrel's Second Quarter Fiscal 2019 Conference Call and Webcast.

This morning, we issued a press release announcing our second quarter results and our outlook for the 2019 fiscal year.

In this press release and on this call, we will refer to non-GAAP financial measures for fiscal 2018 adjusted to exclude the impact of the 53rd week that occurred in our fourth quarter and a onetime noncash revaluation of the company's net deferred tax liability that occurred in our second quarter.

The company believes that excluding these tax benefits from its financial results provides information that may be more indicative of the company's ongoing operating performance while improving comparability to prior periods.

This information is not intended to be considered in isolation or as a substitute for financial 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; 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?

Good morning, and thank you, Adam.

This morning, we announced positive comparable store restaurant sales and traffic growth, and we reported earnings per share of $2.52.

Our restaurant sales and traffic trends reflected improvements over the first quarter, and we outperformed the restaurant industry.

We are pleased with the quarter as a whole as we continue to make progress in driving performance through an increased focus on our menu, the guest experience and the continued expansion of our off-premise business.

Jill will review the financial results for the quarter as well as our updated full year expectations, but before she does, I want to speak to some of our highlights for the quarter and provide an update on our plans for the remainder of the fiscal year.

Holidays are an important time for Cracker Barrel, and we believe we continue to strengthen our reputation as a go-to holiday destination for both in-store and off-premise dining occasions.

Our second quarter in-store menu promotion featured a new limited-time-only Country Fried Turkey with green bean casserole and cranberry relish, which was supported by national TV and digital media.

The TV advertisement continued our strategy of more explicitly highlighting our food while also incorporating elements of hospitality and warmth to help reinforce the special connection between Cracker Barrel and the holidays.

I'm pleased with the menu promotion and the marketing campaign, which drove top line growth in line with expectations.

Moving to off-premise, it performed well in the quarter as we saw growth across all 3 platforms with particularly large increases in our occasion and catering businesses.

As a percent of sales, off-premise increased approximately 200 basis points compared to the prior year quarter.

We believe the continued growth of the Thanksgiving and Christmas Heat n' Serve offerings underscore the trust that guests have in Cracker Barrel to provide a convenient, delicious home-cooked meal during these special occasions.

In the catering business, we continue to leverage our catering sales managers and delivery vans.

We introduced a new customizable large-party offering, which proved to be successful.

And we're pleased with the growth in our off-premise business, and we are focused on ensuring that we have the right processes and infrastructure in place to protect the overall guest experience.

Turning to retail.

Sales in the second quarter fell below our expectations.

We felt well positioned heading into the second quarter after our solid first quarter results that included strong sales in our holiday merchandise themes.

And knowing that we would begin the quarter with lower-than-planned inventory levels, we supplemented our offerings with additional assortments that unfortunately did not resonate as strongly with our guests.

This, combined with softness in our food and collegiate categories, resulted in performance that was below our expectations.

Looking ahead, I'm excited about our third quarter menu promotion, which will highlight several of our most popular core menu offerings.

These Cracker Barrel favorites include signature items, such as our Chicken n' Dumplins, Country Fried Steak and Grandma's Sampler.

Featuring these proven guest favorites from our core menu will also simplify our operations to enhance our stores' focus on the introduction of our Signature Fried Chicken platform, which we're currently offering in over 400 stores and is on track to be in the full system in April.

This is a significant launch for the company, and we'll be investing in advertising, training and hourly labor to support this major initiative.

For off-premise, we're looking forward to the Easter occasion, which is smaller than Thanksgiving and Christmas, and we're optimistic about its potential sales growth over the prior year as we look to further grow this occasion.

We'll also be featuring a Mother's Day offering in a select group of stores as we seek to expand in new occasions, and we'll be making our customizable large-party meals an ongoing offering.

We remain focused on our employee experience and our guest experience.

A key tenet of our culture is our belief that the guest experience can never exceed the employee experience.

As we continue to evolve our hourly team member training and recognition program, we will be investing in it to support the employee experience.

As a reminder, we refer to this as our PAR program, which stands for personal achievement responsibility.

The highest level, which is achieved through a combination of tenure and testing, is PAR IV.

We're enhancing our PAR program to better leverage our PAR IVs and their leadership and role as mentors.

We believe these changes will drive improvements to the employee experience, which will, in turn, lead to a better guest experience, and we're encouraged by early results.

For retail, I'm optimistic about several of our upcoming assortments.

Our Easter merchandise offers fun, value-priced accessories to decorate the table as well as festive children's apparel.

And our coastal assortment, with its soft color palette and playful ocean-themed merchandise is an easy way for our guests to bring the feel of the beach into their wardrobe or home decor.

So in closing, I'm pleased with the improvement in our sales and traffic performance in the second quarter and I remain confident in our plans to leverage our brand strength and to execute our business initiatives to drive top line growth.

And with that, I'll turn the call over to Jill.

Good morning, everyone, and thank you, Sandy.

I would like to begin by discussing our financial performance for the second quarter of fiscal 2019 and then our outlook for the 2019 fiscal year.

In this morning's release, we reported second quarter net income of $60.8 million or $2.52 per diluted share compared to prior year adjusted earnings per diluted share of $2.73.

For the quarter, we reported total revenue of $811.7 million, an increase of 3% when compared to prior year revenue of $787.8 million.

Our restaurant revenue increased 4.6% to $631.2 million, and our retail revenue decreased 2.2% to $180.5 million.

Our total revenue increase was driven by positive comparable restaurant sales and the net opening of 10 new Cracker Barrel locations and 1 new Holler & Dash location since the prior year's second quarter.

Cracker Barrel comparable store restaurant sales in the quarter increased 3.8% as average check increased 3.7% and traffic increased 0.1%.

We estimate that unfavorable weather impacted comparable store restaurant sales by approximately 30 to 40 basis points, which was offset by favorability from the shift in the timing of the Christmas and New Year's holidays.

The increase in average check reflected menu price increases of approximately 2.2% and a favorable menu mix impact of 1.5%.

The second quarter mix favorability was driven primarily by our Crafted Coffee program, the growth of our off-premise business and our second quarter menu promotion.

We were again pleased with our off-premise business, which grew over 20% compared to the prior year and contributed to our comparable store sales results.

Second quarter comparable store retail sales decreased 1.4%, with decreases coming primarily within our holiday, decor, food and collegiate categories.

Moving on to expenses.

Total cost of goods sold in the quarter was 32.7% of total revenue versus 33.1% in the prior year quarter.

Our restaurant cost of goods sold was 26.3% of restaurant sales, a 20 basis point increase versus the prior year.

This increase was primarily due to menu mix.

On a constant mix basis, our food commodity costs were approximately 2% higher than in the prior year quarter, driven by increases in fruits, vegetables and eggs.

Our retail cost of goods sold was 55% of retail sales compared to 56.2% in the prior year quarter.

This decrease was primarily a result of a reduction in markdowns.

Our retail inventories at quarter-end were $111.1 million compared to $120.9 million at the prior year quarter-end.

Labor and related expenses were $276.8 million or 34.1% of revenue compared to $263.7 million or 33.5% of revenue in the prior year quarter.

This 60 basis point increase was primarily driven by wage inflation exceeding menu price increases and investments to support training initiatives and our off-premise business.

Other store operating expenses in the quarter were $156.8 million or 19.3% of revenue compared to other store operating expenses of $150.4 million or 19.1% of revenue in the prior year quarter.

This 20 basis point increase was the result of planned depreciation increases related to higher capital expenditures and increased supplies expense from growth in our off-premise business.

Store operating income was $112.9 million in the second quarter or 13.9% of revenue compared to store operating income of $112.7 million or 14.3% of revenue in the prior year quarter.

General and administrative expenses in the quarter were $36.2 million or 4.4% of revenue compared to $36 million or 4.6% of revenue in the prior year quarter.

Operating income was $76.7 million or 9.5% of revenue compared to operating income of $76.7 million or 9.7% of revenue in the prior year quarter.

Our EBITDA for the quarter was $102.9 million compared to $99.4 million in the prior year quarter.

Net interest expense for the quarter was $4.2 million compared to $3.7 million in the prior year quarter.

Our effective tax rate for the second quarter was 16.2% compared to a GAAP tax rate of negative 24.9% in the prior year quarter.

As a reminder, last year, in the second quarter, we were impacted by the Tax Cut and Jobs Act of 2017, which lowered the federal corporate income tax rate to 21% and resulted in us recording a provisional tax benefit for the remeasurement of deferred tax liabilities due to this rate change of approximately $25 million.

Turning to our balance sheet.

We ended the fiscal quarter with $169.6 million of cash and equivalents compared to $168.8 million at the prior year quarter-end.

Our total debt was $400 million at quarter-end.

With respect to our fiscal 2019 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.

We now expect total revenue of approximately $3.05 billion and comparable store restaurant sales growth for the full fiscal year in the range of 1% to 2%.

We now expect comparable store retail sales growth of approximately 1%.

We continue to expect to open 8 new Cracker Barrel stores in fiscal 2019.

We continue to expect increased food commodity costs on a constant mix basis of approximately 2% for the fiscal year.

We have locked in our pricing on approximately 55% of our commodity requirements for fiscal 2019 compared to 60% at this time last year.

We now expect depreciation expense of approximately $110 million for the year.

We continue to anticipate net interest expense of approximately $17 million.

We currently expect a GAAP effective tax rate for the fiscal year of approximately 17%.

We now anticipate that capital expenditures for the year will be approximately $150 million.

This reduction in CapEx guidance reflects updated expectations for the timing of initiatives, some of which we have delayed due to the prioritization of our Signature Fried Chicken initiative as well as the timing of new unit openings.

We now project approximately $10 million in business model improvements, resulting in sustainable cost savings.

We plan to invest in training and labor to support our Southern Fried Chicken initiative.

Additionally, we will be investing in advertising, and we expect a higher marketing spend in the back half of the year compared to the first half.

We also anticipate higher depreciation expense in the back half of the year, driven by the rollout of this initiative.

Taking these assumptions into account, we continue to expect full year operating income margin in the range of 9% to 9.3%.

We continue to expect to report full year earnings per share of between $8.95 and $9.10.

Lastly, I would like to point out that this guidance assumes normalized winter weather activity in the third quarter.

And with that, I will turn the call over to the operator so that we can take your questions.

Thank you very much.

(Operator Instructions) And our first question comes from Alton Stump with Longbow Research.

Just wanted to ask, obviously, it was a quite impressive comparable sales result on both a 1-year and 2-year [stack] basis sequentially.

We talked about some of the drivers of that, but could you just give me kind of a picture of how the competitive environment fared and if there was something else out there that enabled you guys to drive such a strong comp number in the quarter?

Alton, you cut out a little.

I think your question was, is there anything else that we can point to that helped us deliver the comps?

Yes.

Okay.

Well, I think it's what we talked about.

I was pleased in the quarter with the success of our promotion.

That Country Fried Turkey really resonated with our guests.

It was unique.

It was delicious.

It had strong both brand appeal and value scores.

I think our off-premise business, which is particularly strong in the second quarter, we had a number of initiatives to continue to grow it that I touched on.

The Heat n' Serve, we grew.

These holiday celebration meals were very successful, and we had strong growth in the individual To-Go.

So I think we were able to capitalize on the momentum in off-premise dining as well as to have some offers that fit both the need, especially of the holiday season, fit with our brand and fit with our type of food.

The Crafted Coffee initiative, I think that works particularly well in the cold months.

So we just -- we had a number of things that I think contributed to our performance over the quarter.

Helpful.

And then a quick follow-up, and I'll hop back in the queue.

Obviously, you had a sizable mix benefit here to comps in the quarter.

Is that something that we should expect could continue over the rest of the year?

Or was there something in 2Q that is not sustainable over the next 2 quarters?

Alton, this is Jill.

What I would say about the mix, I know we called out the components in my prepared remarks, but we clearly benefited in the second quarter from the growth in off-premise associated with catering and some of the side orders or add-ons that helped with that.

We also continued to benefit from the Crafted Coffee program, which was up about 50 basis points over prior year.

So I would say as you're looking out to the back half, as a reminder, we will wrap on the full year rollout of the Crafted Coffee program at the end of April.

So you'll see that incrementality start to dissipate.

And although we project to see off-premise grow in the back half, probably not to that same rate.

That said, we're excited about the introduction of our bone-in fried chicken, which should help increase the mix as well.

And our next question comes from Jake Bartlett with SunTrust.

I'm trying to understand, the 2019 same-store sales guidance for the restaurants implies a pretty sharp deceleration in the back half, I think just at the midpoint of guidance about just slightly positive.

But I'm trying to understand why that is, given the bone-in chicken rollout, given the momentum you're having with off-premise.

And maybe in the context of that, if you could kind of give us what the cadence of same-store sales were throughout the second quarter, maybe that would help us kind of understand your kind of entry point into the back half.

Great.

Jake, this is Jill, and I'll start with your first question.

So as you look at our updated guidance for restaurant sales for the back half of 1.2%, certainly, that incorporates the strong second quarter that we had.

As you look to the back half, we wouldn't expect off-premise to have as strong of an impact, although we're very excited about our bone-in fried chicken initiative that'll be launching.

And so what might help you, going to your second question, which is kind of the cadence of the quarter, so as we looked at the quarter, November was our strongest month that was driven both by our off-premise business and our in-restaurant experience, which was driven by the fried turkey that Sandy talked about.

As you look at December and January, we certainly -- we had a little bit of holiday shifting and some weather timing between those 2 months.

But when you adjust those 2 months, they were relatively in line with each other and we were pleased with their performance.

Got it.

And then in terms of your cost cutting, I think you've lowered a little bit here to $10 million from $10 million to $12 million.

How much have you realized in the first half of the year on your cost-cutting plans?

And how much -- I guess, that would tell us how much we should expect in the back half.

Okay.

So from the cost-cutting initiative, yes, we said that we expect this year approximately $10 million.

We brought that down a little bit because we delayed a couple of initiatives, the timing of the introduction of some of those initiatives to make more room for the launch of our bone-in fried chicken.

So for example, the timing of the POS and the tablets has been pushed out; that's also a part of the lower capital that we talked about.

And so then from a cadence standpoint, they're -- the first half and the second half are relatively similar, but we have slightly more in the back half.

Okay.

And then lastly, just touching on your -- on kind of your value initiative, the daily delights that helped in the first quarter.

Do you plan on running that again, promoting that nationally or across the system on television in the back half at some point?

Or if not, kind of maybe if you can describe why.

Sure, I'll take that Jake.

Thanks for the question.

Yes, we were very happy with the program in Q1 where we focused on our big biscuit products, and everyday value continues to be a core focus for our brand.

We consider the importance of providing value in the design of all of our marketing and culinary and operational programs.

And part of our marketing strategy is to reinforce price certainty to our guests by communicating those everyday price points that we feel is an appropriate approach.

We want to highlight not only price but quality and abundance of our meats -- our menu and retail offerings to focus on the differentiated guest experience.

So we'll continue to, when appropriate, apply those elements in the future.

And our next question comes from Bob Derrington with Telsey Advisory.

Jill, can you help us understand for a second, I think you mentioned that your sales guidance assumed, for the year or for the second half, assumes a normal weather pattern.

How would you describe the February pattern at this point relative to that?

We -- I think most of us know that we've had record rains and ice and snow in various parts of the country.

Is that considered to be normal?

Or what's your perspective there?

Yes, that's a great question.

So as we've looked at the quarter, the third quarter and the back half, as I said, we've assumed what we're calling a more normal weather.

What I would say is clearly February has seen more severe weather than what we would have seen in a more normalized weather, so our assumption assumes that the balance of the quarter will be better from a weather standpoint versus what we've seen and help make up some of this near-term impact that we've experienced in February.

Got you.

Sandy, could you give us some update on your view of how the rollout of I think it's called -- is it Southern Fried Chicken or Signature Fried Chicken, the program, and kind of your perspective on that?

Sure.

And it's -- the platform is Signature, but the particular offering of bone-in fried chicken is Southern Fried Chicken to differentiate it from our Homestyle, which is a boneless offering, which we currently serve only on Sundays.

Some people call it our Sunday chicken.

So I'm pleased with it.

We've got about 500 stores installed, about -- a little over 400 that are currently offering it.

I'm pleased with the enthusiasm of our field teams as they've gone through the training and implementation.

I'm really pleased with the performance of our facility teams as they have managed the installation of a very significant amount of equipment across the country, a lot of which had some challenging weather to operate in.

And I'm pleased with the guests' response, even initially without any marketing against it.

With that said, we'll be having the national launch here in May, and we'll be supporting it with some additional labor, some marketing.

And so there'll be a lot of focus on it, but overall, I'm pleased with where we are at this point.

I think on a per-store basis, it's a fairly substantial investment not only in the equipment but also in the training.

Is there other ways to leverage that investment beyond just bone-in chicken?

Are there other dimensions to it that we could expect over time?

Yes, that's why the platform is -- we have a different name for it.

The Signature, we'll be adding Homestyle Chicken.

The current offering, we do only on Sundays.

With our new equipment, we'll be able to offer that 7 days a week, so we'll be rolling that into the field.

It's currently being offered 7 days a week in about 45 stores.

That's a very popular offering, and we're pleased to be able to do it.

We'll be able to offer things like sandwiches.

Eventually, we can do hand-breaded dipped tenders with some rubs or flavorings.

So the culinary team has got some ideas and thoughts about how to build on this platform over the next several years, really.

And our next question comes from Gregory Francfort with Bank of America.

I had two questions.

The first is just on labor and margins.

And I guess, I would've thought on the comp, you might have levered that or maybe delevered it less.

And I think you talked about some new training and investments there.

How big of an investment is that?

And what's the timing of those investments that you're making?

Greg, this is Jill.

So as you look at second quarter operating margins, I'll give you some color, just kind of some puts and takes on the quarter.

So first of all, on cost of goods sold, that was slightly higher due to some of the items that we were selling, Country Fried Chicken and some of the off-premise around the Heat n' Serve occasion.

Particularly on labor, we have seen wage inflation creep up a little bit.

Within the quarter, it was 3.3%, which was a little bit higher than it had been in the first quarter, and we would expect some of that to continue.

But we have invested in areas around training.

We've also invested in our off-premise.

We've talked about a number of the different drivers for off-premise, that we've begun to ramp up some of those investments, specifically around delivery, some delivery drivers.

We have our catering sales managers.

So there's been some investment in labor in that area.

Along with off-premise, we saw an increase in our supplies, given the high level of sales versus prior year.

And then we had our planned increase in depreciation from the higher CapEx.

There were a couple of things that helped offset some of those investments in the second quarter.

Retail cost of goods sold were lower due to markdown usage.

We continue to see lower claims activity in our employee benefits, which was great news.

And then we talked about the fact that we have shifted some of our advertising.

So advertising was lower in the second quarter, and we'll see some of that spending in the back half, specifically in the fourth quarter, with the launch of our bone-in fried chicken.

Understood.

And then separate topic, just I think part of the reason you guys have been doing a big special dividend for the last few years is because a large shareholder of yours was right at the poison pill level.

Clearly, that is changing or has changed, and I'm curious what your thoughts are now that you may have more flexibility on your ability to buy back stock rather than use a dividend, and your thoughts on the pushes and pulls between the 2 ways to return cash to shareholders.

All right, I'll take that one.

So our board continues to have a balanced approach to capital allocation.

And just to review, first, reinvesting in the business is the #1 priority; second is a commitment to a competitive, sustainable, regular dividend; third is share repurchases, which to your point, have not really been available other than to cover dilution over the past few years; and then fourth, a special dividend is considered on a case-by-case basis.

I think the board regularly thinks about the subject of capital allocation.

It will -- the board will now have some new facts and to -- that were not previously -- and some options that were not previously available.

They'll consider all of that as they make their decisions about when and if we should do share buybacks and how and whether that will impact the special dividend program we've had.

And our next question comes from Stephen Anderson with Maxim Group.

Most of my questions have been answered, but I want to talk about some of the delay in the cost savings you contemplate.

Will that additional $2 million be allocated toward fiscal '19?

And as a result, do you see any pushing out of your originally scheduled $40 million in cost savings over the 3-year period?

That's a great question.

So as we look at our $40 million target, we still have confidence that we'll achieve that target.

And as we've talked about on previous calls, we said that originally we thought we'd get it over the 3-year time horizon, which would've gone through fiscal '20, now we think it may take an additional year or 2. But yes, we do believe that we will achieve the $40 million in cost savings.

And our next question comes from Jeff Farmer with Gordon Haskett.

Just a follow-up on off-premise.

You -- I think you said you grew this channel by 20% in the second quarter.

And I think you mentioned that the growth rate would slow in the back half of the year, but I'm just curious to what degree will it slow.

Could this be cut in half?

Just any color there would be helpful.

Yes, that's a great question.

So in the second quarter, overall, off-premise grew 200 basis points.

Last year, for the annual, we were at about 7.5% of sales, and this year, our hope is to approach 9% of sales.

Okay.

But specific to the second half, I mean, as you guys move past the holiday Heat n' Serve, could that growth rate quarter-over-quarter slow pretty materially?

You alluded to that.

I'm just trying to get a sense as to the order of magnitude.

Yes, so we would expect it to slow 50 to 100 basis points in terms of growth over prior year.

Okay.

And then last question, just further drilling down on Heat n' Serve, any impact that had on the same-store sales number.

Specifically in the context -- I think you guys had a 10% price increase on both the Thanksgiving and Christmas menu items.

So any color you can provide on the benefit to same-store sales in the quarter provided by Heat n' Serve.

Yes, I guess, as we look at off-premise, so all 3 channels grew.

So individual To-Go grew over 10%, and catering and our occasion grew 50%.

So they all relatively equally contributed to that overall growth.

(Operator Instructions) And our next question is a follow-up with Bob Derrington from Telsey Advisory.

Sandy, there had been some chatter at one time about the company's review of third-party delivery.

What's your perspective on that?

And can you give us any kind of color on whether the company continues to test that and any kind of future contribution from that?

We are.

We are currently in test and are pleased with the results.

We are -- and I'm not sure of the timing.

I know we are rolling it out to, over the next few months, to about 170 stores more, with the idea of getting it to not quite 400, I think, by the end of the year.

But overall, it will -- third-party delivery will be one component of the way that we offer off-premise dining to our guests.

Is the -- does that tie in or play into the rollout of the chicken product?

Is that expected to be a nice contributor to that?

Well, we see that fried chicken kind of lends itself to off-premise consumption.

And we've been thinking about the offer, whether it's a picnic basket type offer, for a family meal or a catering offer.

I do think it'll be popular as an individual To-Go item.

So -- but it -- that doesn't necessarily play into the third-party delivery in any unusual way.

And we have another follow-up question from Jake Bartlett with SunTrust.

I had just a follow up.

This is usually around the time where we start talking about the Campfire promotion in the fourth quarter and whether anything is different, you're going to do anything different this year than in years past in terms of the length of advertising, the timing.

Any commentary on that would be helpful.

Well, this year, we're not doing Campfire.

We're rolling -- that's our Southern Fried Chicken launch.

So we will be -- we're going to start the promotion a little bit sooner than we would've started Campfire.

We'll be supporting it with TV, and it'll really go through the whole summer.

But -- so there's no Campfire this year.

Got it.

And then I had a question about CapEx.

And so you've pushed off -- I believe, really, the difference here in the lowering is pushing out the POS rollout.

But if we think about the $450 million to $500 million guidance that we'd had from the Analyst Day in '18 and '20, has that just been compressed?

And what I'm really trying to get at is, does the spend that was expected in '19 really just go into '20?

Any sense you can give us as to what CapEx is in kind of the out years in terms of that kind of longer-term guidance?

Great.

Thank you, Jake.

So as we are looking at the CapEx for this year, we lowered it somewhat due to the initiatives, as you mentioned, kind of pushing those out.

Another piece of it was the timing of our fiscal '20 new restaurants for next year.

So originally, in our plan, we had some of those opening sooner in next fiscal year.

So we had more of the capital in this year.

So some of it is just the timing of that capital.

So I don't want to speak specifically to fiscal '20 in terms of timing from a capital standpoint, but that 3-year capital guidance of $450 million to $500 million over the 3 years is probably still in the appropriate range.

And our next question is another follow-up from Gregory Francfort with Bank of America.

I just had 2 quick follow-ups.

One was in terms of February and where we're trending, how much of the maybe pressure on the business do you think is due to tax refunds being down?

And as you've looked at kind of what you've seen, it seems like a lot of the tax credit for -- at least the child tax credit is going to come later in tax season.

Do you expect that to maybe sort of flip those refunds positively and impact your business positively?

Then I have a separate question.

Well, the tax refund question has been kind of complicated and confusing.

And I'm not sure we know where it's going to end up for all of our guests because I think for some of our guests, the refunds are coming later.

And we hope when they eventually come, that'll help.

For some of our guests, I think they're going to be lower.

Whether that's because they were -- the withholdings were changed and they were getting more income during the year and didn't notice -- and to what degree that's going to be a surprise.

And how that may or may not impact their spending, I think it's not clear to us yet.

But just generally, I think we are not looking for the tax refunds to be a big positive to our business at this point.

Understood.

I appreciate that because I've been as confused as anybody in trying to figure this -- all this stuff out.

So -- and then my other question was just on the coffee business.

I think you were talking about the contribution to mix this quarter.

Can you just talk about how that's -- how that rollout's kind of gone?

And what you're seeing in terms of customer adoption and how customers are using it?

Anything like that would be helpful.

So I can start, just to recap the financial mix.

So we've been pleased with the Crafted Coffee promotion.

So since we've rolled it out, it's consistently delivered approximately 50 basis points in mix.

So we believe those sales have been incremental to our overall coffee program, and the consumer feedback on the different offerings has been very positive.

And this concludes our question-and-answer session.

I would like to turn the conference back over to Sandy Cochran for any closing remarks.

Okay.

Well, thank you all for joining us today.

Cracker Barrel remains one of the strongest and most differentiated brands in the industry, and I'm confident that our strategy and business initiatives will continue to drive shareholder returns.

We appreciate your interest and support.

The conference has now concluded.

Thank you for attending today's presentation.

You may now disconnect.