Cracker Barrel 2009 Annual Report Download - page 39

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dining habits. Historically, interstate tourist traffic and
the propensity to dine out have been much higher during
the summer months, thereby attributing to higher
profits in our fourth quarter. Retail sales, which in
Cracker Barrel are made substantially to restaurant
customers, are strongest in the second quarter, which
includes the Christmas holiday shopping season. Severe
weather also affects restaurant and retail sales adversely
from time to time.
Key Performance Indicators
Management uses a number of key performance measures
to evaluate our operational and financial performance,
including the following:
Comparable store sales and restaurant guest traffic
consist of sales and calculated number of guests,
respectively, of units open at least six full quarters at the
beginning of the year; and are measured on comparable
calendar weeks. This measure highlights performance
of existing stores because it excludes the impact of new
store openings.
Percentage of retail sales to total sales indicates the
relative proportion of spending by guests on retail
product at Cracker Barrel stores and helps identify overall
effectiveness of our retail operations. Management uses
this measure to analyze a store’s ability to convert
restaurant traffic into retail sales since we believe that
the substantial majority of our retail guests are also
guests in our restaurants.
Average check per person is an indicator which
management uses to analyze the dollars spent in our
stores per guest on restaurant purchases. This measure
aids management in identifying trends in guest
preferences as well as the effectiveness of menu price
increases and other menu changes.
Store operating margins are defined as total revenue
less cost of goods sold, labor and other related expenses
and other store operating expenses, all as a percent
of total revenue. Management uses this indicator as a
primary measure of operating profitability.
RESULTS OF OPERATIONS
The following table highlights operating results over the
past three years:
Period to Period
Relationship to Total Revenue (Decrease) Increase
2009 2008
2009 2008 2007 vs 2008 vs 2007
Total revenue 100.0% 100.0% 100.0% (1)% 6%
Cost of goods sold 32.3 32.4 31.7 (1) 4
Gross profit 67.7 67.6 68.3 — —
Labor and other related
expenses 38.7 38.2 38.0 1 2
Impairment and store
closing charges 0.1 — — 138 —
Other store operating
expenses 17.8 17.7 17.4 — 3
Store operating income 11.1 11.7 12.9 (6) (9)
General and administrative 5.1 5.4 5.7 (6) (7)
Operating income 6.0 6.3 7.2 (6) (10)
Interest expense 2.2 2.4 2.5 (9) (3)
Interest income — — 0.3 (100) (98)
Income before income taxes 3.8 3.9 5.0 (4) (20)
Provision for income taxes 1.0 1.2 1.8 (15) (30)
Income from continuing
operations 2.8 2.7 3.2 1 (14)
(Loss) income from
discontinued operations,
net of tax — — 3.7 (112) (100)
Net income 2.8 2.7 6.9 1 (60)
Total Revenue
The following table highlights the components of total
revenue by percentage relationships to total revenue for the
past three years:
2009 2008 2007
Total Revenue:
Cracker Barrel restaurant 79.2% 78.5% 78.4%
Cracker Barrel retail 20.8 21.5 21.6
Total revenue 100.0% 100.0% 100.0%
The following table highlights comparable store sales*
results over the past two years:
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