Cracker Barrel 2010 Annual Report Download - page 14

Not only did we grow our top line in 2010, we also
strengthened our business model by aacking costs through
both structural improvements and capturing the benets of
a favorable external environment. All of this was reected in
our strong nancial results. We reported 2010 EPS of $3.62,
up 25 percent from scal 2009. Revenue from continuing
operations increased 1.6 percent to $2.4 billion. Comparable
store restaurant sales increased 0.8 percent (including
the eect of a 2.0 percent higher check) from scal 2009,
and comparable store retail sales were down only 0.9 percent.
During the year, we opened net ve new Cracker Barrel
Old Country Store locations, expanding our chain to 593 units
at year-end.
We improved our operating margins to 6.8 percent,
compared with 6.0 percent in 2009. Eective execution of our
purchasing strategies led to a 2.5 percent reduction in our
food commodity costs in 2010. In the retail business, beer
merchandising meant that we took $18 million less in
markdowns for the year. We beneted from a reduction in
store management stang in our lower volume stores
under new operating standards, and beer productivity and
a new healthcare benets plan implemented at mid-year
helped reduce labor costs and related expenses overall.
e resulting 18 percent improvement in store operating
income allowed our store managers to earn higher bonuses,
improving management turnover and morale that, in turn,
positively aect our guest experiences. Importantly,
our improved guest satisfaction scores show that managing
the business tightly never jeopardized the all-important
guest experience.
While prots are a key measure of our success, cash
ow is the lifeblood of any company. Net cash from operating
activities was $212 million, which more than funded
$70 million of capital expenditures. During 2010,
we paid aggregate dividends of $0.80 per share for a total
$18.5 million, reduced our debt by $65 million,
and repurchased 1.35 million shares for $62.5 million.
More Growth at the Front of the Store
ere aren’t too many other places these days other than
Cracker Barrel where you can walk right into an old
fashioned country store. is atmosphere creates a strong
emotional connection with the past, a signature of our
brand. With almost 1,000 guests per day in each of our stores,
we have the opportunity to oer a wide variety of gis,
snacks and impulse items to a large number of people.
Today, our new mix of merchandise seems to be on the
right track. More guests are making purchases. Importantly,
we are operating at very ecient inventory levels. We are
executing a number of strategies that we believe will drive
continued growth in our retail business.
e Great Gis program that we introduced in 2010
crossed a number of merchandise categories. It included
picture frames over the Summer with a military theme
and frames for three and four generational pictures around
Mother’s Day. Pajama sets were very appealing at both
Christmas and Mother’s Day. Gis of Cracker Barrel-
branded food products and collegiate oerings worked for
every occasion. Motion toys, such as the Roll-Over
Laughing Dog and Animated Pet Fish, and musical toys
were also very popular throughout the year.
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