Cracker Barrel 2014 Annual Report Download - page 18

We introduced some eye-catching color themes, with
bright décor, home goods, and women’s clothing, which
we believe resonated well with our guests. Additionally,
our merchandising team broadened the appeal of the
brand by sourcing products that have seasonal appeal and
reach across the generations and genders. Our women’s
apparel and accessories continued to be one of our
strongest selling categories. To build upon the strength of
this category, we introduced women’s footwear providing
depth to the assortment.
4) Apply technology and process enhancements to improve
the employee experience, the guest experience and
operating margins. At the beginning of 2014, we held a
General Manager’s conference. is conference provided
a platform for the introduction and training of several
new technology-based programs, including the second
phase of our labor management system. We also trained all
of our retail managers on improved selling techniques.
Other process and technology improvements during the
year included an enhancement to our food production
system to automate inventory labeling which resulted in
increased productivity and through-put which we
believe allows us to continue a very strong value platform.
Guest survey responses to overall value once again
measured a year-over-year increase.
5) Focus on enhancing long-term total shareholder returns.
In 2014, we increased our regular quarterly dividend,
continued to expand our store footprint, and began
extending the brand beyond our existing stores. In the third
quarter of 2014, we declared a 33% increase in our
regular quarterly dividend to $1.00. is marks the fourth
increase in the quarterly dividend since November 2011,
generating a total increase of 400% over that time period.
We opened seven new Cracker Barrel stores during the
year bringing our total store count at the end of 2014 to
631. In the rst quarter of 2014, we launched our
licensing platform with John Morrell Food Group under
our new trademark, CB Old Country Store™. We believe
that our licensed products have been well received
at the grocery stores, and at the end of 2014 we had
19 products available through our licensing program.
We believe the successful implementation of these ve
priorities resulted in our revenue growth during the year,
positive comparable store restaurant and retail sales for the
year with both comparable store trac and sales out-
performing the Knapp-Track™ Casual Dining Index for the
year, and higher operating margin and prot as compared
to the prior year. All of these were accomplished despite the
pressures from widespread discounting within the restau-
rant industry, the challenges from a continuing uncertain
consumer environment and severe winter weather.
RESULTS OF OPETIONS
e following table highlights operating results over the past
three years:
Relationship to Total Revenue
2014 2013 2012*
Total revenue 100.0% 100.0% 100.0%
Cost of goods sold 32.5 32.3 32.1
Gross prot 67.5 67.7 67.9
Labor and other
related expenses 36.0 36.5 36.8
Other store operating
expenses 18.9 18.2 18.0
Store operating income 12.6 13.0 13.1
General and administrative 4.8 5.4 5.7
Operating income 7.8 7.6 7.4
Interest expense 0.7 1.3 1.7
Income before income taxes 7.1 6.3 5.7
Provision for income taxes 2.2 1.9 1.7
Net income 4.9 4.4 4.0
* 2012 consists of 53 weeks while the other periods presented consist of
52 weeks.
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