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Financials - December 2020

Restaurant Industry in Free Fall; 10,000 Close in Three Months

Association to Congress: The whole industry needs a 'down payment' relief bill to make it to the new year

Dec 07, 2020, 09:00 ET

WASHINGTON, Dec. 7, 2020 /PRNewswire/ -- Today, the National Restaurant Association sent a letter to Congressional leadership, sharing new survey findings that illustrate continued business deterioration across the restaurant industry and offering support for the moderate compromise proposal as a 'down payment' toward a larger relief package in early 2021.

"What these findings make clear is that more than 500,000 restaurants of every business type—franchise, chain, and independent—are in an economic free fall," said Sean Kennedy, executive vice president for Public Affairs in the letter. "And for every month that passes without a solution from Congress, thousands more restaurants will close their doors for good."

The National Restaurant Association Research Group conducted the survey of 6,000 restaurant operators and 250 supply chain businesses Nov. 17-30, 2020, and the findings were stark:

  1. Eighty-seven percent of fullservice restaurants (independent, chain, and franchise) report an average 36% drop in sales revenue. For an industry with an average profit margin of 5%-6%, this is simply unsustainable. Eighty-three percent of fullservice operators expect sales to be even worse over the next three months.

  2. Although sales are significantly lower for most independent and franchise owners, their costs have not fallen by a proportional level. Fifty-nine percent of operators say their total labor costs (as a percentage of sales) are higher than they were pre-pandemic.

  3. The future remains bleak. Fifty-eight percent of chain and independent fullservice operators expect continued furloughs and layoffs for at least the next three months.

The tide of restaurants closures and bankruptcies continues to rise—sweeping away jobs in some of the most venerated independent and chain restaurants:

  1. As of today, 17% of restaurants—more than 110,000 establishments—are closed permanently or long-term.

  2. The vast majority of permanently closed restaurants were well-established businesses, and fixtures in their communities. On average these restaurants had been in business for 16 years, and 16% had been open for at least 30 years.

  3. Only 48% of these former restaurant owners say it is likely they will remain in the industry in any form in the months or years ahead. Our nation is losing a generation of industry talent, knowledge and entrepreneurial spirit.

"In short, the restaurant industry simply cannot wait for relief any longer," said Kennedy. "We appreciate the efforts of a group of moderate members of the House and Senate to advance a true compromise between the competing proposals from Democratic and Republican leaders. If this moderate plan represents a 'down payment' for a larger relief package in early 2021, it will provide restaurants with immediate relief to hold on through the most dangerous point in our business year."

In addition to support of the compromise proposal, the Association provided a plan for how a proposed second draw from the Paycheck Protection Program (PPP) could be strengthened to reflect the unique business model of the restaurant industry and highlighted other important measures in the proposal that would support restaurants in the short-term.

Read the full letter here and review the Association's full Blueprint for Restaurant Revival that includes the long-term recovery needs of the industry here.

About the National Restaurant Association

Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which comprises 1 million restaurant and foodservice outlets and a workforce of 15.6 million employees. We represent the industry in Washington, D.C., and advocate on its behalf. We sponsor the industry's largest trade show (National Restaurant Association Show); leading food safety training and certification program (ServSafe); unique career-building high school program (the NRAEF's ProStart). For more information, visit and find us on Twitter @WeRRestaurantsFacebook and YouTube.

View source version at National Restaurant Association

Cracker Barrel Reports First Quarter Fiscal 2021 Results

Comparable store restaurant and retail sales showed strong improvement over previous quarter

Dec 03, 2020, 08:00 ET

LEBANON, Tenn., Dec. 3, 2020 /PRNewswire/ -- Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the "Company") (Nasdaq: CBRL) today reported its financial results for the first quarter of fiscal 2021 ended October 30, 2020.

First Quarter Fiscal 2021 Highlights

  1. Comparable store sales improved significantly compared to the fourth quarter, as comparable store restaurant sales decreased 16.4% in the first quarter compared to a decrease of 39.2% in the fourth quarter, and comparable store retail sales declined 8.1% in the first quarter compared to a decrease of 32.3% in the fourth quarter.

  2. Comparable store off-premise sales grew 122% over the prior year quarter and represented approximately 25% of restaurant sales.

  3. GAAP earnings per diluted share were $7.18 compared to prior year quarter GAAP earnings per diluted share of $1.79. Adjusted earnings per diluted share were $0.69. (See non-GAAP reconciliation below.)

  4. Net income was $170.7 million, and adjusted EBITDA was $54.1 million. (See non-GAAP reconciliation below.)

Commenting on the first quarter results, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, "I'm pleased with the significant improvement we saw in both first quarter comparable store restaurant and retail sales compared to the previous quarter, and I believe these results reflect the effectiveness of our strategy and the strength of our brand. However, given the recent nationwide resurgences of COVID-19 and the resulting restrictions that have been imposed in many of our communities, our outlook remains cautious. While we anticipate headwinds in the coming months, I am confident that we have ample liquidity and the right plans in place to successfully navigate through the uncertain environment."

First Quarter Fiscal 2021 Results Revenue The Company's sales recovery continued into the first quarter, as both restaurant and retail sales saw strong improvements compared to the fourth quarter of fiscal 2020. The Company reported total revenue of $646.5 million for the first quarter of fiscal 2021, representing a decrease of 13.7% compared to the first quarter of the prior year. Cracker Barrel first quarter comparable store restaurant sales decreased 16.4% compared to the prior year quarter, which was comprised of an 18.3% decrease in comparable store restaurant traffic partially offset by a 1.9% increase in average check. Comparable store retail sales decreased 8.1% compared to the prior year quarter.

Cracker Barrel comparable store restaurant and retail sales for the third and fourth quarter of fiscal 2020 and the first quarter of fiscal 2021 were as follows when compared to the prior year comparable periods:

Third Quarter Ended 5/1

Fourth Quarter Ended 7/31

First Quarter Ended 10/30

Comparable store restaurant sales




Comparable store retail sales




Operating Income (EBIT), Net Income and Adjusted EBITDA GAAP operating income in the first quarter was $237.1 million, or 36.7% of total revenue. As previously disclosed, the Company closed a sale-leaseback transaction in August in which it sold 62 properties for a purchase price of approximately $150 million. Excluding the approximately $217.7 million gain on sale of assets from this transaction, approximately $3.2 million in non-cash amortization of the asset recognized from the gains on the sale-leaseback transactions, and approximately $5.2 million in expenses related to the proxy contest initiated by affiliates of Sardar Biglari in connection with the Company's 2020 annual meeting of shareholders, adjusted operating income was $27.7 million, or 4.3% of total revenue compared to prior year quarter operating income of $63.4 million, or 8.5% of total revenue. Net income was $170.7 million, or 26.4% of total revenue, and adjusted EBITDA was $54.1 million, or 8.4% of total revenue, in the first quarter. (See non-GAAP reconciliation below.)

Earnings per Diluted Share GAAP earnings per diluted share were $7.18 compared to prior year period GAAP earnings per diluted share of $1.79. Adjusted earnings per diluted share were $0.69. (See non-GAAP reconciliation below.)

Fiscal 2021 Outlook As a result of the pandemic, the sales performance of the Company's stores varies significantly and is heavily influenced by factors outside the Company's control, including, but not limited to, capacity restrictions, jurisdictional regulations, and the extent that the local economy is open. The Company anticipates these circumstances will continue for the foreseeable future, and, in recognition of this uncertainty, is not providing annual earnings guidance.

Quarter to date in the Company's second quarter of fiscal 2021, preliminary comparable store restaurant sales and comparable store retail sales each decreased approximately 20% compared to the prior year period.

Fiscal 2021 First Quarter Conference Call As previously announced, the live broadcast of Cracker Barrel's quarterly conference call will be available to the public on-line at today beginning at 11:00 a.m. (ET). The on-line replay will be available at 2:00 p.m. (ET) and continue through December 17, 2020.

About Cracker Barrel Old Country Store® Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) shares warm welcomes and friendly service while offering guests high-quality homestyle food and unique shopping — all at a fair price. By creating a world filled with hospitality through an experience that combines dining and shopping, guests are cared for like family. Established in 1969 in Lebanon, Tenn., Cracker Barrel and its affiliates operate more than 660 company-owned Cracker Barrel Old Country Store® locations in 45 states and own the fast-casual Maple Street Biscuit Company. For more information about the company, visit

View full version at Cracker Barrel

Zaxby’s Announces Strategic Investment From Affiliates of Goldman Sachs

November 19, 2020

Investment will accelerate Zaxby’s growth in existing and new markets

Athens, GA  (  Zaxby’s Operating Company L.P. (Zaxby’s) and its subsidiaries announced today that investment funds managed by the Goldman Sachs Merchant Banking Division (Goldman Sachs) will acquire a significant stake in the company. The partnership will support accelerated growth for Zaxby’s as well as expansion into new sales channels with a guest-focused strategy. The deal is expected to be finalized by year end 2020.

Zaxby’s, the fast-casual chain known for its chicken fingers, wings, and signature sauces, operates primarily in the Southeastern United States, with more than 900 restaurants in 17 states. Zaxby’s has delivered industry-leading comparable sales performance for three consecutive years, and there is unprecedented demand from franchisees to grow.

“I look forward to working with the team at Goldman Sachs to continue building the brand I founded 30 years ago in Statesboro, GA. This partnership symbolizes the strength of our Company and their involvement will accelerate our growth and expansion into a national brand,” said Zach McLeroy, Zaxby’s co-founder and CEO.

Zaxby’s will leverage Goldman Sachs’ vast resources to accelerate profitable growth for the brand and franchisees while keeping guests in the forefront.

“Zaxby’s is a fantastic company with a founder-led culture, loyal customers, and talented employees. We are excited to partner with the management team to provide long-term capital for their next phase of expansion,” said Nicole Agnew, managing director in the Goldman Sachs Merchant Banking Division. “We are confident we can grow the brand while remaining authentic to what people love about the restaurants.”

“I am excited to have a firm like Goldman Sachs joining the Zaxby’s family. This new partnership is a testament to what our employees and franchisees have helped us create thus far. Goldman Sachs’ knowledge and resources will help continue to build upon the strong foundation we have laid out,” said Tony Townley, Zaxby’s co-founder.

Morgan Stanley & Co. LLC and Stephens Inc. served as financial advisors to Zaxby’s. King & Spalding LLP and Fortson, Bentley and Griffin, P.A. served as legal advisors to Zaxby’s. Weil, Gotshal & Manges LLP served as legal advisor and Goldman Sachs served as financial advisor to Goldman Sachs Merchant Banking.

About Zaxby’s

Founded by childhood friends Zach McLeroy and Tony Townley in 1990, Zaxby’s is committed to serving delicious chicken fingers, wings, sandwiches and salads in a fun, offbeat atmosphere where customers are considered friends. Zaxby’s is headquartered in Athens, GA and has grown to more than 900 locations in 17 states. For more information, visit or

About Goldman Sachs Merchant Banking Division

Founded in 1869, The Goldman Sachs Group, Inc. is a leading global investment banking, securities and investment management firm. Goldman Sachs Merchant Banking Division (MBD) is the primary center for the firm’s long-term principal investing activity. MBD is one of the leading private capital investors in the world with investments across private equity, infrastructure, private debt, growth equity and real estate.

View source version at Zaxby's

Jack in the Box Inc. Reports Fourth Quarter FY 2020 Earnings; Declares Quarterly Cash Dividend

November 18, 2020 04:05 PM Eastern Standard Time

SAN DIEGO--(BUSINESS WIRE)--Jack in the Box Inc. (NASDAQ: JACK) today reported financial results for the fourth quarter and fiscal year ended September 27, 2020.

Increase in same-store sales:

12 Weeks Ended

52 Weeks Ended

September 27, 2020

September 29, 2019

September 27, 2020

September 29, 2019
















Jack in the Box® system same-store sales increased 12.2 percent for the quarter. Company same-store sales increased 9.6 percent in the fourth quarter driven by average check growth of 21.9 percent while transactions decreased 12.3 percent. Improvement in company same-store sales as compared with the third quarter was primarily driven by a sequential improvement in transactions.

Darin Harris, chief executive officer, said, "Our ongoing strategy of offering guests value combined with indulgent and flavorful products continues to drive overall performance for the brand. I am proud of the way our franchisees, the teams in our restaurants, our employees, and our partners have remained focused amidst this pandemic, and are delivering outstanding results. This momentum has continued into the first quarter of 2021, and I look forward to building on these learnings to enhance long-term performance of the company."

Earnings from continuing operations were $37.9 million, or $1.65 per diluted share, for the fourth quarter of fiscal 2020 compared with $22.0 million, or $0.86 per diluted share, for the fourth quarter of fiscal 2019.

Operating Earnings Per Share(1), a non-GAAP measure, were $1.61 in the fourth quarter of fiscal 2020 compared with $0.95 in the prior year quarter. A reconciliation of non-GAAP Operating Earnings Per Share to GAAP results is provided below, with additional information included in the attachment to this release.

12 Weeks Ended

52 Weeks Ended

September 27, 2020

September 29, 2019

September 27, 2020

September 29, 2019

Diluted earnings per share from continuing operations – GAAP





Loss on early termination of interest rate swaps and debt extinguishment



Restructuring charges




Gains on the sale of company-operated restaurants









Gain on sale of corporate office building



Pension settlement charges



Excess tax benefits from share-based compensation agreements





Operating earnings per share – Non-GAAP (1)





Adjusted EBITDA(2), a non-GAAP measure, was $78.4 million in the fourth quarter of fiscal 2020 compared with $66.9 million for the prior year quarter. For fiscal year 2020, Adjusted EBITDA was $274.2 million, compared with $269.0 million in fiscal year 2019.

Results for the fourth quarter reflect the business and financial impacts of the COVID-19 pandemic, which include the following:

  1. Restaurant traffic declined substantially, although did improve versus the third quarter. Check growth continued to drive overall same-store sales growth.

  2. Higher costs for delivery fees and supplies related to COVID-19 negatively impacted Occupancy and other costs as a percentage of company restaurant sales by approximately 90 basis points.

  3. The company continued its short-term cash preservation strategy, and as such, did not buy back any shares in the fourth quarter. The company also significantly reduced capital spending.

Restaurant-Level Margin(3), a non-GAAP measure, increased 280 basis points to 27.0 percent of company restaurant sales in the fourth quarter of fiscal 2020 from 24.2 percent a year ago. Labor costs improved by 120 basis points, due to sales leverage, which was partially offset by approximately 6 percent wage inflation. Food and packaging costs, as a percentage of company restaurant sales, decreased 100 basis points driven by menu price increases and positive mix shift, which more than offset higher ingredient costs. Commodity costs increased 0.4 percent in the quarter as compared with the prior year. Lower maintenance and repairs expenses, partially offset by higher delivery fees, drove the 50 basis point decrease in Occupancy and other versus the prior year quarter.

Franchise-Level Margin(3), a non-GAAP measure, increased by $11.6 million in the fourth quarter, primarily driven by higher royalties and rental revenues as franchise same-store sales increased. The company did not provide any relief to franchisees through postponements or reductions of rent or marketing in the fourth quarter.

Franchise-Level Margin(3), as a percentage of total franchise revenues, was 41.3 percent in the fourth quarter of fiscal 2020. The company adopted the new lease accounting standard, ASC 842, in fiscal 2020, which resulted in grossing up both franchise rental revenues and franchise occupancy expenses by approximately $9.5 million in the fourth quarter. Without these adjustments, Franchise-Level Margin(3) would have been 43.7 percent of total franchise revenues. This compares with 40.8 percent in the prior year.

In the fourth quarter of fiscal 2020, SG&A expenses increased by $4.4 million and were 5.8 percent of revenues compared with 4.7 percent in the prior year quarter. Advertising costs, which are included in SG&A, increased $0.4 million in the fourth quarter.

As a percentage of system-wide sales, G&A was 1.1 percent in the fourth quarter of fiscal 2020 compared with 0.8 percent in the prior year quarter. The $4.0 million increase in G&A, which excludes advertising, was primarily driven by:

  1. an increase in costs related to litigation matters of approximately $3 million, which was largely driven by a reduction in an unfavorable jury verdict in the prior year quarter, partially offset by a favorable settlement in the current year quarter;

  2. an increase in incentive compensation of approximately $0.3 million as a result of higher achievement levels, partially offset by a decrease in share-based compensation; and

  3. a $0.8 million increase in insurance.

  4. These increases were partially offset by mark-to-market adjustments on investments supporting the company's non-qualified retirement plans resulting in a $0.7 million year-over-year decrease in G&A.

Impairment and other charges, net, decreased $5.5 million in the fourth quarter, driven by a charge in the prior year quarter associated with a write-off of development costs associated with a discontinued technology project and a decrease in restructuring costs.

Interest expense, net, decreased by $2.1 million in the fourth quarter driven by the $2.8 million write-off of unamortized deferred financing fees related to the refinancing of the company's senior credit facility in the prior year quarter, partially offset by higher borrowings in the quarter.

The effective tax rate for the fourth quarter of fiscal year 2020 was 23.6 percent, which was lower than the 27.4 percent in the fourth quarter of the prior year primarily due to the release of valuation reserves on state tax credits and the tax benefit from anticipated audit conclusions and amended returns, partially offset by an increase in deduction limitation on officers’ compensation and non-deductible legal settlements. The full year effective tax rate was 26.8 percent.

View full version at Jack in the Box

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