Good day, and welcome to the Cracker Barrel Second Quarter Fiscal Year 2022 Earnings Conference Call. All participants will be in listen-only mode. Please note that this event is being recorded. I would now like to turn the conference over to Jessica Hazel, Head of Investor Relations. Please go ahead.

Thank you. Good morning, and welcome to Cracker Barrel's second quarter fiscal 2022 conference call and webcast. This morning, we issued a press release announcing our second quarter results. In this press release and on this call, we will refer to non-GAAP financial measures for the second quarter ended January 28, 2022. The second quarter non-GAAP financial measures are adjusted to exclude the non-cash amortization of the asset recognized from the gains on our sale and leaseback transactions and the related tax impacts. The Company believes that excluding these items from its financial results provides investors with an enhanced understanding of the Company's financial performance. This information is not intended to be considered in isolation, or as a substitute for net income, or earnings per share information prepared in accordance with GAAP. The last pages of the press release include reconciliations 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, Craig Pommells; and Senior Vice President and CMO, Jen Tate. Sandy will begin with a review of the business, and Craig will review the financials and outlook. We will then open up the call for questions for Sandy, Craig and Jen. 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 furnished 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?

Thank you, Jessica. And good morning, everyone. This morning, we announced total revenue growth of 6.2% compared to the second quarter of fiscal 2019. Comparable store restaurant sales versus the same period grew by 1.9% and comparable store retail sales grew by 13.7%. I'm pleased with the work of our teams to deliver strong sales growth over pre-COVID levels. I want to start by highlighting what we did to drive our sales recovery in November and early December. Cracker Barrel has always had a strong connection to the holiday season and this quarter we reinforced that connection through our culinary off-premise, retail and marketing efforts. On the culinary front, our second quarter menu promotion featured our new limited time offering Cinnamon Roll Pie, and our seasonal favorite Country Fried Turkey, which significantly outperformed our seasonal LPOs from last year. Our offer in this business maintained approximately flat sales to the prior year second quarter, when nearly 20% of our stores were operating off-premise only for at least a portion of the quarter. Our Thanksgiving and Christmas heat n’ serve offerings delivered modest year-over-year sales growth on a combined basis and our catering offerings significantly outperformed our expectations. Our retail business delivered its fourth consecutive quarter of double digit comparable sales growth versus fiscal 2019. We saw strength in our Christmas themes as well as an everyday categories such as candy and toys. We also drove growth in some categories that we expanded during the pandemic such as our collegiate assortment, which we now sell year round and in men's apparel category that we continue to expand. Our retail performance was particularly encouraging in light of the challenging supply environment. And our retail teams did a great job navigating shipping challenges, minimizing delays and driving sales during the quarter. We're optimistic…

Thank you, Sandy. And good morning, everyone. For the second quarter, we reported total revenue of $862.3 million. Restaurant revenue increased 25.9% to $656.1 million, and retail revenue increased 32.2% to $206.2 million versus the prior year second quarter. Compared to the second quarter of fiscal 2019 comparable store, restaurant sales increased to 1.9% and comparable store retail sales grew by 13.7%. Our total pricing for the quarter was 5.3%, which reflects slightly over 2% carried pricing for fiscal 2021 and slightly over 3% from our August price increase. We are comfortable with the elevated pricing in this current environment and continue to see minimal impact to traffic and mix from our pricing actions. This pricing partially offset the impact of 8.5% commodity inflation and 10.8% hourly wage inflation during the quarter. Comparable store off-premise sales grew by 123% over the second quarter of 2019. And were 24% of restaurant sales for the quarter. As Sandy mentioned, we also held off-premise sales nearly flat to last year, significantly exceeding our expectations for off-promise retention. Both third party delivery and catering sales produced a meaningful growth over the prior year, which offset modest declines in our individual to go channel. Moving to expenses. Total cost of goods sold in the quarter was 32.9% of total revenue versus 33.2% in the prior quarter. Restaurant cost of goods sold was 27.4% of restaurant sales versus 26.9% in the prior year quarter. This 50 basis point increase was primarily driven by commodity inflation in excess of pricing during the quarter. Retail cost of goods sold was 50.4% of retail sales versus 54.3% in the prior quarter. This 390 basis point decrease was primarily driven by continued sell-through of inventory at higher levels, which resulted in lower markdowns that we have historically. I've been pleased…

Our first question will come from Brett Levy with MKM Partners.

Great. Thanks. I guess just first clarification, just did you say that you expect fourth quarter margin, operating margin to be in line with fiscal fourth quarter from last year? And then if you could give a little bit more color just on what you are seeing across cohorts across regionality, just on the trends that you've seen, and the timing and magnitude of the recovery of post COVID?

Okay, great. Good morning, Brent, I'll start and then let Craig speak to the guidance point. In general, we are seeing some regionality and historically or in the past few months and assume that it is been primarily related to how those regions experienced COVID and Omicron. We've seen some strength in the southeast, in particular, Texas, Florida, slightly softer in the Midwest and Northeast, as we've seen it go through.

Yes, thanks, Sandy. And on to the operating income margin or adjusted operating income margin. I think the key there is we expect FY22 Q4 to approach FY21 Q4, so get in into that range, but approaching it, versus necessarily being there.

I think, Brett, to the other issue that we've experienced recently, the weather really had impacts in some parts of the country more than others. So that's also having an impact on the results, although, generally speaking, the recovery has been broad based.

And then just one quick question on the labor front. You talked about training. Where are you right now in terms of staffing levels? Ease in hiring or challenges in hiring, retention levels, turnover, and things of that nature? And can you parse out what you spent in overtime and training this quarter just as a color commentary? Thanks.

I think you asked for every metric of hiring, staffing and retention there, that there is -- let me just to address it overall. So in terms of overall in the labor market, we are seeing increased applicant flow, which has been encouraging so we're able to be more selective in our hiring decisions. The workforce, sort of does appear to be returning back to the job market, although I suspect the restaurant industry is going to be more challenged in comparison to other sectors. In general, in terms of our performance, I think our operators and our HR team has done an amazing job of getting staffed, we really only have a handful of stores. And I would guess that sort of in the neighborhood of 10 that I would call critically understaffed. As we've mentioned on the last call, we feel really good about our back of the house staffing, and where we did see a shortage was in the server position. And I suspect that still where it is, so we'd like to add additional servers across the chain In terms of turnover, it's higher than it has been historically for us at both the manager level and the hourly. And but we believe we are still underperforming the turnover that the industry overall is experiencing. I heard a statistic yesterday that I was really encouraged by which is we've had incredibly high retention of our most tenured employees, which are -- we call them our par fours. Those are the employees on our teams that were four stars on their aprons and had been with us for a number of years. And we have been very successful in retaining that core group of really important employees. So I feel confident that our team will be able, now that we can get staffed and we're focused on training and bringing our new employees along that we will be in a position to as guests want to come back with us as we are heading into now our busy period that we will be ready.

And, Brett, I'll build on that a little bit. This is Craig. So Q2 was very really interesting. You have November, December and January, which was a lot of noise because of the call outs and so on. But I would say we are in a much better staffing position today. And overall, on average for our Q2. So because of that we have more managers, we have more quality employees, our applicant flow is really good. So all of that really helps. But from a cost perspective, our costs are a little bit higher, because we are fully staffed and we were not real close, almost fully staffed than we were not previously.

Our next question will come from Jake Bartlett with Truist Securities.

Great, thanks for taking the question and I had a question first on the sales guidance. My rough estimate is and maybe if you could, I'd love you to confirm, but same store sales would be maybe 3.5% to 4% versus ‘19 levels, maybe if you can confirm that, that kind of acceleration from the 1.9. And also just trying to help us understand, what that implies for the rest of the quarter? You mentioned that sales have been recovering as Omicron stated, are you back to the level you were pre COVID or pre-Omicron yet, and just trying to understand that the cadence of the expectation in the third quarter.

Thanks Jake. This is Craig. So let me start with February, so February started out in line with really the second part of January. However, we will say that as we've moved into the second part of February, it looks much closer to pre-Omicron. It is -- so I don't know that we can 100% say that we're all the way there as yet. But I'll tell you that, as we've moved into the second part of February, we are -- it looks very similar to pre-Omicron. And as it relates to the Q3 comp guidance, I think what we would say is rather than given the precise comp number is we've given precise number on the revenue, but it's really this kind of gradual progression is what we're expecting, we do expect that it's going to be a little bit lumpy, I think you've astutely and determined that the first part of February was probably lower than that. So everything you're saying there, I think I won’t -- it generally, the $800 million, I think would imply that we have an ongoing improvement as a quarter progresses.

Great. Thanks. And my next question is on the pricing that you talked about, one, I just want to confirm, what actual level of pricing we should see in the third quarter and the fourth, maybe fourth? I think you mentioned, the combination of the two, I just want to make sure I understood the cadence of the actual pricing in the third quarter and then in the fourth. And then, as part of that question, I'm also I think one concern would be that you cater to a somewhat lower income consumer, is that consumer going to push back if your pricing gets too high. And so I want to just ask you about your confidence in taking that price, maybe any commentary that you're -- whether you're still seeing trade up within the menu and very little pushback. And so just your level of competence that your consumer won't push back. And also just the detail in the third versus fourth quarter price.

So let me start, it sounds like there's a lot in that question, Jake. So it probably I'll start, maybe Jen can add some color to our thinking and confidence behind how we are approaching pricing and then Craig you can if you're willing to give any additional color. So first of all, I think that we are and continue to be really thoughtful about pricing and how we have made these decisions. But one thing about this quarter and Jen will explain in a little more detail. Instead of doing two big increases, which is historically what we have done. Now we're doing more small incremental pricing moves, to give ourselves the opportunity to monitor the results of the pricing changes to evaluate where we believe that consumers are in terms of their ability to and their reaction to them, and to continue to monitor the consumer as we move forward. So the pricing guidance that was included, I don't know how much you're going to be willing Craig to break it down. But why don't first Jen, you want to give some additional color on the thinking?

Yes, absolutely. I think just to build on what Sandy said, we are breaking our pricing into several small surgical price increases. And that gives us the ability to continue to very carefully monitor the guests’ reaction versus our control group. And that gives us the flexibility to if at any time we see an adverse impact on traffic, or mix to cancel or change any of those additional pricing actions. So I think that's very important to us. And so instead of one in the third quarter or one in the fourth, we have more small surgical, a couple in the third, a couple in the fourth, which gives us a lot of flexibility. And then, we have such strong equity in the area of everyday value that we've built over the years, offering high quality home-style food at a fair price. And we've never relied on LTO deals or couponing. So that is absolutely something we're committed to. And so that gives us confidence that by protecting the everyday value platforms that we have on our menu, that every guest in any cohort will be able to walk in, in any day part in find that outstanding everyday value. Just as an example, if you come in at breakfast, you're still going to see the sunrise specials section, which are at breakfast at $5.99. If you come in at lunch, you're still going to see the weekday lunch features at just $6.99. These are not obscure things. These are classics like meatloaf and chicken and dumplings and broccoli cheddar chicken, lunch or dinner, Cracker Barrel favorites. These are things like chicken and dumplings at $7.99 or hand breaded chicken tenders with two sides at $8.99. So they're core favorites broadly appealing high mix items that are at these everyday values. So I think, because we're protecting those, and we're committed to we feel like our guests are still going to know us as a destination for everyday value.

And this is Craig, Jake, go ahead.

No, I think you're hopefully you're going to ask the questions I was about to ask.

Yes. So I think what implied in that as well is because there are multiple pricing actions there that will be a little bit below 6 in Q3. And on average, we'll be a little bit above six, but we'll be below that in Q3 and a bit above that in Q4, but we're also keeping our optionality open as it relates to Q4 as well, just to see how things develop. We're continuing to read our pricing tests, which have done very, very well. So but we're keeping our options open. So a little bit lower Q3, a little bit higher Q4.

Thank you. And then real quick. I don't see it in the release. Maybe I'm missing it. But did you provide what transactions were in the quarter just so we can kind of back into the next transaction growth was?

We don't disclose that.

No, I thought we did in the first quarter. But we can follow up. But thanks.

Our next question will come from Alton Stump with Loop Capital.

Thank you and good morning. Congrats on the quarter and it was obviously a very challenging environment. Just wanted to ask, on the labor front, there was a lot of news industry wide, heading into the holiday season that there was, a pretty massive shortages. That's obviously a big time of the year for you guys during fiscal 2Q, how were you able if you were able to kind of manage through that process, particularly during the holiday season?

Yes, it was challenging more. Let me back up, Alton. We went into the quarter I think I said on our last call, feeling really good about the progress that our operators and HR teams were able to do in staffing and had really gotten down to a relatively small number of stores that we thought were critically understaffed. Probably the bigger issue that we had to contend with, particularly as we got into December and January were the COVID call outs, or the call outs which is when you staffed but you are not able to schedule the employees to meet the demand. So it's difficult to precisely measure that since we don't have a direct measure, it's really we estimated from something we call a missed shift percentage. But we know that it impacted stores in some cases quite meaningfully and resulted, in some cases, we had to close early, in some cases, we had to close dining rooms, in some cases, we had to actually go to off-premise only for a brief period of time, while that particular store recovered, it's a little bit hard to measure too because in a lot of cases, where that was happening in the store, it was also happening in the community. So there was an impacting consumer demand. The good news is that we have seen a market decrease in the level of call outs in the second half. And as we've moved into February, and as Craig mentioned, as we're seeing our sales performance improve, which we believe is partly because consumers are more comfortable going out and it is also because I believe our stores are in a better position to staff to accommodate the demand.

Understood. Thank you for that color, very helpful. And then as much as Sandy, just on a weather front had un-seasonally warm of course, November, December kind of Eastern half the country, but has since turned very cold. So semi, Is there any way -- as a way to quantify how much of an impact you think that might have had either on January or on your February sales versus what you saw during the first two months of fiscal 2Q.

We do look at it internally and obviously the stores that are closed we can pretty easily measure because we can isolate those and to your point we had several severe storms in our core markets in January, the harder thing to measure, though, are the secondary implication. So we've found in the past, or we suspected in the past that when it gets really cold, that actually chill out, it's a bad word, that impacts the consumer feeling. And older guests’ willingness to go out, we know that it might impact travel. So although we can measure a store that's closed in Dallas, we can't necessarily measure the store that they were heading to if they'd made their trip and would have dined with us along the way. And so, we do believe that the storms had the biggest impact on us in January, in terms of the whole quarter. But beyond that, I don't think we're putting a number to it.

Yes. I think I agree, Sandy, it's definitely January, multiple impacts in January, kind of combined with COVID, call out and all these things. So we've just decided not to really put a number to January.

Our next question will come from Todd books with Benchmark Company.

Hey, good morning, everybody. And congratulations on fighting through what I'm sure was a brutal quarter operational here. So well done. Couple quick questions, if I may. One, Craig, for you. The concept of by Q4 moving back kind of towards the 8% operating margin seen in Q4 last year, I guess how much that we have line of sight visibility on, so if we can talk about maybe the improvement that's being seen from food cost management and what that piece is or what the better labor efficiency is anticipated to be, versus what still has to happen as far as you need to be right on the inflationary outlook and looking for some easing there in Q4. Just would like to get some surety on the visibility of getting back towards that operating margin.

Absolutely. So good question, Todd. On, so there are few pieces, the food cost is known. The inflation while not 100% we're 40% locked for the second half, and it's just closer in. And we have a number of other solvers around productivity and so on that we think are reasonable. So we're not necessarily bet in the farm, so to speak on those things. And then pricing is something that while there is a little bit of an optionality there, it's mostly known. So we feel confident now, what could happen there, what could really go sideways, we are assuming that the summer travel season returns to closer to historical norms. And which implies that there's not another massive externality that would prevent that from happening. So that's probably at this point. Nothing's for certain, but I think that would be the biggest variable, as we think about Q4 and our confidence in it.

Okay, great. And then summer travel season returning to normal, I guess, how are you guys thinking about the impact of high fuel prices? And especially with some of the global tensions if those spike higher is that a delta point to the potential outlook or getting back towards that profitability in Q4?

It's, yes, gas prices, as we've said quite often, it's probably less about miles driven as it is about the impact they have on discretionary income. And so the kind of inflation that consumers are experiencing now in a lot of places, including gas prices, is something we're keeping an eye on. And that's the kind of thing that is Craig mentioned. And Jen mentioned, as we think about our pricing strategy, being cognizant that consumers although many of them are experiencing higher wages, those are being more than offset on their everyday expenses, like fuel, rent and all the other things so we're monitoring it and we'll, what we're hoping it or assuming is that the consumer there's still quite a bit of savings still that maybe happened during the pandemic, that there was a lot of improvement to guess, balance sheet individual's balance sheet as they say that there's a still is a huge interest and excitement about getting out and seeing the people that they haven't seen and taking the family vacation. And that all of that will offset these other pressures as they work through high inflation and an absence of stimulus money.

Agree, Sandy, so it's to some degree, I think we believe that folks have gotten more used to generally higher inflation right now. So we think that will mitigate what we would normally see at these type of gas price levels. Now, if gas prices go up significantly from here that could change the outlook. But I think our thinking is in the context of generally broader inflation, that those two things will kind of mostly mitigate each other, but we'll see.

Okay, great. And the final one for me, and I'll pass it along. If we look to the second half of this fiscal year, Craig, just can you give us some color guidance around level of G&A needed to support what you're trying to do in the business? And what I'm just trying to parse out is, I think you called out even in your comments that there were some temporary staffing and recruitment costs in the January quarter. I imagine there was some friction in Q in the October quarter as well, as you guys were trying to ramp staffing efforts back up, what sort of G&A do we need in the second half to support the business?

Yes, so it's a good question, I would say we are, there continues to be a number of these kind of puts and takes here. And there are a number of short-term pressures on G&A, including the staffing because while we are staffed, you have turnover, for example, that's still elevated. So that applies some -- that applies some pressure, we're still not at 100% with beer and wine, there are some costs there. And our technology enablers for productivity and a number of other initiatives. Those are still investments that we think are barely, very value creating. And so we think the G&A numbers still has some investments in it. Sandy, anything you would add to that?

No, I think. And the only other point is that we're ramping up Maple Street's infrastructure to support their growth, which is also kind of a new number versus ‘19, and an additional G&A. But that we think is important to support the longer term growth initiatives.

Our next question will come from Brian Mullan with Deutsche Bank.

Hey, thank you. Just a big picture question on your margins, if we were to say that fiscal ‘23 was a truly normalized year from a staffing perspective, also consumer demand perspective, how much of those fiscal 2019 sort of little margins do you think could be recaptured at this point? I know, in the prepared remarks, you spoke to some cost initiatives. I'm curious, is there a specific targets you have in mind or that you will even attempt to manage the business to as you implement those initiatives or future pricing decisions? Just any kind of framework?

Yes, I think, we're not really, as it relates to FY23, we're certainly doing a lot of work on it. But we're not really in a position to disclose our targets as yet publicly. Needless to say, there is a lot going on behind the scenes to prepare us for that.

Okay, understood, thank you for that. And then just a question on developments between Maple Street, Sandy, you just referenced it. It sounds like you're going to open between 9 and 11 in the back half of this year, I guess, two part, one, is 15 still the right number to expect for next year, 15 years, and then two, what we'd be watching over these next 18 months with the openings that could influence how many units you want to open over the long term. And I ask it that way because a lot of the units you have today they were purchased as opposed to build by Cracker Barrel. So this will be a new pace of growth. So any thoughts would be great.

So, yes, we are, I guess the number is sort of 9 to 11. And it's really, we had the real estate pipeline to open more than that. I think our original target was 15 for the year, it has been construction delays that have impacted our timing. So for next year, we haven't announced a number, but we'll open sort of the residual ones for that we're supposed to open this year, if you will. And we were on track for probably at least that number, if not a little more next year, in terms of what you'll see, you're right, we have had relatively few opening since we acquired them, since almost immediately after the acquisition we went into the pandemic. But we'll update you on performance in terms of sale AUVs and margins. And as we continue to be confident about the site selection model that we're using, and the operating model, and about the progress we're making on the infrastructure to support the growth, we'd like to be in -- we hope to be in a position to accelerate the growth from there on, but we will keep you posted.

Our next question will come from Sara Senatore with Bank of America.

Great, thank you very much. Two kind of follow on questions, please. The first is about inflation expectations. I think that they perhaps are a little bit higher than had that maybe last quarter just based on what inflation outlook, did you see any kind of -- is that the right interpretation? And then on labor inflation in particular it strikes me that you're seeing kind of more normalization in the labor market, but you're still expecting very high wage inflation in the year ahead. So how do I kind of reconcile those and as we look past 2022, is high single digits the right run rate, or you would expect it to look more like kind of mid-single digits?

Sara, first, good morning and right, as you were asking, important part of your question, you faded out here. So was your question that we've increased our inflation expectations since the last time and, yes, since the last quarter, and why we missed that part.

Yes, sorry. So the first part was did you increase the inflation expectations? I just wanted to, it seemed like that was the case. And then on the labor market, just trying to reconcile what seems to be more of a movement in the labor market and better applicant pools with still very high wage inflation and then as we look out is this just sort of temporary and you would expect, for example, next fiscal year to get back to call it mid-single digits, rather than kind of high single digit wage inflation as the new normal going forward? Because that just seems like a very high rate to sustain over time?

Well, we're certainly, so first of all, we did increase our ex guidance, in terms of inflation expectations, I think we actually put something out in January around the ICR. As we were seeing inflation exceed even that we were expecting in November, some of the biggest places we're seeing the inflation were driven by minimum wage increases, that Florida had a really large increase. For example, we have a number of stores, there are a lot of employees. And that then puts pressure on all of your employees, not just your new hires. So some amount of the inflation has been driven by that. And I think it's just as the market has been super competitive. And we have, there's a fight for labor, we're still in that mode. Now applicant flow, as I've mentioned, is improving. And we hope to be able to reduce our turnover and improve our par levels. So yes, I would hope that inflation environments is going to moderate the rate, the rate inflation will moderate as we go into next year. What we don't believe is that labor rates are going to go down the way we're hoping actually, commodities will in some areas.

Exactly. I'll build on that too, is because if you think about the year-over-year inflation, so to some degree, what we're talking about with Q4 is we're coming down from Q3 to Q4 with the wages because we're wrapping up on wages really started to go up last year. So I don't know that versus say week over week inflation or month over month inflation. So I think as you can take the current wage rate level, and we wrap on lower wages, that kind of gives you one inflation take. But that doesn't mean necessarily that over the midterm as we start to wrap up the levels that we're at today, that high wage rate percentage continues, but it doesn't -- but if -- but as long as we don't see absolute wage levels going down, then we're not which we really aren't. You're not going to have wage deflation. But I also don't think it means that over time, you end up with high single digit wages over a longer period.

Great, that's very helpful. Thank you. Yes, wage disinflation, not deflation is sort of what how I am think about it, sounds like you are too. And then just the second point is, as follow up on, you mentioned, your catering business was stronger than expected. So are you seeing some of your customers come back to you for these celebratory occasions? I know that for a while they were sort of trading up to higher price point concepts. Is that normalizing you think and is it as they have left stimulus is that what's happening, just trying to understand that dynamic, thank you.

Well, Jen, take that one.

I think there are a lot of factors driving our catering business up, we've been really pleased with where that has come out, especially in Q2, one, I think just the receiving of COVID has enabled a lot of both personal or large family gatherings, and especially b2b or office or other large business gatherings that structural thing has helped, but we have made some changes to our catering offering in terms of the sizes, to better meet consumer demand, we've made it easier for our guests, or customers to calculate the per person pricing, which removes friction from the ordering process. And last year, we rolled out the individually box catering meals, which I think is really fitting, filling a need and unmet need. And we've been pleased with how customers have responded to that. And we continue to look at ways to better leverage our van fleet, which is a unique thing that we have approximately 230 catering vans out there that help us meet that. So we continue to build on that. And I think our operators have done a great job stepping up and working out in their communities to sell catering because our catering is fabulous, our food travels well, broadly appealing a lot of variety, good price points. So we think catering is going to continue to grow as this year closes out and well into next year.

And our last question is a follow up from Jake Bartlett with Truist Securities.

Great. Thanks for taking the follow up. My question was on the efficiency gain that you expect from the food cost management system and the labor management system on top of the POS, going back to 2017 Analyst Day, those two things were a big part of I believe were a big part of the savings you expected over the next three years at the time, I think with the $40 million of savings. So maybe if you could just help us understand how big a deal these are in terms of what kind of cost savings you might expect? And then should we expect some impact in the fourth quarter, but then much greater impact in 2023. Maybe how these initiatives rolled out into the sudden improvement in savings, or is it gradual over time for each of those two components?

Okay, Jake, I'll take that one. So as you accurately remember, we started our POS rollout a few years ago. And that platform allowed us to then install both a food management system and a labor system that we believe and continue to believe will help us drive productivity and efficiency in our restaurants. So in the food system, which is now in I think it was in 400 but we'll have that completely installed in the system and by March or April. We're seeing actually even more than I had hoped improvement in food waste, we haven't quantified it specifically. So I'm not going to give you the exact number. But what this new food system allows our operators to do is to more granularly and accurately manage their food waste. And we've seen that results in lower waste, which has even become more important, as the inflation impacts have increased the cost of our waste. I'm also optimistic as we integrate that food system with our new labor system, which we are testing now, but don't plan to install till ‘23 that the integration of those will help simplify for our operators, the management of our restaurants, so the sales forecasting, the production and the food and taking into account, the demand the whole times and all the things that they now have to sort of do more manually, and as well as in the labor system will help us drive productivity in the back of the house. So those are important systems that we think will allow us to drive improved productivity and profitability in the restaurants. We haven't provided yet and probably not in a position today to quantify exactly what those are.

This concludes our question-and-answer session. I would like turn the conference back over to Sandy Cochran for any closing remarks.

All right, well, thank you for joining us today. Cracker Barrel continues to be one of the strongest and most differentiated brands in the industry. I remain confident in our strategy and initiatives and believe we're well positioned to drive solid long-term results. We appreciate your support and look forward to speaking to you again in a few months.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.