Good morning and welcome to the Cracker Barrel Fiscal 2021 First Quarter Earnings Call. All participants will be in a listen-only mode. After today's presentation there will be an opportunity to ask questions. Please note that this event is being recorded. I’ll like to turn the call over to Mr. Adam Hanan, Manager of Investor Relations. Please go ahead.

Thank you. Good morning and welcome to Cracker Barrel’s first quarter fiscal 2021 conference call and webcast. This morning we issued a press release announcing our first quarter results. In this press release and on this call, we will refer to non-GAAP financial measures for the first quarter ended October 30, 2020.

Thanks, Adam. Good morning, everyone. Thank you for joining us and I hope everyone is continuing to stay safe and healthy. Today I'm going to begin my prepared remarks by briefly discussing our first quarter performance, and then I'll touch on our Q2 plans, provide an update on our initiatives, and comment on our outlook. As you can see from our press release, we delivered first quarter results that significantly improved upon the previous quarter. Comparable store restaurant sales declined 16.4% in the quarter, improving from down 39.2% in the fourth quarter. I believe our results demonstrate that we have the right strategy in place and underscore the strength of our brand and the trust our guests have enough to deliver a great faith experience.

Good morning. And thank you, Sandy. Today my prepared remarks will focus on our first quarter financial performance, updates on our strategic initiatives and our liquidity position. Then I will provide an update on recent sales trends and comment on our outlook. I would like to begin by discussing our financial performance for the first quarter of fiscal 2021. For the quarter, we reported total revenue of $646.5 million, a decrease of 13.7% compared to the prior year quarter. Our restaurant revenue decreased 15.1% to $515.2 million, and our retail revenue decreased 7.6% to $131.2 million. We were pleased with the improvement we saw in our comparable store restaurant and retail sales compared to the previous quarter. Comparable store restaurant sales improved from down 39.2% in the fourth quarter to down 16.4% in the first quarter. The sales improvement was broad, both geographically and across day parts. The South was our strongest performing region, dinner remained the strongest day part and all three day parts saw a solid improvement. We believe our first quarter top line results were driven by improvements in dining room capacity, our new lunch in dinner menu, off-premise initiatives and for a portion of our stores front porch dining. Our first quarter comparable store restaurant sales consisted of a traffic decline of 18.3% and a 1.9% increase in average check, which included core menu pricing of approximately 1%. Off-premise sales grew 122% compared to the prior year and represented approximately 25% of total restaurant sales. Comparable store retail sales improved from down 32.3% in the fourth quarter to down 8.1% in the first quarter, driven by strength in categories such as decor, personal care and furniture. Now moving on to expenses. Total cost of goods sold in the quarter was 30.8% of total revenue versus 29.3% in the prior year quarter. Our restaurant cost of goods sold was 25.7% of restaurant sales versus 24.6% in the prior year quarter. This 110 basis point increase was primarily driven by commodity inflation of 1.9%, outpacing our core menu pricing, as well as changes to menu mix.

First question is from Alton Stump of Longbow Research. Please go ahead.

Thank you and for taking the call. Just you know, coming back to the point that you made Jill. You know, I wondered that as Thanksgiving being a huge week for you guys during the month. I was curious as what the interplay was between obviously for travelling, but on other hand, there were a lot more groups on average that potentially might fit well with your Heat n' Serve as a whole platform. So, you know, I was curious as to you know, kind of what the puts and takes were, particularly over the holiday and what that might portend to your - you know, for the Christmas upcoming season as well?

Great. Good morning, and thank you, Alton. Yes, overall Thanksgiving from a week standpoint, it's one of our highest volume weeks, and we were pleased with our overall performance, especially in light of the current environment. As we look at our sales, our Heat n' Serve sales were better than what we had expected, primarily due to the shift to our off-premise, as well as the introduction of the smaller off-premise offering that Sandy talked about in her prepared remarks, both of those were very popular. So we were pleased with the overall demand and believe that that really underscores how the offerings really resonated with our guests. On the travel side, you're right, it was - it's a noisy quarter, it's a noisy time for us. It does seem like people were less likely to travel, and probably are going to be less likely to travel during the holiday season, given the resurgence in COVID. So that said, even though travel was probably down in the aggregate for us, we do believe that overall, we're poised to benefit from those guests when travel kind of opens back up. So is that helpful Alton?

Yes. Great. Thanks for that color. And then I guess just one quick follow up. As unit builds, has there been a slowdown recently because of the surge in COVID cases as far as your plans to build over the course of next couple quarters?

So Alton, you're talking about building new units?

Yes.

Oh, I see. So our unit expectations may be impacted by COVID. I mean, some of it is - for Cracker Barrel, we have modest number of new units that we're looking at opening this year. So that's still in flux. As we look at Maple Street, I’d say we're being opportunistic, and patient, because that team is in the process of building the pipeline for opening new units. So right now they're solidifying the pipeline. And frankly, as we get through probably the next quarter, we'll be able to provide more color on where we are with that. So excellent question.

Got it. Makes sense. Thanks so much.

Next question comes from Jeff Farmer of Gordon Haskett. Please go ahead.

Great. Thanks and good morning, guys. You did touch on it with that 100 restaurants roughly that are closed currently. I think that's about 14% of the system. But I'm just curious what type of same store sales headwind did that create for that quarter to date same store sales number?

Hey, Jeff. This is Sandy. What a nice start and maybe set the question up a little bit, at least what I think the question is, and then I'll turn it over to Jill. I assume what you're trying to understand is some a little more granularity behind our second quarter sales trends. So as you can probably imagine, we're dealing with sort of groups of stores and the way we're categorizing them is, where dining rooms are open greater than 50%, and what our expectation is there now inside that, there depends on to what degree you might be a tourist location and how that's impacting your business. Then we've got dining rooms open, but less than 50%, we've got some communities where it's only 25%, and they've gone backwards. Then we've got off-premise only, but guests are allowed into the retail store, and they can come into the restaurant, we have expectations there. And then we have curbside only where guests are not even allowed sort of in the building. And that's an additional category. So our operators, and these categories are changing. They are going in and out of these rules, if you will, sometimes with only a couple of days notice. And it's unclear how long they will be in it, which is creating an interesting environment for operators to predict demand as it relates to labor and our retail teams, as I mentioned in my prepared remarks, those are very different environments. So if you were to look under the Q2 sales, and what you see is sort of a conglomerate. It's like each of those categories has different trends. And we're monitoring each of them. I'll add to Jill's, we were pleased with Thanksgiving. And I was particularly pleased with how the operators delivered the sales, which to her point largely shifted as people either couldn't travel or couldn't be in the dining rooms or just weren't comfortable eating in the dining rooms to Heat n' Serve an off-premise, but how the operators navigated through all that chaos, often at the very last minute. So that just sort of maybe repeats, again, sort of how complex the situation. I'll turn it over to Jill whether you want to add any numbers to that.

So I think Jeff, I would remind you, so we said in our prepared remarks, in the first quarter we had about 20 stores that locations had closed dining rooms. So now as Sandy said in her prepared remarks, we're running about 100 dining rooms closed, currently. And that 20 stores in the first quarter that was at the end of the first quarter. So that's definitely had a big impact. That's the biggest impact. And the change in trend that you're saying to Sandy's point, it's a really fluid situation. And you know, we're working on trends, and certainly trying to help our operators manage through it as well. I guess you know, all of that said, just remind everyone, as we talked about, we've got a strong balance sheet. We're in a good cash position to manage through this with our operations team. So we're really focused on delivering a great guest experience and the health and safety of our teams and our guests.

That's helpful. And just one more follow up. So if my information is correct, it looks like a state like Kentucky, home to roughly 6% of the system. At some point in the last few weeks, that state did suspend indoor dining. So the question is, how did your off-premise strategy change? How quickly does it change? Sort of how adept are you guys at sort of reacting or responding to these mitigation efforts that seem to be picking up speed?

Well, the strategy we'd gone into it with thinking about the assortment, we assume that a lot of guests may even if the dining rooms were open, either wouldn't be able to get in or wouldn't be comfortable. So that's why we created this new smaller Heat n' Serve offer, which we thought would be the appropriate kind of offer for the needs of our guests. As the dining rooms closed, the teams worked very hard to move the inventory around, right, so that we had more of the supplies and inventory to support more of that kind of business, whether that's the turkey or the supplies that you need in order to do to Heat n' Serve. And then we had some really creative things being done by operators, a couple of our Kentucky stores, close to the Tennessee border. I know we're doing some of the production for stores in Tennessee, that allow the stores in Tennessee to take more business, because we were at - we had the production capacity from the Kentucky stores. So our operators were doing everything they could, to sell everything they could to - in whatever way a guest wanted to use us.

All right. Thank you.

Thank you. The next question from Jake Bartlett, Truist Securities. Please go ahead.

Great. Thanks for taking the question. Mine is really about the run rate of the business. I know, some - lot has changed from the first half of the month of November to the back half with the short closings really in the last two weeks. Could you help us understand, it seems, I would think that the trends have decelerated much lower in the back half of the month versus that negative 20%. But if any help there would be useful and helpful? And also, just to clarify, you said that the Thanksgiving had very strong Heat n' Serve. But was Thanksgiving sale did that help or hurt and relative to that negative 20%. So, so potentially kind of excluding Thanksgiving, maybe even the run rate could be could be a little bit lower?

So, Jake, there's a lot in there. Great question. So let me start kind of on the overall business from a margin standpoint, if that help us. So, you know, as we think about the business in the near term, clearly in the first quarter our margins were pressured by the overall lower sales and really the deleverage. We benefited from the cost savings actions that we've put in place, and that was partially offset by the P&L impact from the sale leaseback and the investment in some of our initiatives. So we mentioned that we had about a $1 million of beer and wine in the first quarter. As we look at the second quarter, we would expect margins to be similarly pressured. Clearly, the deceleration in the top line would have an impact, as well as our off-premise offerings. As you think about the Heat n' Serve, although they have a great penny profit. Their overall COGS and packaging costs are higher. So from a margin standpoint, they had more pressure but great penny profit there. So as well as in the second quarter, we'd expect to see additional investments as we roll out our beer and wine initiative. So that's kind of the near term impact from a margin standpoint. Looking at it kind of broadly, more longer term from our margin impact, we feel really good about the actions that we have taken. So that hopefully post-COVID, we're in a good position. The $50 million in cost savings that we've taken out of the business will benefit. Certainly that will be partially offset by the net $20 million impact from the sale leaseback transaction. But overall, those actions were very beneficial. I guess what we don't know is post-COVID, kind of what that mix of sales looks like, not only how much will be off-premise, but what the different drivers within off-premise. And those have modestly lower margins. So that could have an impact, as well as the timing of our initiatives, as we roll out our initiatives. Although, you know, we're really confident that digital and our other initiatives will create value over the longer term. So over the longer term, we think we're going to be in a great spot. So hopefully, that's helpful. As you think about from the short term and the longer term business model aspect.

That is helpful. I was actually also focused on the sales level, as we've cut it, and think about the run rate of the business, November was negative 205. But is it fair to assume that it's significantly lower as you exited the quarter - the month?

Yeah, that's like the $30 million question. You know, there's just so much noise and so much change in the regulatory environment and how the consumer is feeling, it's really hard for us to predict what the rest of the quarter will be like. But that's part of the reason why we wanted to share with you all, what our current trends looks like. So you could understand how we ended the first quarter and what it looked like at the start of the second quarter.

Right. But I guess, could you tell us what the - in terms of current trends with the last two weeks versus the first two weeks of the month, just given how much has changed?

Oh, it's just - it's again, it's just so noisy. Especially we get the holiday in there. It's just too noisy to - to parse.

Okay. And the holiday was that a plus or a minus in terms of that 20% trend?

So…

I am not going to re-enter. But I’ll move on.

So good. I’d ask him the same question, the same way. So again, it's just - we wanted to be helpful.

Yeah, we want to provide information that we think is helpful. So we think the quarter to date trend is the most helpful for you.

Got it. Okay. I appreciate that. Just one question on pricing, 1% menu pricing seems like inflation, I don't think you gave your outlook for labor cost inflation, which would be helpful. But the 2% to 2.5% commodities, you know, imply some deleverage. So is that 1%, what you plan for the year? Or is that just timing issue? And you'll take more pricing later in the year?

Yeah. So you might remember that at the end of the last quarter, we talked about the fact that we were going to be cautious on pricing. So we did go in with more modest pricing at the beginning of the year. We do believe that we will approach that 2% for the total year. And then, we mentioned that we saw a step up in the commodities inflation, and we expect wage inflation in the 2.5% to 3% range.

Great. Thank you very much. I appreciate it.

You're welcome.

Thanks, Jake.

Next question is from Brett Levy, MKM Partners. Please go ahead.

Great, thanks. Just following up on Jeff and Jake's question and then a couple of others. Are you able to quantify just what the drag is from those - the 20 stores in first quarter and the 100 stores? I just think that's the simplest way to ask it. And then also when you think about off-premise, especially in those 20 and the 100 stores that have closed the dining rooms, what have you seen in terms of retention of off-premise? How is that compared to the peak in those markets when you were off-premise only or how they've been running when you have the dining rooms open? And then I'll change the acts on another question.

So maybe I'll start and turn it over to give you a break Jill. So yes, we would be able to Brett quantify each category. I think we're - but we're not going to each category except to say that the best performing stores are the ones where the dining rooms are open at very high capacity. And we have lots of guests that continue to want to come and dine with us on all three day parts and so on. And the worst performing stores are the ones at the other end. And as they shift, as the number shift it changes, obviously, I'm explaining to you which probably didn't need to be explained. It's just so much noise over the next and particularly as we look for the rest of the quarter with the holiday trends and what we expect for travel and vacation and people celebrating that we were just not comfortable offering any more granular guidance.

Yeah. And then I would just add, on your question about how much of the off-premise sales have we retained is, again, that is noisy, because if you think about it, we started opening up dining rooms in May. They opened up to different levels, and in some areas, they stepped back down. So overall, it's hard to just give you a number and we've retained X percent. I mean, what you can see clearly our first quarter performance with off-premise sales growing 122% and representing about 25% of our restaurant sales, we were pleased with that overall performance. Clearly some of that is driven by the closures. And, you know, we're just not sure what that level is going to look like post-COVID. Our goal is to retain a large portion of our off-premise sales, as dining rooms reopened. But you know, we're just not sure at this point.

And then just one little last technical question on sales, have any of your units returned to positive comp territory? And If so, any willingness to share up? Is it handfuls, is it percentages, is it 5%? Something like that? Thanks.

Yeah. It actually some have, it's been terrific. Like I said, our operators are doing everything, you know, just our outdoor dining and the kind of things they're doing to capture all of the demand. That's there has been really impressive. Yes, we have a handful of stores that have gotten to positive comps. And I guess, Jill, unless you want to add more, it's probably much a…

And I guess then just turning in a different direction. Just on the technology front. What have you seen in terms of your ability to integrate the POS systems? Are you seeing any productivity enhancement? And what kind of progress are you making on your - on the mobile and digital initiative? And then I'll let the queue handle with the rest.

Great. So this is Jill. So with POS, so currently, we've got about 250 stores have the new POS system in it. And you know, we're hopeful that will roll out another couple hundred through the end of the fiscal year. The POS from the team member standpoint, it's just - it's easier for the team to use and train on. And you're right, it does set the foundation for some of our other technology, like some of the pieces that digital will use and tablets. We've certainly found tablets to be very beneficial in the stores that have them for our curbside and some of the off-premise piece of it. And then I guess I can turn it over to Sandy to comment on digital, which we're very early in that story.

Yeah, so we rolled that in Q1, its pretty big milestone, was pleased with the early results. It was an important component of our Thanksgiving performance. And we did see improvements in conversion rates. So people that went online to order were able to do so. So overall pleased with the start of it, looking forward to the planned initiatives, it will - then we'll be able to add to it as we go forward. There were some hiccups, that we almost - we saw so much traffic that it was well - it was a lot more than we had expected. So we learned a lot as we stress the system for that day. And so I'm pleased with the progress we're making there.

Next question is from Jon Tower of Wells Fargo. Please go ahead.

Some follow ups to earlier comments. First, on the comment earlier in the script, the idea of doubling the beer and wine mix within the dining rooms. I think it's 1% in the 250 stores today. In terms of thinking about that going forward, will that include greater merchandising within the stores? Because it sounds like, to your point earlier, that's not necessarily happening today?

So, yes, and it's part of - we don't really have anything on our tables in our dining rooms in the COVID environment, we don't ever oil lamps, or the desert cards, or the table tents, which was merchandising, that would have been a great place to tell our guests about the new beverage program. And a lot of our guests, they know the menu so well, they don't actually look at it. So - and then so what we're using now is what we can, we have posters as you walk into the dining room, and so on. But I think as we go back to a more normal environment, we’ll have more opportunities to tell the story more effectively. And I think as we get experience, just having it for a lot of our restaurants, they've only just rolled it out. So our servers are still getting comfortable with the fact that we have a new beverage program and how to offer it. So I'm pleased with the results, broadly speaking, that we have now, but do believe that it can double as we do - as we get more experience and do a better job of promoting the offering.

Okay. So just to clarify that does not - the 2% number, so it does not really include merchandising on the tables, but just broader awareness growing?

I think it's both, I think it's going to take some merchandising on the table or doing a better job. Now we've got some places that have had it for a while that are close to that now. So I think sometimes guests just have to find it as they visit us. And maybe they're there for an occasion where it makes sense. So I think it's going to take a variety of things to achieve it, but I'm optimistic that we can get there.

Okay. And then just switching gears a little bit, obviously, your off-premise business has been very successful during the pandemic and hitting 25% mix in the most recent quarters, great. I am curious how you're thinking about the off-premise business, and how that might be evolving your in store menu as well, right. So today, a lot of your off-premise is bulkier, larger size orders, family packs, the Heat n' Serve does 6 to 10 or less than 6. I'm curious, you know, are you seeing much interest from consumers to kind of go smaller size occasions as well so and what that might potentially mean for your menu over time, whether it be in store, or off-premise? For example, does it make sense that at some point, you should have some handheld sandwiches that aren't necessarily that much of a feature for the off-premise today?

So let me take a step first. First of all, despite the fact that in the month of November, in the second quarter, maybe in general, individual to go is the overwhelming majority of the off-premise business, it's over 60%. And so most of our to go are still guests that go online, or call the store or walk in, and they just order one or two entrees, that's probably what you're thinking for off-premise. Now, for holidays in particular, and what we found during the pandemic, these family meal baskets were a great solution for a certain need that we hope will now that we've introduced it, continue in non-holidays with our family meal baskets, and that we've even had more of an opportunity to introduce the Heat n' Serve which just as a holiday offer. We do it Thanksgiving, Christmas, Easter. And we tried something last year at Mother's Day. So these big packaging, this is really more of a November thing. Now secondly, though, there's a lot of work being done from a culinary team about what is the right kind of - what is the right additions to the menu to meet the needs of the guests that wants to use the brand off-premise and your point about you know, handheld lunch is one example and they've actually designed some things that I think are really interesting, taking our meatloaf and making a – it was terrific sandwich with it and some things, so that we could actually put into a box and an offer to be maybe something people will be interested in particularly at lunch. So the culinary team is working on what we could do to supplement the menu, may be off-premise only handheld desserts, things like that. And I'm looking forward to rolling or testing some of those things in the latter half of this year, through next.

Got it. Thank you. Appreciate that. And then just pivoting to the retail business. Obviously, I've been struck by how strong the businesses has trended throughout the crisis. And I'm just curious if you've picked up anything, having to scramble throughout this crisis, to manage that business, have you learned anything that's going to stick on the inventory management side into the future? And perhaps how this digital platform that you've just rolled out will help either manage inventory? Yeah, I guess, help manage inventory better than in the past?

We've learned a lot about inventory management. And Laura did an - Laura and her team, our retail team did an excellent job heading into the pandemic of cutting inventories. And in some cases, I think she'd say, it was a interesting lesson learned because we had great sell-through and we don't - we probably realize there's probably some areas we could do, we can get that ourselves through with less. Maybe the visual merchandising, impact of fewer items allowed the guests to really see the product almost more effectively. So I think there's lessons learned about that. They have had to scramble, both we went into the year with conservative buys. And then we had this phenomenal sell-through in the first quarter. So they've had to add things. And some themes that we're actually going to be bringing in soon, that will give us maybe some new areas that we - some new demand that we'll see was available to us. The digital side, we are working hard to understand the opportunity to attachment to an off-premise buy. That's been more interesting, because just the fact that you're coming in to buy, you know, dinner one night, but it's hard to kind of get a bead on exactly what we might be able to offer you to add to it. They're trying a lot of things. I think that the digital store will allow us that when you go online to order to prompt you, and that may give us some learnings. And we're also really working on what we merchandise near that to go pick up station to see what's getting traction. But we probably got a long way to go to really figure that out completely.

Okay, great. Thank you very much appreciate the time.

Next question comes from Todd Brooks of C.L. King. Please go ahead.

Good morning, everybody. Just a few questions for you. First, if we can look back to the first quarter, could you maybe share with us if you're looking at the three months to the quarter what the strongest, same store sales performance might have been? We're just trying to gauge how good the business got before we had the COVID flares here?

So great question. You know, you'll remember when we were going into the quarter, on the first quarter, we had said we were down approximately 15%, 20% kind of going in. So there was some improvement as the quarter went on. But you know, we don't want to get into any particular month. What I would say is the improvement that we saw within the first quarter, it was really broad. Apart from the capacity restrictions, we improved across all of the day parts. The dinner day part continued to be the strongest. The weekend dinner is still where we tend to run into more of our capacity constraints, as well as kind of brunch time breakfast and lunch on Sundays. You know, the South was our strongest performing region, but again, that might have been more aligned with where the capacity constrictions were…

Front porch dining and things like that…

Yes, yeah. And we did benefit in the stores that had front porch dining. They picked up about a point in overall sales and again, much of that was during the capacity, restricted time periods where you know, kind of like the weekend.

Okay, great. And then not looking for specifics on the quarter-to-date trends, but you talked about the four buckets of stores and how fluid things are with stores moving between the buckets. But if you look at just one constant bucket, so the stores that have stayed in dining rooms greater than 50%, how variable has that performance been relative to the performance that you saw in Q1? And I'm just trying to get because a couple of times Sandy you’ve talked about that the customer may not be, is willing to come into the restaurant, or I'm just trying to get a sense, are consumer attitudes changing across all the different opening statuses of the store, or our sales pretty consistent. And it's more the number of stores moving between the four buckets that's caused the decline in same store sales relative to this quarter?

There's so much. I know that it would be so helpful for us to be able to kind of give you all more clarity, but it really is both. We've got some communities where I do believe that the concerns in the community about the issue broadly is reducing people's interest in dining in. We've got other communities where they don't seem at all impacted by the recent resurgences in terms of what's happening there. We've got some stores that maybe they were more travel related, and that the absence of the travel leading into the season, we believe had an impact on them. And just tearing it all apart is very difficult. But generally, I'm trying to think of something that would be helpful, but generally the stores that were - had sort of as much capacity as they can get in the dining room and had off-premise. You know, we continue to be pleased with their performance.

Okay, that's helpful. Thank you. And then the final question on beer and wine. You talked about the progression from 1% of dining room sales to 2% over hopefully in the coming year. Are the assumptions or if you could maybe talk about the assumptions as far as how much of that's related to ticket growth with customers versus how much you're attributing to more frequency with the availability of beer and wine as far as visits?

So Todd, so the 1% that we referenced was same restaurant sales impact from a check standpoint. So that's mix. So I am reading the traffic patterns, and if we're able to grow traffic in this environment, we just have not been able to read that.

Okay. So the eventual move to 1% to 2%, we're attributing that to check impact. And then if there is a frequency benefit it could be incremental tailwind then?

That's right. Thank you for clarifying that. Yes.

Okay. Great. Thank you both very much. Appreciate it.

Thanks, Todd.

Next question is from Gregory Francfort of Bank of America. Please go ahead.

Hey. Thanks for the question. I had two. And the first is, how would you as cases have spiked and closures have started again? How have you managed labor costs and employee turnover and keeping employees in the staff and - in the stores that have had to shut down again, just very curious how you kind of managed to that Thanks.

So thank you for the question. And that it - they've done an excellent job of it. But it's been tough. You know, each of the stores is - first they're just spending time understanding what state that store is going to be in and predicting the - how the demand is going to come because that has implications on what kind of labor we bring in and how much. Clearly off-premise uses some different – you don't need host and cash addition the same way. So the managers are managing that. Now, the good news about the last few weeks has been that our off-prem business has been so strong, that we are largely able to put a lot of people to work. Doing something in the store and the field had been focused a lot on cross-training, which has given them a lot of flexibility. So I think right now they're doing a good job of managing it, but it is difficult and it has been - it has required us to pivot at the last minute to accommodate all the changes.

Got it. That’s helpful. And then Sandy, I had one question, just on it, as you look out there's so much talk about sales this week or next week in off-premise. But as you look out to nine months from now, or 12 months, or whenever I guess this is over, what are your expectations for maybe what has changed? And I guess I asked you within the context of, do you think consumer wallets will be under a lot of pressure, and do you think Cracker Barrel has to adjust to that? And how do you think Cracker Barrel fares in that sort of environment? I don't know if that's a positive or negative for your business from a share or whatever perspective? Thanks.

Yeah. So I think that's a big and important question that probably everybody is sort of thinking about. We went into this thinking it was going to be a difficult economic environment. And if anything, the recent resurgences have even increased the uncertainty about the duration and maybe the magnitude of the economic impact, as we come out of it. So the unemployment rates improved, but it's still relatively high. The enhanced unemployment - the stimulus and the unemployment benefits, I think we're providing us or did provide some level of insulation and now, it's unclear to what degree those will continue. So, you know, we expect the consumer to be challenged for some time. And we believe that our brand is well positioned to perform well in that environment. We've got loyal guests, they trust us, we're highly differentiated, everyday value, high quality food, all the reasons people love us, we think, will be one of the reasons they will trust us to come and dine with us when it's all over. From a macro cost standpoint, I'll ask Jill to touch on that. Because what I kind of touched on is the top line, and how that's going to shift off-prem and dining room we've already spoken to in terms of consumer preference. But in terms of the cost variables, labor and food, maybe you can speak coming out of this to what you think.

Yeah. No, great follow up. Because we talked about the fact that even in the near term, we've seen more of an acceleration in commodity costs. Now, some of that was due to the wildfires out in California. But – and even like on the beef side, where we saw it accelerate, it was less - a little bit of combination of demand starting to increase. But also since the herds had been cold, there was less product there. So as businesses kind of rebound, there might continue to be pressure on that front. And then, the wage fleet - the wage inflation level, you know, we mentioned, we think for us it will be in the 2.5% to 3% range. It seems more broadly, it had moderated, but where that ends up, not sure. And so we're definitely still going to have those inflationary pressures that will continue to put pressure on the overall business.

Thank you.

This time, we have no further questions. I’d like to turn the conference over to Sandy Cochran for closing remarks. Please go ahead.

Thank you all for joining us today. So, while we continue to face the disruptions and challenges from this, I remain highly confident in our brand and in our ability to navigate through this uncertain environment. We appreciate your interest and support and we hope everyone has a safe and happy holiday.

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