CRACKER BARREL OLD COUNTRY STORE, INC

Previous wording

Cracker Barrel Old Country Store, Inc., and its subsidiaries (collectively, the “Company,” “our” or “we”) are principally engaged in the operation and development in the United States of the Cracker Barrel Old Country Store Ò (“Cracker Barrel”) concept. As of January 30, 2026, we operated 656 Cracker Barrel stores in 43 states and 54 Maple Street Biscuit Company (“MSBC”) locations in ten states.

Current wording

Cracker Barrel Old Country Store, Inc., and its subsidiaries (collectively, the “Company,” “our” or “we”) are principally engaged in the operation and development in the United States of the Cracker Barrel Old Country Store Ò (“Cracker Barrel”) concept. As of May 01, 2026, we operated 657 Cracker Barrel stores in 43 states and 52 Maple Street Biscuit Company (“MSBC”) locations in ten states.

Previous wording

We believe there are significant challenges in the macroeconomic outlook for the coming quarters, including continued inflation volatility, high consumer debt levels and lower savings rates, as well as the potential uncertainty associated with the geopolitical environment and global trade, among other factors. In the second quarter of 2026, we continued to face challenges related to negative publicity from brand initiatives, including the launch of a new logo and modern test store remodels, to which we responded by returning to our former logo and discontinuing the modern test store remodels during the first quarter of 2026.

Current wording

We believe there are significant challenges in the macroeconomic outlook for the coming quarters, including continued inflation volatility, high consumer debt levels and lower savings rates, as well as the potential uncertainty associated with the geopolitical environment and global trade, among other factors. During 2026, we have faced challenges related to negative publicity from brand initiatives, including the launch of a new logo and modern test store remodels, to which we responded by returning to our former logo and discontinuing the modern test store remodels during the first quarter of 2026.

Previous wording

Our strategy is focused on improving the guest experience to drive an improvement in our traffic and includes enhancing our operations, connecting with guests through our menu, marketing and value proposition, and implementing cost savings to improve profitability.

Current wording

Our strategy is focused on improving the guest experience to drive an improvement in our traffic and includes enhancing our operations, deepening our connection with guests through our menu, marketing and value proposition, and improving profitability.

Previous wording

Total revenue for the second quarter and first six months of 2026 decreased 7.9% and 6.8%, respectively, as compared to the same periods in the prior year.

Current wording

Total revenue for the third quarter and first nine months of 2026 decreased 2.9% and 5.6%, respectively, as compared to the same periods in the prior year.

Previous wording

For the second quarter and first six months of 2026, our comparable store restaurant sales decreases resulted primarily from the guest traffic decreases partially offset by the average check increases. For the second quarter and first six months of 2026, the average check increases included average menu price increases of 4.2% in both periods.

Current wording

For the third quarter and first nine months of 2026, our comparable store restaurant sales decreases resulted primarily from the guest traffic decreases partially offset by the average check increases. For the third quarter and first nine months of 2026, the average check increases included average menu price increases of 4.4% and 4.2%, respectively.

Previous wording

Our retail sales are made substantially to our restaurant guests. For the second quarter and first six months of 2026, our comparable store retail sales decreases resulted primarily from the guest traffic decreases.

Current wording

Our retail sales are made substantially to our restaurant guests. For the third quarter and first nine months of 2026, our comparable store retail sales decreases resulted primarily from the guest traffic decreases.

Previous wording

The increases in restaurant cost of goods sold as a percentage of restaurant revenue for the second quarter and first six months of 2026 as compared to the same periods in the prior year were primarily driven by higher food waste, commodity inflation, increased discounts and a shift to higher cost menu items partially offset by menu pricing.

Current wording

The decrease in restaurant cost of goods sold as a percentage of restaurant revenue for the third quarter of 2026 as compared to the same period in the prior year was primarily driven by menu pricing increases partially offset by commodity inflation. The increase in restaurant cost of goods sold as a percentage of restaurant revenue for the first nine months of 2026 as compared to the same period in the prior year was primarily driven by higher food waste, commodity inflation, increased discounts and a shift to higher cost menu items partially offset by menu pricing increases.

Previous wording

Commodity inflation was 1.3% and 1.7%, respectively, in the second quarter and first six months of 2026. We presently expect the rate of commodity inflation to be between 2.0% and 2.5% in 2026.

Current wording

Commodity inflation was 2.5% and 2.0%, respectively, in the third quarter and first nine months of 2026. We presently expect the rate of commodity inflation to be in the low 2.0% range in 2026.

Previous wording

The increase in retail cost of goods sold as a percentage of retail revenue in the second quarter of 2026 as compared to the same period in the prior year resulted primarily from lower initial margin which was driven primarily by tariffs, higher markdowns, higher discounts and inventory shrinkage. Inventory shrinkage, as a percentage of total revenue, increased in the second quarter due to the decrease in the total revenue for the same period.

Current wording

The increase in retail cost of goods sold as a percentage of retail revenue in the third quarter of 2026 as compared to the same period in the prior year resulted primarily from lower initial margin which was driven primarily by tariffs, higher discounts and lower vendor allowances partially offset by lower inventory shrinkage.

Previous wording

The increase in retail cost of goods sold as a percentage of retail revenue in the first six months of 2026 as compared to the same period in the prior year resulted primarily from lower initial margin which was driven primarily by tariffs, higher discounts, higher markdowns, inventory shrinkage and the change in the provision for obsolete inventory. Inventory shrinkage, as a percentage of total revenue, increased in the first six months due to the decrease in the total revenue for the same period.

Current wording

The increase in retail cost of goods sold as a percentage of retail revenue in the first nine months of 2026 as compared to the same period in the prior year resulted primarily from lower initial margin which was driven primarily by tariffs, higher discounts, higher markdowns, the change in the provision for obsolete inventory and inventory shrinkage.

Previous wording

Additional changes in tariff rates or trade policy could materially affect our operating results and financial condition, and this ongoing uncertainty introduces additional volatility and risk to our operations and financial condition and may affect consumer demand in ways that are difficult to predict.

Current wording

Additional changes in tariff rates or trade policy could materially affect our operating results and financial condition, and this ongoing uncertainty introduces additional volatility and risk and may affect consumer demand in ways that are difficult to predict.

Previous wording

The increases in store hourly labor and store management compensation as a percentage of total revenue for the second quarter and first six months of 2026 as compared to the same periods in the prior year resulted primarily from lower productivity and the deleverage associated with the decrease in total revenue in the second quarter and first six months of 2026 as compared to the same periods in the prior year.

Current wording

The increases in store hourly labor and store management compensation as a percentage of total revenue for the third quarter and first nine months of 2026 as compared to the same periods in the prior year resulted primarily from lower productivity and the deleverage associated with the decreases in total revenue in the third quarter and first nine months of 2026 as compared to the same periods in the prior year.

Previous wording

We presently expect the rate of wage inflation to be between 2.5% and 3.0% in 2026.

Current wording

We presently expect the rate of wage inflation to be in the low 2.0% range in 2026.

Previous wording

The increases in store occupancy costs as a percentage of total revenue for the second quarter and the first six months of 2026 as compared to the same periods in the prior year resulted primarily the decreases in total revenue and increases in maintenance expenses in the second quarter and first six months of 2026 as compared to the same periods in the prior year. The increases in maintenance expenses included higher costs associated with snow removal due to adverse weather events in the second quarter and first six months of 2026 as compared to the same periods in the prior year.

Current wording

The increases in store occupancy costs as a percentage of total revenue for the third quarter and the first nine months of 2026 as compared to the same periods in the prior year resulted primarily from the decreases in total revenue and increases in maintenance expenses in the third quarter and first nine months of 2026 as compared to the same periods in the prior year.

Previous wording

The increases in advertising expense as a percentage of total revenue for the second quarter and first six months of 2026 as compared to the same periods in the prior year resulted primarily from higher media spending and the decreases in total revenue in the second quarter and the first six months of 2026 as compared to the same periods in the prior year.

Current wording

The increase in advertising expense as a percentage of total revenue for the first nine months of 2026 as compared to the same period in the prior year resulted primarily from higher media spending in the first nine months of 2026 as compared to the same period in the prior year.

Previous wording

The decreases in incentive compensation expense as a percentage of total revenue in the second quarter and the first six months of 2026 as compared to the same periods in the prior year resulted primarily from lower performance against financial objectives in 2026 as compared to the same periods in the prior year.

Current wording

The increase in incentive compensation expense as a percentage of total revenue in the third quarter of 2026 as compared to the same period in the prior year resulted primarily from better performance against financial objectives in 2026 as compared to the same period in the prior year. The decrease in incentive compensation expense as a percentage of total revenue in the first nine months of 2026 as compared to the same period in the prior year resulted primarily from lower performance against financial objectives in 2026 as compared to the same period in the prior year.

Previous wording

The decreases in professional fees as a percentage of total revenue in the second quarter and the first six months of 2026 as compared to the same periods in the prior year resulted primarily from lower proxy contest expenses and lower costs associated with the Company’s strategic initiatives. In the second quarter and first six months of 2026, we incurred $2,633 and $4,072, respectively, in costs related to a proxy contest in connection with the Company’s 2025 annual shareholders meeting held on November 20, 2025. In the second quarter of 2025 and first six months of 2025, we incurred $5,263 and $8,220, respectively, in costs related to a proxy contest in connection with the Company’s 2024 annual shareholders meeting held on November 21, 2024. Costs associated with the Company’s strategic initiatives decreased by approximately $4,000 and $3,400, respectively, in the second quarter and first six months of 2026 as compared to the same periods in the prior year. Additionally, in the first six months of 2025, we incurred approximately $3,300 in connection with our settlement of wage-related disputes.

Current wording

The increase in professional fees as a percentage of total revenue in the third quarter of 2026 as compared to the same period in the prior year resulted primarily from higher legal fees. The decrease in professional fees as a percentage of total revenue in the first nine months of 2026 as compared to the same period in the prior year resulted primarily from lower proxy contest expenses and lower costs associated with the Company’s strategic initiatives. In the first nine months of 2026, we incurred $4,072 in costs related to a proxy contest in connection with the Company’s 2025 annual shareholders meeting held on November 20, 2025. In the first nine months of 2025, we incurred $8,220 in costs related to a proxy contest in connection with the Company’s 2024 annual shareholders meeting held on November 21, 2024. Costs associated with the Company’s strategic initiatives decreased by approximately $7,300 in the first nine months of 2026 as compared to the same period in the prior year.

Previous wording

The increase in payroll and related expense as a percentage of total revenue in the second quarter and the first six months of 2026 as compared to the same periods in the prior year resulted primarily from severance costs related to a corporate restructuring.

Current wording

The decrease in payroll and related expense as a percentage of total revenue in the third quarter of 2026 as compared to the same period in the prior year was primarily driven by lower headcount. The increase in payroll and related expense as a percentage of total revenue in the first nine months of 2026 as compared to the same period in the prior year resulted primarily from severance costs related to a corporate restructuring.

Previous wording

During the second quarter and first six months of 2026, impairment charges of $418 were recorded for three Maple Street Biscuit Company (“MSBC”) locations as a result of the Company’s decision to not extend the leases for these locations. No stores were closed during the second quarter of 2026. During the first six months of 2026, one Cracker Barrel store and fourteen MSBC locations were closed because of poor operating performance, resulting in closing costs of $3,473 which included lease termination costs.

Current wording

During the first nine months of 2026, impairment charges of $418 were recorded for three Maple Street Biscuit Company (“MSBC”) locations as a result of the Company’s decision not to extend the leases for these locations. During the first nine months of 2026, one Cracker Barrel store and sixteen MSBC locations were closed because of poor operating performance, resulting in closing costs of $3,473 which included lease termination costs.

Previous wording

During the second quarter and first six months of 2025, we recorded impairment charges of $2,163 and $2,863, respectively, as a result of the deterioration in operating performance of three MSBC locations and two Cracker Barrel locations. One Cracker Barrel store was closed in the second quarter and first six months of 2025 resulting in closing costs of $288.

Current wording

During the third quarter of 2025, we recorded impairment charges of $718 as a result of the deterioration in operating performance of two MSBC locations. During the first nine months of 2025, we recorded impairment charges of $3,581 as a result of the deterioration in operating performance of five MSBC locations and two Cracker Barrel locations. One Cracker Barrel store was closed in the first nine months of 2025 resulting in closing costs of $288.

Previous wording

In the second quarter and first six months of 2026, operating income (loss) decreased from the same periods in the prior year primarily due to the decreases in total revenue partially offset by lower cost of goods sold expenses, lower labor expenses, lower incentive compensation expense and lower professional fees. Additionally, for the first six months of 2026, higher media advertising and higher maintenance expenses further contributed to the operating loss in 2026.

Current wording

In the third quarter of 2026, operating income decreased from the same period in the prior year primarily due to the decrease in total revenue partially offset by lower labor expenses and lower advertising expense. In the first nine months of 2026, operating income (loss) decreased primarily due to the decrease in total revenue partially offset by lower cost of goods sold expenses, lower labor expenses, lower incentive compensation expense and lower professional fees.

Previous wording

In third quarter of 2026, the Company expects to receive and record approximately $47,400, net of legal fees, pursuant to a settlement agreement resolving interchange fee litigation.

Current wording

In the third quarter of 2026, the Company received and recorded $47,422, net of legal fees, pursuant to a settlement agreement resolving interchange fee litigation.

Previous wording

The decreases in interest expense for the second quarter and first six months of 2026 as compared to the same periods in the prior year resulted primarily from lower weighted average debt levels under our revolving credit facility partially offset by the interest related to the 2030 Notes.

Current wording

The decreases in interest expense for the third quarter and first nine months of 2026 as compared to the same periods in the prior year resulted primarily from lower weighted average debt levels under our revolving credit facility partially offset by the interest related to the 2030 Notes.

Previous wording

The following table highlights the provision for income taxes (income tax benefit) as a percentage of income (loss) before income taxes (“effective tax rate”) for the specified periods:

Current wording

The following table highlights the provision for income taxes (income tax benefit) as a percentage of income before income taxes (“effective tax rate”) for the specified periods:

Previous wording

H.R. 1., also known as the One Big Beautiful Bill Act (the “OBBBA”), was enacted on July 4, 2025, with effective dates in 2025 through 2027. The legislation includes provisions that impact the timing and magnitude of certain tax deductions. Key provisions include the permanent extension of several business tax benefits originally introduced under the 2017 Tax Cuts and Jobs Act. The provisions effective for the first six months of 2026 did not have a material impact on our financial position. We will continue to assess the potential impacts on our financial position as additional guidance related to the OBBBA is released.

Current wording

H.R. 1., also known as the One Big Beautiful Bill Act (the “OBBBA”), was enacted on July 4, 2025, with effective dates in 2025 through 2027. The legislation includes provisions that impact the timing and magnitude of certain tax deductions. Key provisions include the permanent extension of several business tax benefits originally introduced under the 2017 Tax Cuts and Jobs Act. The provisions effective for the first nine months of 2026 did not have a material impact on our financial position. We will continue to assess the potential impacts on our financial position as additional guidance related to the OBBBA is released.

Previous wording

The Company records its interim income tax benefit using the discrete-period computation method, as of January 30, 2026 and January 31, 2025, as allowed under Accounting Standards Codification 740-240,*Accounting for Income Taxes – Interim Reporting.*Use of the annualized effective tax rate (“AETR”) method would have resulted in an unreliable tax rate as small changes in the projected ordinary annual income would have resulted in significant changes in the AETR.

Current wording

The Company records its interim income tax benefit using the discrete-period computation method, as of May 01, 2026 and May 02, 2025, as allowed under Accounting Standards Codification 740-270,*Accounting for Income Taxes – Interim Reporting.*Use of the annualized effective tax rate (“AETR”) method would have resulted in an unreliable tax rate as small changes in the projected ordinary annual income would have resulted in significant changes in the AETR.

Previous wording

Net income (loss) consisted of the following for the specified periods:

Current wording

Net income consisted of the following for the specified periods:

Previous wording

The decreases in net income in the second quarter and first six months of 2026 as compared to the same periods in the prior year resulted primarily from the decreases in operating income discussed above partially offset by a higher income tax benefit in the second quarter and first six months of 2026 as compared to the same periods in the prior year as discussed above.

Current wording

The increase in net income in the third quarter of 2026 as compared to the same period in the prior year resulted primarily from the litigation settlement income of $47,422 received during the period. The decrease in net income in the first nine months of 2026 as compared to the same period in the prior year resulted primarily from the decrease in operating income (loss) discussed above partially offset by the litigation settlement income received during the third quarter of 2026.

Previous wording

Our primary sources of liquidity are cash generated from our operations and our borrowing capacity under the 2025 Revolving Credit Facility. Cash generated from operations, together with our borrowing capacity under the 2025 Revolving Credit Facility, were sufficient to finance all of our dividend payments, working capital needs, interest payments on long-term debt obligations and other cash payment obligations in the first six months of 2026.

Current wording

Our primary sources of liquidity are cash generated from our operations and our borrowing capacity under the 2025 Revolving Credit Facility. Cash generated from operations, together with our borrowing capacity under the 2025 Revolving Credit Facility, were sufficient to finance all of our dividend payments, working capital needs, interest payments on long-term debt obligations and other cash payment obligations in the first nine months of 2026.

Previous wording

Our operating activities used net cash of $2,169 for the first six months of 2026 as compared to $93,693 net cash provided during the same period in the prior year. This change was primarily driven by the operating loss in the first six months of 2026 and the timing of payments for accounts payable.

Current wording

Our operating activities provided net cash of $92,506 for the first nine months of 2026 as compared to $116,677 net cash provided during the same period in the prior year. This decrease was primarily driven by the operating loss in the first nine months of 2026.

Previous wording

Capital expenditures (purchase of property and equipment) net of proceeds from insurance recoveries were $60,747 for the first six months of 2026 as compared to $76,986 for the same period in the prior year. Our capital expenditures consisted primarily of capital investments for existing stores, capital expenditures for strategic initiatives and new store locations. The decrease in capital expenditures in the first six months of 2026 compared to the same period in the prior year resulted primarily from lower capital investments in existing stores and reduced spending on strategic initiatives.

Current wording

Capital expenditures (purchase of property and equipment) net of proceeds from insurance recoveries were $87,896 for the first nine months of 2026 as compared to $113,214 for the same period in the prior year. Our capital expenditures consisted primarily of capital investments for existing stores, capital expenditures for strategic initiatives and new store locations. The decrease in capital expenditures in the first nine months of 2026 compared to the same period in the prior year resulted primarily from lower capital investments in existing stores and reduced spending on strategic initiatives.

Previous wording

At January 30, 2026, we had $45,500 of outstanding borrowings under the 2025 Revolving Credit Facility and $8,703 of standby letters of credit related to securing reserved claims under our workers’ compensation insurance, which reduce our borrowing availability under the 2025 Revolving Credit Facility. At January 30, 2026, we had $495,797 in borrowing availability under our 2025 Revolving Credit Facility. During the first six months of 2026, we borrowed $198,000 and repaid $152,500 under the 2025 Revolving Credit Facility.

Current wording

At May 01, 2026, we did not have any borrowings outstanding under the 2025 Revolving Credit Facility. At May 01, 2026, we had $8,703 of standby letters of credit related to securing reserved claims under our workers’ compensation insurance, which reduce our borrowing availability under the 2025 Revolving Credit Facility. At May 01, 2026, we had $541,297 in borrowing availability under our 2025 Revolving Credit Facility. During the first nine months of 2026, we borrowed $238,000 and repaid $238,000 under the 2025 Revolving Credit Facility.

Previous wording

Our 2025 Revolving Credit Facility contains customary financial covenants, which include maintenance of a maximum consolidated senior secured leverage ratio and a minimum consolidated interest coverage ratio. Under the 2025 Revolving Credit Facility, the maximum consolidated total leverage ratio financial covenant applies unless the Company elects the consolidated senior secured leverage ratio financial covenant in lieu of the consolidated total leverage ratio. During the second quarter of 2026, the Company elected to implement the consolidated senior secured leverage ratio in accordance with the terms of the 2025 Revolving Credit Facility. We were in compliance with the 2025 Revolving Credit Facility’s financial covenants at January 30, 2026. We expect to be in compliance with the 2025 Revolving Credit Facility’s financial covenants for the term of the facility.

Current wording

Our 2025 Revolving Credit Facility contains customary financial covenants, which include maintenance of a maximum consolidated senior secured leverage ratio and a minimum consolidated interest coverage ratio. We were in compliance with the 2025 Revolving Credit Facility’s financial covenants at May 01, 2026. We currently expect to be in compliance with the 2025 Revolving Credit Facility’s financial covenants for the term of the facility.

Previous wording

Additionally, on June 13, 2025, we used approximately $145,900 of the net proceeds from the 2030 Notes for the repurchase of $150,000 aggregate principal amount of the 2026 Notes. The remaining $150,000 aggregate principal amount of the 2026 Notes matures on June 15, 2026, unless earlier converted, repurchased or redeemed. The 2026 Notes are senior, unsecured obligations of the Company and bear cash interest at a rate of 0.625% per annum, payable semi-annually in arrears on June 15 and December 15 of each year.

Current wording

Additionally, on June 13, 2025, we used approximately $145,900 of the net proceeds from the 2030 Notes for the repurchase of $150,000 aggregate principal amount of the 2026 Notes. The remaining $150,000 aggregate principal amount of the 2026 Notes matures on June 15, 2026, unless earlier converted, repurchased or redeemed. The 2026 Notes are senior, unsecured obligations of the Company and bear cash interest at a rate of 0.625% per annum, payable semi-annually with the final interest payment on June 15, 2026.

Previous wording

During the first six months of 2026, we paid a regular dividend of $0.50 per share and declared a dividend of $0.25 per share that was subsequently paid on February 11, 2026, to shareholders of record on January 16, 2026. In addition, in the third quarter of 2026, our Board of Directors approved a regular dividend payable on May 13, 2026 to shareholders of record as of April 10, 2026 of $0.25 per share.

Current wording

During the first nine months of 2026, we paid a regular dividend of $0.75 per share and declared a dividend of $0.25 per share that was subsequently paid on May 13, 2026, to shareholders of record on April 10, 2026. In addition, in the fourth quarter of 2026, our Board of Directors approved a regular dividend payable on August 12, 2026 to shareholders of record as of July 17, 2026 of $0.25 per share.

Previous wording

Our criteria for share repurchases are that they be accretive to expected net income per share and are within the limits imposed by our debt commitments. In the first quarter of 2026, our Board of Directors approved a share repurchase authorization to repurchase shares of the Company’s outstanding common stock at management’s discretion up to a total value of $100,000. We did not repurchase any shares of our common stock in the first six months of 2026.

Current wording

Our criteria for share repurchases are that they be accretive to expected net income per share and are within the limits imposed by our debt commitments. In the first quarter of 2026, our Board of Directors approved a share repurchase authorization to repurchase shares of the Company’s outstanding common stock at management’s discretion up to a total value of $100,000. We did not repurchase any shares of our common stock in the first nine months of 2026.

Previous wording

During the first six months of 2026, we issued 83,065 shares of our common stock resulting from the vesting of share-based compensation awards. Related tax withholding payments on these share-based compensation awards resulted in a net use of cash of $1,934.

Current wording

During the first nine months of 2026, we issued 83,736 shares of our common stock resulting from the vesting of share-based compensation awards. Related tax withholding payments on these share-based compensation awards resulted in a net use of cash of $1,943.

Previous wording

Like many other restaurant companies, we are able to, and often do, operate with negative working capital. We had negative working capital of $297,266 at January 30, 2026 as compared to negative working capital of $312,491 at August 01, 2025. The change in working capital at January 30, 2026 as compared to August 01, 2025 primarily resulted from lower accounts payable due to timing of payments and lower incentive compensation accruals due to lower performance in the first six months of 2026 partially offset by the decrease in cash and the increase in sales our gift cards during the holiday shopping season.

Current wording

Like many other restaurant companies, we are able to, and often do, operate with negative working capital. We had negative working capital of $289,503 at May 01, 2026 as compared to negative working capital of $312,491 at August 01, 2025. The change in working capital at May 01, 2026 as compared to August 01, 2025 primarily resulted from lower accounts payable due to timing of payments partially offset by the decrease in cash.