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 31, 2025, we operated 657 Cracker Barrel stores in 43 states and 69 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 02, 2025, we operated 658 Cracker Barrel stores in 43 states and 70 Maple Street Biscuit Company (“MSBC”) locations in ten states.

Previous wording

MD&A provides information which management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. MD&A should be read in conjunction with the (i) condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q and (ii) audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 02, 2024 (the “2024 Form 10-K”). Except for specific historical information, many of the matters discussed in this report may express or imply projections of items such as revenues or expenditures, estimated capital expenditures, compliance with debt covenants, plans and objectives for future operations, store economics, inventory shrinkage, growth or initiatives, expected future economic performance or the expected outcome or impact of pending or threatened litigation. These and similar statements regarding events or results which we expect will or may occur in the future are forward-looking statements concerning matters that involve risks, uncertainties and other factors which may cause our actual results and performance to differ materially from those expressed or implied by such statements. All forward-looking information is provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these risks, uncertainties and other factors. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “trends,” “assumptions,” “target,” “guidance,” “outlook,” “opportunity,” “future,” “plans,” “goals,” “objectives,” “expectations,” “near-term,” “long-term,” “projection,” “may,” “will,” “would,” “could,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “potential,” “regular,” “should,” “projects,” “forecasts” or “continue” (or the negative or other derivatives of each of these terms) or similar terminology. We believe the assumptions underlying any forward-looking statements are reasonable; however, any of the assumptions could be inaccurate, and therefore, actual results may differ materially from those projected in or implied by the forward-looking statements. In addition to the risks of ordinary business operations, and those discussed or described in this report or in information incorporated by reference into this report, factors and risks that may result in actual results differing from this forward-looking information include, but are not limited to risks and uncertainties associated with inflationary conditions with respect to the price of commodities, ingredients, transportation, distribution and labor; disruptions to our restaurant or retail supply chain; our ability to manage retail inventory and merchandise mix; our ability to sustain or the effects of plans intended to improve operational or marketing execution and performance, inclu…

Excerpt shortened here; the source contains the full paragraph.

Current wording

All dollar amounts reported or discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) are shown in thousands, except per share amounts and certain statistical information (e.g., number of stores). References to years in MD&A are to our fiscal year unless otherwise noted. MD&A provides information which management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. MD&A should be read in conjunction with the (i) condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q and (ii) audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 02, 2024 (the “2024 Form 10-K”). Except for specific historical information, many of the matters discussed in this report may express or imply projections of items such as revenues or expenditures, estimated capital expenditures, compliance with debt covenants, plans and objectives for future operations, store economics, inventory shrinkage, growth or initiatives, expected future economic performance or the expected outcome or impact of pending or threatened litigation. These and similar statements regarding events or results which we expect will or may occur in the future are forward-looking statements concerning matters that involve risks, uncertainties and other factors which may cause our actual results and performance to differ materially from those expressed or implied by such statements. All forward-looking information is provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these risks, uncertainties and other factors. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “trends,” “assumptions,” “target,” “guidance,” “outlook,” “opportunity,” “future,” “plans,” “goals,” “objectives,” “expectations,” “near-term,” “long-term,” “projection,” “may,” “will,” “would,” “could,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “potential,” “regular,” “should,” “projects,” “forecasts” or “continue” (or the negative or other derivatives of each of these terms) or similar terminology. We believe the assumptions underlying any forward-looking statements are reasonable; however, any of the assumptions could be inaccurate, and therefore, actual results may differ materially from those projected in or implied by the forward-looking statements. In addition to the risks of ordinary business operations, and those discussed or described in this report or in information incorporated by reference into this report, factors and risks that may result in actual results differing from this forward-looking information include, but are not limited to risks and uncertainties associated with inflationary conditions wit…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We believe there are significant challenges in the macroeconomic outlook for the coming quarters, including continued volatility of inflation and interest rates, high consumer debt levels and lower savings rates, as well as the potential uncertainty associated with the geopolitical environment, among other factors. However, despite these challenges, we remain focused on delivering long-term growth and returns for shareholders. Our strategic transformation plan is built on the following five pillars of our strategy:

Current wording

We believe there are significant challenges in the macroeconomic outlook for the coming quarters, including continued volatility of inflation and interest rates, 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. However, despite these challenges, we remain focused on delivering long-term growth and returns for shareholders. Our strategic transformation plan is built on the following five pillars of our strategy:

Previous wording

Total revenue for the second quarter and first six months of 2025 increased 1.5% and 2.0%, respectively, as compared to the same periods in the prior year.

Current wording

Total revenue for the third quarter and first nine months of 2025 increased 0.5% and 1.5%, respectively, as compared to the same periods in the prior year.

Previous wording

For the second quarter and first six months of 2025, our comparable store restaurant sales increases resulted primarily from the average check increases partially offset by the guest traffic decreases. For the second quarter and first six months of 2025, the average check increases included average menu price increases of 6.0% and 5.4%, respectively.

Current wording

For the third quarter and first nine months of 2025, our comparable store restaurant sales increases resulted primarily from the average check increases partially offset by the guest traffic decreases. For the third quarter and first nine months of 2025, the average check increases included average menu price increases of 4.9% and 5.2%, respectively.

Previous wording

Our retail sales are made substantially to our restaurant guests. For the second quarter of 2025, our comparable store retail sales increase resulted primarily from strong performance in the apparel merchandise category partially offset by the guest traffic decrease. For the first six months of 2025, our comparable store retail sales decrease resulted primarily from the guest traffic decrease.

Current wording

Our retail sales are made substantially to our restaurant guests. For the third quarter and first nine months of 2025, our comparable store retail sales decreases resulted primarily from the guest traffic decreases.

Previous wording

The decreases in guest traffic are primarily the result of lower consumer demand arising from multiple macroeconomic factors, including inflationary pressures, higher consumer debt levels and lower savings rates.

Current wording

The decreases in guest traffic are primarily the result of lower consumer demand arising from multiple macroeconomic factors, including inflationary pressures, higher consumer debt levels and lower savings rates as well as the potential uncertainty associated with the geopolitical environment and global trade.

Previous wording

The decreases in restaurant cost of goods sold as a percentage of restaurant revenue for the second quarter and first six months of 2025 as compared to the same periods in the prior year were primarily the result of our menu price increases and a shift to lower cost menu items. Commodity inflation was 1.3% and 1.6%, respectively, in the second quarter and first six months of 2025. We presently expect the rate of commodity inflation to be approximately 2% to 3% in 2025.

Current wording

Commodity inflation was 2.9% and 2.0%, respectively, in the third quarter and first nine months of 2025. We presently expect the rate of commodity inflation to be in the mid 2% range in 2025.

Previous wording

The increase in retail cost of goods sold as a percentage of retail revenue in the second quarter of 2025 as compared to the same period in the prior year resulted primarily from higher markdowns partially offset by higher vendor allowances and higher initial margin.

Current wording

The decrease in retail cost of goods sold as a percentage of retail revenue in the third quarter of 2025 as compared to the same period in the prior year resulted primarily from higher vendor allowances partially offset by higher markdowns and discounts.

Previous wording

The decrease in retail cost of goods sold as a percentage of retail revenue in the first six months of 2025 as compared to the same period in the prior year resulted primarily from higher vendor allowances and higher initial margin partially offset by higher markdowns.

Current wording

The decrease in retail cost of goods sold as a percentage of retail revenue in the first nine months of 2025 as compared to the same period in the prior year resulted primarily from higher vendor allowances partially offset by higher markdowns.

Previous wording

The decreases in store hourly labor and store management compensation as a percentage of total revenue for the second quarter and first six months of 2025 as compared to the same periods in the prior year resulted primarily from menu price increases being higher than wage inflation. Additionally, store hourly labor benefited from improved productivity.

Current wording

The decreases in store hourly labor and store management compensation as a percentage of total revenue for the third quarter and first nine months of 2025 as compared to the same periods in the prior year resulted primarily from menu price increases exceeding wage inflation. Additionally, store hourly labor benefited from improved productivity, driven by our back-of-the-house optimization initiatives.

Previous wording

We presently expect the rate of wage inflation to be approximately 3% in 2025.

Current wording

We presently expect the rate of wage inflation to be in the mid 2% range in 2025.

Previous wording

The increases in other wages as a percentage of total revenue for the second quarter and first six months of 2025 as compared to the same periods in the prior year resulted primarily from revisions in our employee benefits policy that resulted in a reduction in other wages expense in the second quarter and first six months of 2024.

Current wording

The increase in other wages as a percentage of total revenue for the first nine months of 2025 as compared to the same period in the prior year resulted primarily from revisions in our employee benefits policy that resulted in a reduction in other wages expense in the first nine months of 2024.

Previous wording

The increases in store bonus expense as a percentage of total revenue for the second quarter and first six months of 2025 as compared to the same periods in the prior year resulted from better performance against financial objectives in 2025 as compared to the prior year.

Current wording

The increase in store bonus expense as a percentage of total revenue for the first nine months of 2025 as compared to the same period in the prior year resulted from better performance against financial objectives in 2025 as compared to the prior year.

Previous wording

This percentage change for the second quarter of 2025 as compared to the same period in the prior year resulted primarily from higher store occupancy costs. The increase in store occupancy costs as a percentage of total revenue for the second quarter of 2025 as compared to the same period in the prior year resulted primarily from higher depreciation expense and higher maintenance expense. The increase in depreciation expense resulted primarily from higher capital expenditures. The increase in maintenance expense resulted primarily from increased spending related to strategic initiatives and preventative maintenance services.

Current wording

The increase in store occupancy costs as a percentage of total revenue for the third quarter of 2025 as compared to the same period in the prior year resulted primarily from higher depreciation expense due to higher capital expenditures.

Previous wording

The increase in store occupancy costs as a percentage of total revenue for the first six months of 2025 as compared to the same period in the prior year period resulted primarily from higher depreciation expense and higher maintenance expense partially offset by lower utilities expense. The increase in depreciation expense resulted primarily from higher capital expenditures. The increase in maintenance expenses resulted primarily from increased spending related to strategic initiatives and preventative maintenance services. The decrease in utilities expense resulted primarily from lower electricity usage.

Current wording

The increase in store occupancy costs as a percentage of total revenue for the first nine months of 2025 as compared to the same period in the prior year period resulted primarily from higher depreciation expense due to higher capital expenditures.

Previous wording

The increase in other store operating expense as a percentage of total revenue for the first six months of 2025 as compared to the same period in the prior year resulted primarily from higher conference expense due to a biennial district manager conference held in the first quarter of 2025, costs associated with our off-premise business and hurricane-related expenses incurred in the first quarter of 2025.

Current wording

The increase in other store operating expense as a percentage of total revenue for the first nine months of 2025 as compared to the same period in the prior year resulted primarily from higher conference expense due to a biennial district manager conference held in the first quarter of 2025, costs associated with our off-premise business and hurricane-related expenses incurred in the first quarter of 2025.

Previous wording

This percentage change for the second quarter and first six months of 2025 as compared to the same periods in the prior year resulted primarily from higher professional fees related to legal fees and proxy contest expenses. Additionally, the Company incurred higher costs of approximately $2,300 associated with the Company’s strategic transformation plan for the first six months of 2025 as compared to the same period in the prior year. Higher legal fees for the first six months of 2025 included an approximate $3,300 charge in connection with our settlement of a series of wage and hour arbitrations. The Company incurred proxy contest expenses of $5,263 and $8,220, respectively, in the second quarter and first six months of 2025 related to a proxy contest in connection with the Company’s 2024 annual shareholders meeting held on November 21, 2024.

Current wording

The percentage change in general and administrative expenses as a percentage of total revenue in the first nine months of 2025 as compared to the same period in the prior year was attributable to professional fees. The Company incurred proxy contest expenses of $8,220 in the first nine months of 2025 related to a proxy contest in connection with the Company’s 2024 annual shareholders meeting held on November 21, 2024. Higher legal fees for the first nine months of 2025 included an approximate $3,300 charge in connection with our settlement of a series of wage and hour arbitrations. These fees were partially offset by lower costs associated with the Company’s strategic transformation plan for the first nine months of 2025 as compared to the same period in the prior year.

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 in three MSBC locations and two Cracker Barrel locations. No impairment was recorded in the second quarter and first six months of 2024. One Cracker Barrel store was closed in the second quarter and first six months of 2025 resulting in closing costs of $288. No stores were closed in the second quarter or first six months of 2024.

Current wording

During the third quarter of 2025, we recorded impairment charges of $718 as a result of the deterioration in operating performance in 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 in 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

Interest expense for the second quarter of 2025 as compared to the same period in the prior year remained relatively constant. The increase in interest expense for the first six months of 2025 as compared to the same period in the prior year resulted primarily from higher weighted average debt levels under our 2022 Revolving Credit Facility (as defined below).

Current wording

Interest expense for the third quarter of 2025 as compared to the same period in the prior year resulted primarily from lower average interest rates partially offset by higher weighted average debt levels under our 2022 Revolving Credit Facility (as defined below). The increase in interest expense for the first nine months of 2025 as compared to the same period in the prior year resulted primarily from higher weighted average debt levels under our 2022 Revolving Credit Facility partially offset by lower average interest rates.

Previous wording

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

Current wording

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

Previous wording

The increase in the effective tax rate in the second quarter of 2025 as compared to the prior year period is primarily due to favorable state audit settlements obtained in the second quarter of 2024. The decrease in the effective tax rate in the first six months of 2025 as compared to the prior year period is primarily due to an increase in the impact of employment credits from the use of the discrete-period computation method.

Current wording

The decrease in the effective tax rate in the third quarter of 2025 as compared to the same period in the prior year and the increase in the effective tax rate in the first nine months of 2025 as compared to the same period in the prior year are primarily due to the higher proportion of employment credits in relation to income (loss) before taxes in the prior year periods.

Previous wording

The Company’s quarterly provision (benefit) for income taxes has historically been calculated using the annualized effective tax rate method (“AETR method”) which applies an estimated annual effective tax rate to pre-tax income or loss. Beginning in the third quarter of 2024, the Company records its interim income tax provision (benefit) using the discrete-period computation method, as allowed under Accounting Standards Codification 740-240,*Accounting for Income Taxes – Interim Reporting.*The Company recorded its interim income tax provision (benefit) using the discrete-period computation method as of January 31, 2025. Use of the 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 annualized effective tax rate.

Current wording

The Company records its interim income tax benefit using the discrete-period computation method, as of May 02, 2025 and April 26, 2024, as allowed under Accounting Standards Codification 740-240,*Accounting for Income Taxes – Interim Reporting.*Use of the annualized effective tax rate 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 annualized effective tax rate.

Previous wording

We presently expect our effective tax rate for 2025 to be approximately (13%) to (19%).

Current wording

We presently expect our effective tax rate for 2025 to be approximately (11%) to (17%).

Previous wording

Our primary sources of liquidity are cash generated from our operations and our borrowing capacity under our 2022 Revolving Credit Facility. Cash generated from operations, together with our borrowing capacity under the 2022 Revolving Credit Facility, were sufficient to finance all of our growth, dividend payments, working capital needs, interest payments on long-term debt obligations and other cash payment obligations in the first six months of 2025. We believe that cash on hand at January 31, 2025, along with cash expected to be generated from our operating activities and the borrowing capacity under our revolving credit facility, will be sufficient to finance our continuing operations, our strategic transformation plan and continuing expansion plans, debt service, dividend payments, capital expenditures and working capital needs for the next twelve months and thereafter. Our ability to draw on our 2022 Revolving Credit Facility is subject to the satisfaction of the provisions of the credit facility, as amended, and we believe we will be able to refinance our 2022 Revolving Credit Facility and other debt instruments prior to maturity.

Current wording

On May 16, 2025, we entered into a five-year $800,000 credit facility (the “2025 Credit Facility”). The 2025 Credit Facility consists of a $550,000 revolving credit facility (the “2025 Revolving Credit Facility”), which includes a $25,000 swingline subfacility and a $75,000 letter of credit subfacility, and a $250,000 delayed draw term loan facility. The 2025 Credit Facility also contains an option for the Company to increase the credit facility by $200,000. We believe that cash on hand at May 02, 2025, along with cash expected to be generated from our operating activities and the borrowing capacity under our 2025 Credit Facility, will be sufficient to finance our continuing operations, our strategic transformation plan and continuing expansion plans, debt service, dividend payments, capital expenditures and working capital needs for the next twelve months and thereafter. Our ability to draw on our 2025 Credit Facility is subject to the satisfaction of the provisions of the credit facility, as amended, and we believe we will be able to refinance our 2025 Credit Facility and other debt instruments prior to maturity. See Note 11 to our Condensed Consolidated Financial Statements for further information on our 2025 Credit Facility.

Previous wording

Our operating activities provided net cash of $93,693 for the first six months of 2025 as compared to $61,879 net cash provided during the first six months of 2024. This increase resulted primarily from the timing of cash receipts for accounts receivable and timing of payments for accounts payable and payroll.

Current wording

Our operating activities provided net cash of $116,677 for the first nine months of 2025 as compared to $99,456 net cash provided during the first nine months of 2024. This increase resulted primarily from the timing of cash receipts for accounts receivable and timing of payments for accounts payable and certain taxes.

Previous wording

Capital expenditures (purchase of property and equipment) net of proceeds from insurance recoveries were $76,986 for the first six months of 2025 as compared to $51,080 for the same period in the prior year. Our capital expenditures consisted primarily of capital investments for existing stores, new store locations and capital expenditures for strategic initiatives. The increase in capital expenditures in the first six months of 2025 as compared to the first six months of 2024 resulted primarily from our maintenance and remodel initiatives, including as part of our strategic transformation plan.

Current wording

Capital expenditures (purchase of property and equipment) net of proceeds from insurance recoveries were $113,214 for the first nine months of 2025 as compared to $80,081 for the same period in the prior year. Our capital expenditures consisted primarily of capital investments for existing stores, new store locations and capital expenditures for strategic initiatives. The increase in capital expenditures in the first nine months of 2025 as compared to the first nine months of 2024 resulted primarily from our maintenance and remodel initiatives as part of our strategic transformation plan.

Previous wording

As part of our strategic transformation plan, we have modified our capital allocation policy and currently expect to increase our capital expenditures over the three-year period from 2025 to 2027 to approximately $600,000 to $700,000, of which we expect to expend $160,000 to $180,000 in 2025. This increase includes expansion of our maintenance and remodel initiatives as well as additional technology improvements. This increase also includes the acquisition of sites and construction costs of new Cracker Barrel and MSBC locations that have opened or that we expect to open during 2025. We intend to fund our capital expenditures with cash generated by operations and borrowings under our 2022 Revolving Credit Facility, as necessary.

Current wording

As part of our strategic transformation plan, we have modified our capital allocation policy and currently expect to increase our capital expenditures over the three-year period from 2025 to 2027 to approximately $600,000 to $700,000, of which we expect to expend $160,000 to $170,000 in 2025. This increase in capital expenditures includes expansion of our maintenance and remodel initiatives as well as additional technology improvements. This increase also includes the acquisition of sites and construction costs of new Cracker Barrel and MSBC locations that have opened or that we expect to open during 2025. We intend to fund our capital expenditures with cash generated by operations and borrowings under our 2025 Credit Facility, as necessary.

Previous wording

On June 17, 2022, we entered into a five-year $700,000 revolving credit facility (the “2022 Revolving Credit Facility”). The 2022 Revolving Credit Facility contains an option for the Company to increase the revolving credit facility by $200,000.

Current wording

On June 17, 2022, we entered into a five-year $700,000 revolving credit facility (the “2022 Revolving Credit Facility”). The 2022 Revolving Credit Facility contains an option for the Company to increase the revolving credit facility by $200,000. On May 16, 2025, the Company entered into a five-year $800,000 credit facility (the “2025 Credit Facility”). The 2025 Credit Facility consists of a $550,000 revolving credit facility, which includes a $25,000 swingline subfacility and a $75,000 letter of credit subfacility, and a $250,000 delayed draw term loan facility. The 2025 Credit Facility also contains an option for the Company to increase the credit facility by $200,000.

Previous wording

At January 31, 2025, we had $174,000 of outstanding borrowings under the 2022 Revolving Credit Facility and $34,004 of standby letters of credit related to securing reserved claims under our workers’ compensation insurance and certain sale and leaseback transactions, which reduce our borrowing availability under the 2022 Revolving Credit Facility. At January 31, 2025, we had $491,996 in borrowing availability under our 2022 Revolving Credit Facility. During the first six months of 2025, we borrowed $199,500 and repaid $205,500 under the 2022 Revolving Credit Facility.

Current wording

At May 02, 2025, we had $191,500 of outstanding borrowings under the 2022 Revolving Credit Facility and $34,004 of standby letters of credit related to securing reserved claims under our workers’ compensation insurance and certain sale and leaseback transactions, which reduce our borrowing availability under the 2022 Revolving Credit Facility. At May 02, 2025, we had $474,496 in borrowing availability under our 2022 Revolving Credit Facility. During the first nine months of 2025, we borrowed $308,500 and repaid $297,000 under the 2022 Revolving Credit Facility.

Previous wording

Our 2022 Revolving Credit Facility contains customary financial covenants, which include maintenance of a maximum consolidated total senior secured leverage ratio and a minimum consolidated interest coverage ratio. We were in compliance with the 2022 Revolving Credit Facility’s financial covenants at January 31, 2025, and we expect to be in compliance with the 2022 Revolving Credit Facility’s financial covenants for the remaining term of the facility.

Current wording

Our 2022 Revolving Credit Facility contains customary financial covenants, which include maintenance of a maximum consolidated total senior secured leverage ratio and a minimum consolidated interest coverage ratio. We were in compliance with the 2022 Revolving Credit Facility’s financial covenants at May 02, 2025. Our 2025 Credit Facility also contains customary financial covenants, which include maintenance of a maximum consolidated total leverage ratio and a minimum consolidated interest coverage ratio. We expect to be in compliance with the 2025 Credit Facility’s financial covenants for the term of the facility.

Previous wording

Our 2022 Revolving Credit Facility imposes restrictions on the amount of dividends we are permitted to pay and the amount of shares we are permitted to repurchase. Under the 2022 Revolving Credit Facility, provided there is no default existing and the total of our availability under the 2022 Revolving Credit Facility plus our cash and cash equivalents on hand is at least $100,000 (the “Cash Availability”), we may declare and pay cash dividends on shares of our common stock and repurchase shares of our common stock (1) in an unlimited amount if at the time the dividend or the repurchase is made our consolidated total senior secured leverage ratio is 2.75 to 1.00 or less and (2) in an aggregate amount not to exceed $100,000 in any fiscal year if our consolidated total leverage ratio is greater than 2.75 to 1.00 at the time the dividend or repurchase is made; notwithstanding (1) and (2), so long as immediately after giving effect to the payment of any such dividends, Cash Availability is at least $100,000, we may declare and pay cash dividends on shares of our common stock in an aggregate amount not to exceed in any fiscal year the product of the aggregate amount of dividends declared in the fourth quarter of the immediately preceding fiscal year multiplied by four.

Current wording

Our 2022 Revolving Credit Facility imposes restrictions on the amount of dividends we are permitted to pay and the amount of shares we are permitted to repurchase. Under the 2022 Revolving Credit Facility, provided there is no default existing and the total of our availability under the 2022 Revolving Credit Facility plus our cash and cash equivalents on hand is at least $100,000 (the “Cash Availability”), we may declare and pay cash dividends on shares of our common stock and repurchase shares of our common stock (1) in an unlimited amount if at the time the dividend or the repurchase is made our consolidated total senior secured leverage ratio is 2.75 to 1.00 or less and (2) in an aggregate amount not to exceed $100,000 in any fiscal year if our consolidated total leverage ratio is greater than 2.75 to 1.00 at the time the dividend or repurchase is made; notwithstanding (1) and (2), so long as immediately after giving effect to the payment of any such dividends, Cash Availability is at least $100,000, we may declare and pay cash dividends on shares of our common stock in an aggregate amount not to exceed in any fiscal year the product of the aggregate amount of dividends declared in the fourth quarter of the immediately preceding fiscal year multiplied by four. See Note 11 to our Condensed Consolidated Financial Statements for information on restrictions on the amount of dividends we are permitted to pay and the amount of shares we are permitted to repurchase under the 2025 Credit Facility.

Previous wording

During the first six months of 2025, 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 12, 2025, to shareholders of record on January 17, 2025. In addition, in the third quarter of 2025, our Board of Directors approved a regular dividend payable on May 14, 2025 to shareholders of record as of April 11, 2025 of $0.25 per share.

Current wording

During the first nine months of 2025, 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 14, 2025, to shareholders of record on April 11, 2025. In addition, in the fourth quarter of 2025, our Board of Directors approved a regular dividend payable on August 13, 2025 to shareholders of record as of July 18, 2025 of $0.25 per share.

Previous wording

During the first six months of 2025, we issued 60,438 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 $1,379.

Current wording

During the first nine months of 2025, we issued 63,908 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 $1,428.

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 $173,982 at January 31, 2025 as compared to negative working capital of $175,993 at August 02, 2024. The change in working capital at January 31, 2025 as compared to August 02, 2024 primarily resulted from the timing of certain payments partially offset by the decrease in retail inventory levels and an increase in sales of 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 $146,208 at May 02, 2025 as compared to negative working capital of $175,993 at August 02, 2024. The change in working capital at May 02, 2025 as compared to August 02, 2024 primarily resulted from the timing of certain payments partially offset by the decrease in retail inventory levels.

Previous wording

There have been no material changes in our material commitments other than in the ordinary course of business since the end of 2024. Refer to the section entitled “Liquidity and Capital Resources” presented in the MD&A of our 2024 Form 10-K for additional information regarding our material commitments.

Current wording

Except for entry into the 2025 Credit Facility, there have been no material changes in our material commitments other than in the ordinary course of business since the end of 2024. See Note 11 to our Condensed Consolidated Financial Statements for information on the 2025 Credit Facility. Refer to the section entitled “Liquidity and Capital Resources” presented in the MD&A of our 2024 Form 10-K for additional information regarding our material commitments.