Cracker Barrel Reports 37% Increase in First-Quarter EPS

Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL):

• Fully diluted net income per share of $0.78 for the first quarter of fiscal 2010, an increase of 37% compared with the prior-year quarter

• Revenue for the first quarter increased 1.3% to $581.2 million

• Comparable store restaurant sales increased 0.6%

• Comparable store retail sales decreased 4.8%

• Operating income margin in the first quarter was 6.5% compared with 5.7% in the prior-year quarter

Cracker Barrel Old Country Store, Inc. ('Cracker Barrel,' or the 'Company') (Nasdaq: CBRL) today reported net income per diluted share of $0.78 for the first quarter of fiscal 2010, compared with $0.57 per diluted share in the first quarter of fiscal 2009, an increase of 36.8%. Net income for the first quarter of fiscal 2010 was $18.0 million compared with $12.8 million in the first quarter of fiscal 2009, which reflects a 16.7% increase in operating income and lower interest expense.

First-Quarter Fiscal 2010 Results

Revenue

In the first quarter of fiscal 2010, total revenue of $581.2 million represented an increase of 1.3% from the first quarter of fiscal 2009. Comparable store restaurant sales for the period increased 0.6% over the prior-year period, which included a 2.0% higher average check. The average menu price increase for the quarter was approximately 2.7% compared with last year. Comparable store retail sales were down 4.8% for the quarter. During the quarter, the Company opened three new Cracker Barrel Old Country Store units. Since the end of the first quarter, the Company has opened two additional stores. Two more units are planned for the remainder of fiscal 2010.

Operating Income

In the first quarter of fiscal 2010, operating income of $38.0 million was 6.5% of total revenue compared with $32.6 million, or 5.7% of total revenue, in the first quarter of fiscal 2009. The increase in operating income was the result of higher sales, lower food costs and lower other store operating expenses despite the additional expense from the sale/leaseback completed in the fourth quarter of fiscal 2009 and higher general and administrative expenses. The increase in general and administrative expense was the result of higher bonus accruals than last year.

Commenting on the first-quarter results, Cracker Barrel Old Country Store, Inc. Chairman, President and Chief Executive Officer Michael A. Woodhouse said, 'These results demonstrate the progress we have made in providing solid value to our guests, which includes exciting new menu choices and an appealing retail assortment. For the first time since the third quarter of fiscal 2008, we reported positive comparable restaurant sales for the quarter. At the same time we continue to outperform the Knapp-Track(TM) index, most recently by more than three percentage points for guest traffic and almost six percentage points in sales. In the first quarter, lower food costs, positive sales leverage and lower operating expenses produced significantly better margins at the store operating level compared with a year ago.'

Fiscal 2010 Outlook Update

The Company commented that its outlook for fiscal 2010 reflects many assumptions, the accuracy of which is not yet known. Based on current trends and estimates, the Company presently expects fiscal 2010 total revenue to be in the range of flat to an increase of approximately 2.0% over revenue in fiscal 2009. The revenue increase reflects the expected opening of seven new Cracker Barrel units during the year, projected comparable store restaurant sales between a decrease of 0.5% to an increase of 1.0% and comparable store retail sales between a decrease of 2.0% to flat. Depreciation for the year is expected to be $60 to $62 million. The Company expects fiscal 2010 operating income margin to be approximately 6.2% to 6.5% compared with 6.0% in fiscal 2009. Net interest expense is estimated to be $48 to $50 million, and diluted shares outstanding are expected to average approximately 23 million. The Company expects its full year 2010 effective tax rate to be between 27.5% and 28.5%. Based on the assumptions outlined above, full-year income from continuing operations per diluted share is projected to be in the range of $3.05 to $3.30. The Company expects capital expenditures during fiscal 2010 to be between $70 and $75 million.

Commenting on the outlook, Mr. Woodhouse said, 'We are pleased with our recent quarterly results and I am excited about what we can accomplish going forward. We continue to work on a number of initiatives to simplify our business, provide a better guest experience, and improve our profitability. As we see the positive results of these efforts, I anticipate further progress as our execution becomes more consistent. Meanwhile, the positive momentum we gained in the first quarter leads us to increase our earnings per share guidance for the year. As the 'Best Family Dining Restaurant' in the Restaurants and Institutions 'Choice in Chains' consumer survey for 19 consecutive years, we are committed to deliver the genuine Cracker Barrel hospitality that generates strong loyalty to the brand and brings our guests back day-after-day.'

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