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Item 8. Financial Statements and Supplementary Data

2025-09-26 compared with 2024-09-27 · 202 added, 93 removed, 597 unchanged (33% of the section changed)

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We have audited the accompanying consolidated balance sheets of Cracker Barrel Old Country Store, Inc.

and subsidiaries (the "Company") as of August 2, 2024, and July 28, 2023, and the related consolidated statements of income, consolidated statements of changes in shareholders’ equity, and consolidated statements of cash flows, for each of the three years in the period ended August 2, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 2, 2024, and July 28, 2023, and the results of its operations and its cash flows for each of the three years in the period ended August 2, 2024, in conformity with accounting principles generally accepted in the United States of America.

and subsidiaries (the "Company") as of August 1, 2025, and August 2, 2024, and the related consolidated statements of income, changes in shareholders’ equity, and cash flows, for each of the three years in the period ended August 1, 2025, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 1, 2025, and August 2, 2024, and the results of its operations and its cash flows for each of the three years in the period ended August 1, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of August 1, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated September 26, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting.

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August 01,2025

August 02,2024

Current Assets:

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Total current assets

Property and equipment

Buildings and improvements

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August 01, 2025

July 28, 2023

August 02, 2024

July 28, 2023

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Operating income

Other income:

Gain on extinguishment of debt

Interest expense, net

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Purchases and retirement of common stock

( 1,248,184 )

Cumulative-effect of change in accounting principle, net of taxes

Balances at July 28, 2023

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Issuance of share-based compensation awards, net of shares withheld for employee taxes

Purchases and retirement of common stock

Balances at July 28, 2023

Balances at August 02, 2024

Total comprehensive income

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Issuance of share-based compensation awards, net of shares withheld for employee taxes

Purchases and retirement of common stock

Purchase of capped call

Deferred tax asset on capped call

Unwinding of bond hedge and warrants

Deferred tax impact of unwinding bond hedge

Balances at August 01, 2025

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August 01, 2025

July 28, 2023

August 02, 2024

July 28, 2023

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Amortization of debt issuance costs

Gain on extinguishment of debt

Loss on disposition of property and equipment

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Income taxes receivable

Prepaid expenses and other current assets

Prepaids and other current assets

Accounts payable

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Proceeds from sale of property and equipment

Acquisition of business, net of cash acquired

Net cash used in investing activities

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Principal payments under long-term debt

Net proceeds from settlement of bond hedge and warrants

Repayment of convertible senior notes

Proceeds from issuance of convertible senior notes

Payment for capped call option related to convertible senior notes

Taxes withheld from issuance of share-based compensation awards

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Net cash used in financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

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Fiscal year – The Company’s fiscal year ends on the Friday nearest July 31st and each quarter consists of thirteen weeks unless noted otherwise.

The periods presented in the Company’s financial statements are the fiscal years ended August 02, 2024 (“2024”), July 28, 2023 (“2023”) and July 29, 2022 (“2022”), respectively.

The periods presented in the Company’s financial statements are the fiscal years ended August 01, 2025 (“2025”), August 02, 2024 (“2024”) and July 28, 2023 (“2023”), respectively.

Each of these periods has 52 weeks except for 2024, which consisted of 53 weeks.

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During 2025, 2024 and 2023, the Company recorded impairment charges of $ 18,391 , $ 15,616 and $ 11,692 , respectively, for long-lived assets which are included in the impairment and store closing costs line on the Consolidated Statements of Income.

Goodwill and other intangible assets – The Company accounts for all transactions that represent business combinations using the acquisition method of accounting, where the identifiable assets acquired and the liabilities assumed are recognized and measured at their fair values on the date the Company obtains control in the acquiree.

Such fair values that are not finalized for reporting periods following the acquisition date are estimated and recorded as estimated amounts.

Adjustments to these estimated amounts during the measurement period (defined as the date through which all information required to identify and measure the consideration transferred, the assets acquired and the liabilities assumed has been obtained, limited to one year from the acquisition date) are recorded when identified.

Goodwill is determined as the excess of the fair value of the consideration conveyed in the acquisition over the fair value of the net assets acquired.

Goodwill and other intangibles are evaluated for impairment annually on June 1 or more frequently if events occur or circumstances change that, more likely than not, reduce the fair value of the reporting unit below its carrying value.

The Company’s goodwill consisted of its 100 % ownership of Maple Street Biscuit Company (“MSBC”), a breakfast and lunch fast casual concept.

In 2024, the Company determined that the entire amount of the goodwill was impaired and recorded an impairment charge of $ 4,690 which is recorded in the goodwill impairment line on the Consolidated Statement of Income.

Other intangibles primarily consist of the MSBC tradename and liquor licenses.

The MSBC tradename was capitalized as an indefinite-lived intangible asset and, at both August 02, 2024 and July 28, 2023, was $ 20,960 .

See Note 8 for additional information regarding impairment charges in 2025 and 2024 related to right-of-use assets.

Other intangible assets – Intangibles primarily consist of the MSBC tradename and liquor licenses.

The MSBC tradename was capitalized as an indefinite-lived intangible asset and, at both August 01, 2025 and August 02, 2024, was $ 20,960 .

The costs of obtaining non-transferable liquor licenses that are directly issued by local government agencies for nominal fees are expensed as incurred.

The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets.

Liquor licenses capitalized as intangible assets were $ 3,365 and $ 2,290 , respectively, at August 02, 2024 and July 28, 2023.

Liquor licenses capitalized as intangible assets were $ 3,365 at both August 01, 2025 and August 02, 2024.

Segment reporting – Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

Using these criteria, the Company manages its business on the basis of one reportable operating segment (see Note 6 for additional information regarding segment reporting).

Using these criteria, the Company manages its business on the basis of one operating and one reportable operating segment.

See Note 6 for additional information regarding segment reporting.

Unredeemed gift cards and certificates – Unredeemed gift cards and certificates represent a liability of the Company related to unearned income and are recorded at their expected redemption value.

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Store pre-opening costs – Start-up costs of a new store are expensed when incurred.

Leases – The Company’s leases are classified as either finance or operating leases.

Leases – The Company’s leases are classified as operating leases.

The Company has ground leases for its leased stores and office space leases that are recorded as operating leases under various non-cancellable operating leases.

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Diluted consolidated net income per share reflects the potential dilution that could occur if securities, options or other contracts to issue common stock were exercised or converted into common stock and is based upon the weighted average number of common and common equivalent shares outstanding during the reporting period.

Common equivalent shares related to nonvested stock awards and units issued by the Company are calculated using the treasury stock method.

The outstanding nonvested stock awards and units issued by the Company represent the only dilutive effects on diluted consolidated net income per share.

The convertible senior notes and related warrants are calculated using the net share settlement option under the if-converted method.

Because the principal amount of the convertible senior notes will be settled in cash with any excess conversion value settled in cash or shares of common stock, the convertible senior notes have been excluded from the computation of diluted earnings per share because the average market price of the Company’s common stock during the reporting period did not exceed the conversion price of $ 159.46 as of August 02, 2024.

Warrants were excluded from the computation of diluted earnings per share since the warrants’ strike price of $ 223.24 was greater than the average market price of the Company’s common stock during the period.

See Note 4 for additional information regarding the Company’s convertible senior notes and Note 13 for additional information regarding additional information regarding net income per share.

Recent Accounting Pronouncements Not Yet Adopted

Common equivalent shares related to stock options and nonvested stock awards and units issued by the Company are calculated using the treasury stock method.

The outstanding stock options and nonvested stock awards and units issued by the Company represent the only dilutive effects on diluted consolidated net income per share.

The 2026 Notes, the 2030 Notes and the warrants related to the 2026 Notes are calculated using the net share settlement option under the if-converted method.

Because the principal amount of the 2026 Notes and the 2030 Notes will be settled in cash with any excess conversion value settled in cash or shares of common stock, the 2026 Notes and the 2030 Notes have been excluded from the computation of diluted consolidated net income per share because the average market price of the Company’s common stock during the reporting period did not exceed the conversion prices of $ 156.34 and $ 72.23 , respectively.

Warrants were excluded from the computation of diluted consolidated net income per share since the warrants’ strike price of $ 218.88 was greater than the average market price of the Company’s common stock during the reporting period.

See Note 4 for additional information regarding the 2026 Notes and the 2030 Notes and Note 13 for additional information regarding additional information regarding net income per share.

Recent Accounting Pronouncements Adopted

Segment Disclosures

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These disclosure requirements should be applied on a retrospective basis.

The Company is currently evaluating the effect of adopting these new disclosure requirements on its annual consolidated financial statements and related disclosures in 2025 as well as interim disclosures beginning in the first quarter of 2026.

The adoption of this guidance had no impact on the Company’s consolidated financial position or results of operations.

See Note 6 for the Company’s segment disclosures.

Debt With Conversion and other Options

In November 2024, the FASB issued guidance which clarifies the accounting for settlements of convertible debt instruments that include inducement offers, specifically when the consideration transferred includes all amounts (in form and amount) issuable under the original conversion terms of the instrument.

Under the new guidance, if the inducement offer includes all consideration issuable under the original conversion privileges, the transaction is accounted for as an induced conversion, and only the fair value of any additional consideration is recognized as an expense.

No gain or loss is recognized on the conversion of the original debt.

If the criteria are not met, the transaction is accounted for as a debt extinguishment.

This guidance is effective for all entities for annual reporting periods.

Early adoption is permitted.

The Company early adopted this guidance on a retrospective basis in the fourth quarter of 2025.

See Note 4 for a discussion of the Company’s repurchase of $ 150,000 aggregate principal amount of the 2026 Notes.

This transaction did not qualify as an induced conversion under this new guidance.

Recent Accounting Pronouncements Not Yet Adopted

Income Tax Disclosures

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The Company is currently evaluating the effect of adopting these new disclosure requirements on its consolidated financial statements and related disclosures in 2026.

Disaggregation of Income Statement Expense

In November 2024, the FASB issued new disclosure requirements which require disaggregated information about certain income statement line items.

These new disclosure requirements are effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027.

These disclosure requirements may be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all periods presented in the financial statements.

The Company is currently evaluating the effect of adopting these new disclosure requirements on its consolidated financial statements and related disclosures in 2028 as well as interim disclosures beginning in the first quarter of 2029.

Fair Value Measurements

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Total assets at fair value

The Company’s assets and liabilities measured at fair value on a recurring basis at July 28, 2023 were as follows:

The Company’s assets and liabilities measured at fair value on a recurring basis at August 02, 2024 were as follows:

Cash equivalents*

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*Consists of money market fund investments.

**Represents plan assets invested in mutual funds established under a Rabbi Trust for the Company’s non-qualified savings plan and is included in the Consolidated Balance Sheets as other assets (see Note 11).

The Company did no t have any liabilities measured at fair value on a recurring basis at August 02, 2024 and July 28, 2023.

**Represents plan assets invested in mutual funds established under a Rabbi Trust for the Company’s Non-Qualified Savings Plan and is included in the Consolidated Balance Sheets as other assets.

See Note 11 for additional information regarding the Company’s Non-Qualified Savings Plan.

The Company did no t have any liabilities measured at fair value on a recurring basis at August 01, 2025 and August 02, 2024.

The Company’s money market fund investments are measured at fair value using quoted market prices.

The Company’s deferred compensation plan assets are measured based on net asset value per share as a practical expedient to estimate fair value.

The fair values of accounts receivable and accounts payable at August 02, 2024 and July 28, 2023, approximate their carrying amounts because of their short duration.

The fair value of the Company’s variable rate debt, based on quoted market prices, which are considered Level 1 inputs, approximates its carrying amounts at August 02, 2024 and July 28, 2023.

The Company’s financial instruments that are not remeasured at fair value include the 0.625 % convertible Senior Notes (see Note 4).

The Company estimates the fair value of the Notes through consideration of quoted market prices of similar instruments, classified as Level 2 as described above.

The estimated fair value of the Notes was $ 267,939 and $ 259,311 as of August 02, 2024 and July 28, 2023, respectively.

The fair values of accounts receivable and accounts payable at August 01, 2025 and August 02, 2024, approximate their carrying amounts because of their short duration.

The fair value of the Company’s variable rate debt, based on quoted market prices, which are considered Level 1 inputs, approximates its carrying amounts at August 01, 2025 and August 02, 2024.

The Company’s financial instruments that are not remeasured at fair value include the 2026 Notes and the 2030 Notes.

See Note 4 for additional information regarding the 2026 Notes and the 2030 Notes.

The Company estimates the fair value of the 2026 Notes and 2030 Notes through consideration of quoted market prices of similar instruments, classified as Level 2 as described above.

The estimated fair value of the 2026 Notes was $ 144,075 and $ 267,939 as of August 01, 2025 and August 02, 2024, respectively.

The estimated fair value of the 2030 Notes was $ 374,246 as of August 01, 2025.

Assets Measured at Fair Value on a Nonrecurring Basis

In 2024, six Cracker Barrel were determined to be impaired and thirteen MSBC locations were determined to be impaired because of declining operating performance.

In 2023, six Cracker Barrel locations were determined to be impaired because of declining operating performance.

In 2025, seven Cracker Barrel stores and twenty-five MSBC locations were determined to be impaired because of declining operating performance.

In 2024, six Cracker Barrel stores and thirteen MSBC locations were determined to be impaired because of declining operating performance.

Fair value of these locations was determined by sales prices of comparable assets or estimates of discounted future cash flows considering their highest and best use.

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The Company recorded an impairment of the entire goodwill amount of $ 4,690 in 2024;

this amount is recorded in the goodwill impairment line on the Consolidated Statement of Income.

this amount is recorded in the goodwill impairment line on the Consolidated Statements of Income.

Inventories were comprised of the following at:

August 01, 2025

July 28, 2023

On June 17, 2022, the Company entered into a five-year $ 700,000 revolving credit facility (the “2022 Revolving Credit Facility”).

The 2022 Revolving Credit Facility also contains an option to increase the revolving credit facility by $ 200,000 .

At August 02, 2024 and July 28, 2023, the Company had $ 180,000 and $ 120,000 , respectively, in outstanding borrowings under the 2022 Revolving Credit Facility.

At August 02, 2024, the Company had $ 32,644 of standby letters of credit, which reduce the Company’s borrowing availability under the 2022 Revolving Credit Facility (see Note 14).

August 02, 2024

On May 16, 2025, the Company entered into a five-year $ 800,000 revolving credit facility (the “2025 Credit Facility”).

The 2025 Credit Facility replaced the five-year $ 700,000 revolving credit facility (the “2022 Revolving 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.

The 2025 Credit Facility also provides for an uncommitted accordion feature that allows the Company to increase the revolving credit facility by up to $ 200,000 , plus any additional amount that would not cause the Company to exceed a consolidated total leverage ratio of 3.50 to 1.00 (subject to securing additional commitments from existing lenders or new lending institutions).

The 2025 Credit Facility also initially provided for a $ 250,000 delayed draw term loan facility (the “Delayed Draw Term Facility”), which was terminated on June 13, 2025 in connection with the Company’s issuance and sale of $ 345,000 aggregate principal amount of 1.75 % Senior Convertible Notes due in 2030 (the “2030 Notes”).

See further information regarding the 2030 Notes described below.

In accordance with the 2025 Revolving Credit Facility, outstanding borrowings bear interest, at the Company’s election, either at (1) the Term Secured Overnight Financing Rate (SOFR), plus an applicable margin based on the Company’s consolidated total leverage ratio (the “Applicable Margin”) or (2) a base rate equal to the greatest of (i) the prime rate, (ii) a rate that is 0.5 % in excess of the Federal Funds Rate, and (iii) one-month Term SOFR plus 1.0 %, in each case, plus an Applicable Margin.

At August 01, 2025, the Company had no borrowings under the 2025 Revolving Credit Facility.

At August 02, 2024, the Company had $ 180,000 in outstanding borrowings with a weighted average interest rate of 7.19 % under the 2022 Revolving Credit Facility.

At August 01, 2025, the Company had $ 34,004 of standby letters of credit, which reduce the Company’s borrowing availability under the 2025 Revolving Credit Facility.

See Note 14 regarding the standby letters of credit.

At August 01, 2025, the Company had $ 515,996 in borrowing availability under the 2025 Revolving Credit Facility.

In accordance with the 2022 Revolving Credit Facility, outstanding borrowings bear interest, at the Company’s election, either at (1) the Term Secured Overnight Financing Rate (SOFR) or (2) a base rate equal to the greatest of (i) the prime rate, (ii) a rate that is 0.5 % in excess of the Federal Funds Rate, and (iii) Term SOFR plus 1.0 %, in each case, plus an applicable margin based on the Company’s consolidated total leverage ratio.

At August 02, 2024, the weighted average interest rate on $ 180,000 of the Company’s outstanding borrowings was 7.19 %.

At July 28, 2023, the weighted average interest rate on $ 120,000 of the Company’s outstanding borrowings was 6.79 %.

The 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.

At August 02, 2024, the Company was in compliance with all debt covenants under the 2022 Revolving Credit Facility.

The 2025 Revolving Credit Facility contains customary financial covenants, which include maintenance of a maximum consolidated total leverage ratio and a minimum consolidated interest coverage ratio.

At August 01, 2025, the Company was in compliance with all financial covenants under the 2025 Revolving Credit Facility.

The 2025 Revolving Credit Facility also imposes restrictions on the amount of dividends the Company is permitted to pay and the amount of shares the Company is permitted to repurchase.

Under the 2022 Revolving Credit Facility, provided there is no default existing and the total of the Company’s availability under the 2022 Revolving Credit Facility plus the Company’s cash and cash equivalents on hand is at least $ 100,000 (the “Cash Availability”), the Company may declare and pay cash dividends on shares of its common stock and repurchase shares of its common stock (1) in an unlimited amount if, at the time such dividend or repurchase is made, the Company’s 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 the Company’s consolidated total leverage ratio is greater than 2.75 to 1.00 at the time the dividend or repurchase is made;

Under the 2025 Revolving Credit Facility, provided there is no default existing and the total of the Company’s availability under the 2025 Revolving Credit Facility plus the Company’s cash and cash equivalents on hand is at least $ 100,000 (the “Cash Availability”), the Company may declare and pay cash dividends on shares of its common stock and repurchase shares of its common stock (1) in an unlimited amount if, at the time such dividend or repurchase is made, the Company’s consolidated total leverage ratio is 3.50 to 1.00 or less and (2) in an aggregate amount not to exceed $ 100,000 in any fiscal year if, at the time such dividend or repurchase is made, the Company’s consolidated total leverage ratio is greater than 3.50 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 , the Company may declare and pay cash dividends on shares of its 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 .

Convertible Senior Notes

On June 18, 2021, the Company completed a $ 300,000 principal aggregate amount private offering of 0.625 % convertible Senior Notes due in 2026 (the “Notes”) which included the exercise in full of the initial purchasers’ option to purchase up to an additional $ 25,000 principal amount of the Notes.

On June 18, 2021, the Company completed a private offering of $ 300,000 aggregate principal amount of its 0.625 % convertible Senior Notes due in 2026 (the “2026 Notes”) which included the exercise in full of the initial purchasers’ option to purchase up to an additional $ 25,000 principal amount of the 2026 Notes.

The 2026 Notes are governed by the terms of an indenture between the Company and U.S.

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The 2026 Notes are unsecured obligations and do not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company or any of its subsidiaries.

In an event of default, the principal amount of, and all accrued and unpaid interest on, all of the notes then outstanding will immediately become due and payable.

Upon the occurrence of an event of default, the principal amount of, and all accrued and unpaid interest on, all of the notes then outstanding will immediately become due and payable.

However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture will consist exclusively of the right of the noteholders to receive special interest on the 2026 Notes for up to 180 calendar days during which such event of default has occurred and is continuing, at a specified rate for the first 90 days of 0.25 % per annum, and thereafter at a rate of 0.50 % per annum, on the principal amount of the 2026 Notes.

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The conversion rate is subject to customary adjustments upon the occurrence of certain events, including for the payment of dividends to holders of the Company’s common stock.

On August 02, 2024, the conversion rate, as adjusted, was 6.2713 shares of the Company’s common stock per $ 1,000 principal amount of Notes.

On August 01, 2025, the conversion rate, as adjusted, was 6.3962 shares of the Company’s common stock per $ 1,000 principal amount of the 2026 Notes.

In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

Net proceeds from the 2026 Notes offering were approximately $ 291,000 , after deducting the initial purchasers’ discounts and commissions and the Company’s offering fees and expenses.

The Notes are accounted for entirely as a liability and the issuance costs of the Notes are accounted for wholly as debt issuance costs in the Consolidated Balance Sheets as of August 02, 2024 and July 28, 2023.

During any calendar quarter preceding September 30, 2021, in which the closing price of the Company’s common stock exceeds 130 % of the applicable conversion price of the Notes on at least 20 of the last 30 consecutive trading days of the quarter, holders may in the immediate quarter following, convert all of a portion of their Notes.

The holders of the Notes were not eligible to convert their Notes during 2024, 2023 or 2022.

Contemporaneously with the 2030 Notes offering described below, the Company used approximately $ 145,900 of the net proceeds from the 2030 Notes for the repurchase of $ 150,000 aggregate principal amount of 2026 Notes in separate and privately negotiated transactions and recorded a gain on extinguishment of debt of $ 3,186 .

This amount is recorded in the gain on extinguishment of debt line on the Consolidated Statements of Income.

During any calendar quarter preceding September 30, 2021, in which the closing price of the Company’s common stock exceeds 130 % of the applicable conversion price of the 2026 Notes on at least 20 of the last 30 consecutive trading days of the quarter, holders may in the immediate quarter following, convert all or a portion of their 2026 Notes.

When a conversion notice is received, the Company has the option to pay or deliver the conversion amount entirely in cash or a combination of cash and shares of the Company’s common stock.

Accordingly, as of August 02, 2024 and July 28, 2023, the Company could not be required to settle the Notes in cash and, therefore, the Notes are classified as long-term debt.

The holders of the 2026 Notes were not eligible to convert their 2026 Notes during 2025, 2024, 2023 or 2022.

Accordingly, as August 02, 2024, the Company could not be required to settle the 2026 Notes in cash and, therefore, the 2026 Notes were classified as long-term debt.

As of August 01, 2025, the 2026 Notes are classified as a current liability due to their maturity date in 2026.

The following table includes the outstanding principal amount and carrying value of the 2026 Notes as of the periods indicated:

August 01, 2025

July 28, 2023

August 02, 2024

Liability component

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Total interest expense

On June 13, 2025, the Company completed a private offering of $ 345,000 aggregate principal amount of the 2030 Notes, which included the exercise in full of the initial purchasers’ option to purchase up to an additional $ 45,000 principal amount of the 2030 Notes.

The 2030 Notes are governed by the terms of an indenture between the Company and U.S.

Bank Trust Company, National Association as the Trustee.

The 2030 Notes will mature on September 15, 2030, unless earlier converted, repurchased or redeemed.

The 2030 Notes bear cash interest at an annual rate of 1.75 %, payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2026.

The 2030 Notes are unsecured obligations and do not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company or any of its subsidiaries.

Upon the occurrence of an event of default, the principal amount of, and all accrued and unpaid interest on, all of the 2030 Notes then outstanding will immediately become due and payable.

However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture will consist exclusively of the right of the noteholders to receive special interest on the 2030 Notes for up to 180 calendar days during which such event of default has occurred and is continuing, at a specified rate for the first 90 days of 0.25 % per annum, and thereafter at a rate of 0.50 % per annum, on the principal amount of the 2030 Notes.

The initial conversion rate applicable to the 2030 Notes was 13.8455 shares of the Company’s common stock per $ 1,000 principal amount of 2030 Notes, which represented an initial conversion price of approximately $ 72.23 per share of the Company’s common stock, a premium of approximately 32.5 % over the last reported sale price of $ 54.51 per share on June 10, 2025, the date on which the 2030 Notes were priced.

The conversion rate is subject to customary adjustments upon the occurrence of certain events.

On August 01, 2025, the conversion rate was 13.8455 shares of the Company’s common stock per $ 1,000 principal amount of the 2030 Notes.

Net proceeds from the 2030 Notes offering were approximately $ 335,000 , after deducting the initial purchasers’ discounts and commissions and the Company’s offering fees and expenses.

During any calendar quarter commencing after the calendar quarter ending on September 30, 2025 (and only during such calendar quarter), if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter, holders may in the immediate quarter following, convert all or a portion of their 2030 Notes.

When a conversion notice is received, the Company will settle any conversions by paying or delivering, as applicable, cash or, if applicable and at the Company’s election, a combination of cash (which shall not be less than $1,000 for each $1,000 principal amount of 2030 Notes being settled) and shares of the Company’s common stock, based on the applicable conversion rate(s) at the time of each such conversion.

The following table includes the outstanding principal amount and carrying value of the 2030 Notes as of the period indicated:

August 01, 2025

Liability component

Debt issuance costs

Net carrying amount

The effective rate of the 2030 Notes over their expected life is 2.33 %.

The following is a summary of interest expense for the 2030 Notes for 2025:

Coupon interest

Amortization of issuance costs

Total interest expense

Convertible Note Hedge and Warrant Transactions

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On August 01, 2025, the strike price, as adjusted, of the Warrant Transactions was adjusted to $ 218.88 per share as a result of dividends declared since the 2026 Notes were issued.

As these transactions meet certain accounting criteria, the Convertible Note Hedge Transactions and Warrant Transactions were recorded in stockholders’ equity, not accounted for as derivatives and are not remeasured each reporting period.

As these transactions meet certain accounting criteria, the Convertible Note Hedge Transactions and Warrant Transactions were recorded in shareholders’ equity within additional paid-in capital, not accounted for as derivatives and are not remeasured each reporting period.

In connection with the repurchase of the 2026 Notes, on June 16, 2025, the Company entered into partial unwind agreements with the Hedge Counterparties, to unwind a portion of the Convertible Note Hedge Transactions and Warrant Transactions underlying the repurchased 2026 Notes.

These transactions were recorded in shareholders’ equity within additional paid-in capital.

Capped Call Transactions

In connection with the offering of the 2030 Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain of the initial purchasers of the 2030 Notes and/or their respective affiliates and other financial institutions (the “Option Counterparties”).

The Capped Call Transactions cover, subject to customary anti-dilution adjustments, the number of shares of the Company’s common stock that initially underlie the 2030 Notes and are expected generally to reduce or offset the potential equity dilution upon any conversion of the 2030 Notes, and/or offset any cash payments that the Company may be required to make in excess of the principal amount of converted 2030 Notes with such reduction and/or offset subject to a cap, based on the cap price of the Capped Call Transactions.

The cap price of the Capped Call Transactions is initially approximately $ 87.22 and is subject to certain adjustments under the terms of the Capped Call Transactions.

The Capped Call Transactions were accounted for as equity instruments and recorded in shareholders’ equity within additional paid-in capital.

These transactions are not subject to remeasurement.

Share Repurchases

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On June 2, 2023, the Company’s Board of Directors renewed this authorization for an additional year which expired on June 2, 2024.

In 2024, the Company did not repurchase any shares of its common stock.

In 2023, the Company repurchased 171,792 shares of its common stock in the open market at an aggregate cost of $ 17,449 .

In 2025 and 2024, the Company did no t repurchase any shares of its common stock.

In 2023, the Company repurchased 171,792 shares of its common stock in the open market at an aggregate cost of $ 17,449 .

In the first quarter of 2026, the Board of Directors authorized the Company to repurchase shares of the Company’s outstanding stock at management’s discretion up to a total value of $ 100,000 .

Segment Information

Cracker Barrel stores represent a single, integrated operation with two related and substantially integrated product lines.

The operating expenses of the restaurant and retail product lines of a Cracker Barrel store are shared and are indistinguishable in many respects.

Accordingly, the Company manages its business on the basis of one reportable operating segment.

The Company represents a single, integrated operation with two related and substantially integrated product lines.

The operating expenses of the restaurant and retail product lines of a store are shared and are indistinguishable in many respects.

As such, the Company has determined it operates as one operating segment and one reportable segment.

All of the Company’s operations are located within the United States.

The Company’s chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer.

The CODM uses consolidated net income to evaluate performance and as a basis for allocating resources.

The CODM uses consolidated net income primarily in the forecasting process and periodic reviews of actual performance as compared to forecasts.

The CODM reviews balance sheet and capital expenditure information at a consolidated level and, as such, the measure of total assets is reflected at the consolidated balance sheet level.

The following table presents information on the Company’s reportable segment and consolidated net income:

Total revenue

Restaurant cost of goods sold (exclusive of depreciation and rent)

Retail cost of goods sold (exclusive of depreciation and rent)

Labor and other related expenses

Other store operating expenses (a)

Advertising expense

Store-level supplies expense

Store-level maintenance expense

Store-level utilities expense

General and administrative expenses

Other segment items (b)

Gain on extinguishment of debt

Interest expense, net

Income before income taxes

Provision for income taxes (income tax benefit)

Segment profit and consolidated net income

(a) Excludes advertising, store-level supplies, store-level maintenance and store-level utilities expenses which are disclosed separately.

(b) Consists of impairment costs including goodwill impairment and store closing costs.

Revenue Recognition

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Revenue recognized in the Consolidated Statements of Income for 2025, 2024 and 2023, respectively, for the redemption of gift cards which were included in the deferred revenue balance at the beginning of the fiscal year was $ 34,935 , $ 36,958 , and $ 40,103 , respectively.

Deferred revenue related to the Company’s gift cards was $ 84,854 and $ 88,556 , respectively, at August 02, 2024 and July 28, 2023.

Deferred revenue related to the Company’s gift cards was $ 82,452 and $ 84,854 , respectively, at August 01, 2025 and August 02, 2024, and is included in the deferred revenue on the Consolidated Balance Sheets.

Loyalty Program

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Revenue is recognized for these performance obligations upon redemption of pegs or rewards earned by the customer.

As of August 2, 2024, deferred revenue related to the loyalty program was $ 1,544 and is included in deferred revenue on the Consolidated Balance Sheet.

The Company has entered into two Cracker Barrel and three MSBC agreements for real estate leases that are not recorded as right-of-use assets or lease liabilities as it has not yet taken possession.

These leases are expected to commence in 2025 and 2026 with undiscounted future payments of $ 11,292 and $ 1,323 , respectively.

As of August 01, 2025 and August 02, 2024, deferred revenue related to the loyalty program was $ 5,419 and $ 1,544 , respectively, and is included in deferred revenue on the Consolidated Balance Sheets.

As of August 01, 2025, the Company had no t entered into any agreements for real estate leases that are not recorded as right-of-use assets or lease liabilities on the Consolidated Balance Sheet.

The following table summarizes the components of lease cost for operating leases for each of the three years:

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*Included in the Impairment line on the Consolidated Statement of Cash Flows

The following table summarizes the weighted-average remaining lease term and the weighted-average discount rate for operating leases as of August 02, 2024, July 28, 2023 and July 29, 2022:

The following table summarizes the weighted-average remaining lease term and the weighted-average discount rate for operating leases as of August 01, 2025, August 02, 2024 and July 28, 2023:

Weighted-average remaining lease term

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At August 01, 2025, the number of outstanding awards under the 2020 Omnibus Plan and the Prior Plan was 544,988 and 1,259 , respectively.

In 2025, the Company issued stock options to certain executives.

These stock options have a contractual term of ten years and will vest in three equal installments on each anniversary of the grant date, subject to continued employment.

A summary of the Company’s stock option activity as of August 01, 2025, and changes during 2025 is presented in the following table:

Weighted-Average

Stock Options

Outstanding at August 02, 2024

Outstanding at August 01, 2025

The weighted-average grant-date fair value of the stock options granted during 2025 was $ 17.83 .

The weighted-average remaining contractual term of the stock options outstanding as of August 01, 2025, was 9.2 years, and the aggregate intrinsic value of the outstanding stock options was $ 1,558 .

The intrinsic value for stock options is defined as the difference between the current market value and the grant price.

As of August 01, 2025, none of the stock options were exercisable and none were exercised during 2025.

The fair value of each option award was estimated on the date of grant using the Black-Scholes-Merton option pricing model, which incorporates the assumptions for inputs shown in the following table.

The assumptions used are as follows:

● The Company has not granted option awards in several years and does not have adequate historical exercise/cancellation behavior on which to base the expected life assumption.

As such, the Company used the simplified method in SEC Staff Accounting Bulletin No.

107 and Staff Accounting Bulletin No.

110 to determine the expected life.

Under this method, the expected term equals the vesting term plus original contractual term divided by two.

● The expected volatility was measured using the Company’s daily stock price volatility over the last six years , which is commensurate with the expected term.

● The risk-free interest rate is based on the U.S.

Treasury yield curve in effect at the time of grant for periods within the contractual life of the option.

● The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the option.

Expected term (in years)

Expected volatility

Risk-free interest rate

Dividend yield

The Company’s nonvested stock awards consist of the Company’s common stock, generally accrue dividend equivalents and vest over one to three years .

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Dividends are forfeited for any nonvested stock awards that do not vest.

The Company’s nonvested stock awards include its long-term performance plans which were established by the Committee for the purpose of rewarding certain officers with shares of the Company’s common stock if the Company achieved certain performance targets.

The stock awards under the long-term performance plans are calculated or estimated based on achievement of financial performance measures.

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Date Fair Value

Unvested at July 28, 2023

Unvested at August 02, 2024

Unvested at August 01, 2025

The following table summarizes the total fair value of nonvested stock that vested for each of the three years:

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Shareholder Rights Agreement

On February 22, 2024, the Company’s Board of Directors unanimously determined to extend the Company’s shareholder rights agreement for a further three-year term, subject to the approval of the Company’s shareholders at the Company’s upcoming 2024 annual meeting.

On February 22, 2024, the Company’s Board of Directors unanimously determined to extend the Company’s shareholder rights agreement for a further three-year term, which was approved at the Company’s 2024 annual shareholder meeting.

In connection with this determination, the Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $ 0.01 per share, and adopted a shareholder rights agreement, as set forth in the Rights Agreement dated as of February 27, 2024 (the “Rights Agreement”), by and between the Company and Equiniti Trust Company, LLC, as rights agent.

The dividend was payable on March 8, 2024 to the shareholders of record on March 8, 2024 .

The Rights Agreement replaced the Company’s Rights Agreement, dated as of April 9, 2021 (the “2021 Rights Agreement”), and became effective 5:00 p.m., New York City time, on February 27, 2024 (the “Effective Time”).

To facilitate the entry into the Rights Agreement, the Board of Directors also approved an Amendment and Termination to the 2021 Rights Agreement, which accelerated the expiration date of the 2021 Rights Agreement from the close of business on April 9, 2024 to immediately prior to the Effective Time, at which the 2021 Rights Agreement expired and became of no further force or effect.

Other than extending the term, the Rights Agreement makes no changes to the material terms and conditions of the 2021 Rights Agreement.

The Rights initially trade with, and are inseparable from, the Company’s common stock.

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After a person or group becomes an Acquiring Person, the Board of Directors may not amend the agreement in a way that adversely affects holders of the Rights .

If the Rights Agreement is approved by the shareholders at the 2024 annual meeting, the Rights will expire on February 27, 2027.

If shareholders do not approve the Rights Agreement, it will expire immediately following certification of the vote at the 2024 annual meeting.

The Rights will expire on February 27, 2027.

Employee Savings Plans

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Total provision for income taxes (income tax benefit)

The decrease in the Company’s provision for income taxes in 2024 as compared to 2023 is primarily due to the decrease in income before income taxes and favorable audit settlements in 2024.

The decrease in the Company’s provision for income taxes in 2023 as compared to 2022 is primarily due to the decrease in income before income taxes.

The Company’s income tax benefit decreased in 2025 primarily due to the increase in income before income taxes and fewer favorable audit settlements as compared to 2024.

The decrease in the Company’s provision for income taxes (income tax benefit) in 2024 as compared to 2023 is primarily due to the decrease in income before income taxes and favorable audit settlements in 2024.

H.R.1., also known as the One Big Beautiful Bill Act (OBBBA), was enacted on July 4, 2025.

The OBBBA includes significant tax law changes with effective dates in 2025 and continuing through 2027.

The provisions effective during 2025 did not have a material impact on the Company’s 2025 financial statements.

Significant components of the Company’s net deferred tax liability consisted of the following at:

August 01, 2025

July 28, 2023

August 02, 2024

Deferred tax assets:

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these amounts are included in other long-term liabilities in the Consolidated Balance Sheets.

As of August 02, 2024 and July 28, 2023, the Company’s gross liability for uncertain tax positions, exclusive of interest and penalties, was $ 7,404 and $ 9,675 , respectively.

As of August 01, 2025 and August 02, 2024, the Company’s gross liability for uncertain tax positions, exclusive of interest and penalties, was $ 6,703 and $ 7,404 , respectively.

Summarized below is a tabular reconciliation of the beginning and ending balance of the Company’s total gross liability for uncertain tax positions exclusive of interest and penalties:

August 01, 2025

July 28, 2023

August 02, 2024

July 28, 2023

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Uncertain tax positions

The Company had $ 7,913 , $ 7,896 , and $ 7,133 in interest and penalties accrued as of August 02, 2024, July 28, 2023, and July 29, 2022, respectively.

The Company recognized accrued interest and penalties related to unrecognized tax benefits of $ 17 , $ 764 and $( 622 ) in its provision for income taxes (income tax benefit) on August 02, 2024, July 28, 2023 and July 29, 2022, respectively.

The Company had $ 8,672 , $ 7,913 , and $ 7,896 in interest and penalties accrued as of August 01, 2025, August 02, 2024, and July 28, 2023, respectively.

The Company recognized accrued interest and penalties related to unrecognized tax benefits of $ 760 , $ 17 and $ 764 in its provision for income taxes (income tax benefit) on August 01, 2025, August 02, 2024 and July 28, 2023, respectively.

In many cases, the Company’s uncertain tax positions are related to tax years that remain subject to examination by the relevant taxing authorities.

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Add potential dilution:

Nonvested stock awards and units

Nonvested stock awards and units and stock options

Diluted weighted average shares

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As of August 01, 2025, the Company had $ 34,004 of standby letters of credit related to securing reserved claims under workers’ compensation insurance and certain sale and leaseback transactions.

All standby letters of credit are renewable annually and reduce the Company’s borrowing availability under its Revolving Credit facility (see Note 4).

All standby letters of credit are renewable annually and reduce the Company’s borrowing availability under its 2025 Revolving Credit facility.

See Note 4 for additional information regarding the 2025 Revolving Credit Facility.

The Company enters into certain indemnification agreements in favor of third parties in the ordinary course of business.

The Company believes that the probability of incurring an actual liability under other indemnification agreements is sufficiently remote so that no liability has been recorded in the Consolidated Balance Sheet.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data