CRACKER BARREL OLD COUNTRY STORE, INC Fair Value Disclosure
2. | Fair Value Measurements |
Fair value for certain of the Company’s assets and liabilities is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, a three-level hierarchy for inputs is used. These levels are:
| ● | Quoted Prices in Active Markets for Identical Assets (“Level 1”) – quoted prices (unadjusted) for an identical asset or liability in an active market. |
| ● | Significant Other Observable Inputs (“Level 2”) – quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability. |
| ● | Significant Unobservable Inputs (“Level 3”) – unobservable and significant to the fair value measurement of the asset or liability. |
The Company’s assets and liabilities measured at fair value on a recurring basis at August 01, 2025 were as follows:
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| Total Fair | ||||||||
Level 1 | Level 2 | Level 3 | Value | |||||||||
Cash equivalents* | $ | 27,501 | $ | — | $ | — | $ | 27,501 | ||||
Total | $ | 27,501 | $ | — | $ | — | $ | 27,501 | ||||
Deferred compensation plan assets** |
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| 22,700 | ||||||
Total assets at fair value |
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| $ | 50,201 | ||||||
The Company’s assets and liabilities measured at fair value on a recurring basis at August 02, 2024 were as follows:
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| Total Fair | ||||||||
Level 1 | Level 2 | Level 3 | Value | |||||||||
Cash equivalents* | $ | 1 | $ | — | $ | — | $ | 1 | ||||
Total | $ | 1 | $ | — | $ | — | $ | 1 | ||||
Deferred compensation plan assets** |
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| 25,719 | ||||||
Total assets at fair value |
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| $ | 25,720 | ||||||
*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 for additional information regarding the Company’s Non-Qualified Savings Plan.
The Company did not 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 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 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. Assumptions used in the cash flow model included projected annual revenue growth rates and projected cash flows, which can be affected by economic conditions and management’s expectations. Additionally, changes in the local and national economies and markets for real estate and other assets can impact the sales prices of the assets. The Company has determined that the majority of the inputs used to value its long-lived assets held and used are unobservable inputs, and thus, are considered Level 3 inputs. Based on its analysis, the Company recorded impairment charges of $19,772 and $17,448, respectively, in 2025 and 2024, which is included in the impairment and store closing costs line on the Consolidated Statements of Income.
In 2024, based on the Company’s analysis of MSBC’s goodwill, the Company concluded that the goodwill was impaired based on changes in the macroeconomic environment, including interest rate and inflationary pressures, and declining financial trends, which resulted in a calculated fair value lower than the goodwill’s carrying value. As part of its analysis, the Company used the discounted cash flow method to estimate fair value. Significant inputs for this method include projected cash flows, growth rate and discount rate. 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 Statements of Income.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Sep 26, 2025 | Showing above |
| 2023 | Sep 26, 2023 | |
| 2022 | Sep 27, 2022 | |
| 2020 | Sep 25, 2020 | |
| 2019 | Sep 27, 2019 | |
| 2017 | Sep 22, 2017 | |
| 2016 | Sep 26, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.