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Cracker Barrel (CBRL) Q1 Earnings, Revenues Beat Estimates

Cracker Barrel Old Country Store, Inc. CBRL reported better-than-expected results for the first-quarter of fiscal 2019.

Adjusted earnings of $1.96 per share surpassed the Zacks Consensus Estimate of $1.91 by 2.6%. Earnings increased 2.1% year over year on marketing efforts and increased revenues.

Revenues of $733.5 million surpassed the consensus mark of $717 million by 2.3%. Moreover, revenues increased 3.3% from the prior-year quarter, driven by higher comparable store retail and restaurant sales.

Following the better-than-expected results, shares of Cracker Barrel jumped 4.7% on Nov 27. The company’s shares have rallied 17.1% in a year, outperforming the industry’s collective growth of 9.4%.

Comps Details

Comparable store restaurant sales increased 1.4% in the reported quarter buoyed bya 3% uptickin average check, partially offset bya 1.6% fall in comparable store restaurant traffic. The average menu price rose about 2% in the reported quarter. In fact, comps compared favorably with the fiscal fourth quarter’s 0.5% decline.

Comparable store retail sales in the first quarter increased 4.3%, better than the1.3% improvement recorded in the fourth quarter.

Operating Highlights

Operating income in the first quarter was $61.7 million, showing a decline from the year-ago quarter’s $70.8 million. Operating margin in the reported quarter was 8.4%, down 160 basis points (bps) from 10% a year ago.

As a percentage of total revenues, the cost of goods and labor expenses increased 60 bps and 30 bps, respectively. Moreover, the company witnessed a rise in other operating, and general and administrative expenses.

Balance Sheet

As of Nov 2, 2018, cash and cash equivalents were $101.6 million, down from $120.2million as of Oct 27, 2017 (end of first-quarter fiscal 2017). Long-term debt remained at $400 million in the quarter, flat with the prior-year quarter.

Inventory at the end of the quarter amounted to $181.6 million, down from first-quarter fiscal 2017 value of $191.5 million.

Cash flow from operating activities was $59.6 million as of Nov 2, 2018, compared with $38.3 million as of Oct 27, 2017.

In the fiscal first quarter, Cracker Barrel announced a quarterly dividend of $1.25 per share on the company's common stock. The dividend is payable on Feb 5, 2019, to shareholders of record as of Jan 18, 2019.

Cracker Barrel Old Country Store, Inc. Price, Consensus and EPS Surprise

Cracker Barrel Old Country Store, Inc. Price, Consensus and EPS Surprise | Cracker Barrel Old Country Store, Inc. Quote

Fiscal 2019 Guidance

The company expects total revenues of $3.04 billion. Comparable store restaurant sales and retail sales are expectedto remain flat or rise up to 1%. The company also aims to open eight stores in fiscal 2019.

Management projects earnings per diluted share for fiscal 2019 of $8.95-$9.10 compared with earnings per shareof $8.87 in fiscal 2018.

Zacks Rank & Other Stocks to Consider

Cracker Barrel carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the Retail-Restaurant industry are Papa Murphy's Holdings, Inc. FRSH, The Habit Restaurants, Inc. HABT and BJ's Restaurants, Inc. BJRI. While Papa Murphy's and Habit Restaurants sport a Zacks Rank #1 (Strong Buy), BJ's Restaurants carries a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.

Papa Murphy's has an expected earnings growth rate of 160% for the current year.

Habit Restaurants reported better-than-expected earnings in two of the trailing three quarters, the average being 66.7%.

BJ's Restaurants has an expected earnings growth rate of 66.7% for the current year.

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