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Cracker Barrel (CBRL) Q3 Earnings & Revenues Top Estimates

Zacks Equity Research

Cracker Barrel Old Country Store, Inc. CBRL reported better-than-expected results for the third quarter of fiscal 2019. Earnings surpassed the Zacks Consensus Estimate for the third straight quarter.

Adjusted earnings came in at $2.09 per share, which outpaced the Zacks Consensus Estimate of $2.04. The bottom line also increased 3% year over year on high expenses.

Revenues of $739.6 million surpassed the consensus mark of $734 million and also improved 3% from the prior-year quarter. The upside can be attributed to higher comparable restaurant sales.

Comps Details

Comparable store restaurant sales increased 1.3% in the reported quarter backed by a 3.1% uptick in average check and a 1.8% increase in comparable store restaurant traffic. Also, the average menu price rose about 1.8%. However, comps compared unfavorably with the fiscal second quarter’s 3.8% rise.

Comparable store retail sales in the fiscal third quarter decreased 2.6% compared with a 1.4% decline in the second quarter.

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. price-consensus-eps-surprise-chart | Cracker Barrel Old Country Store, Inc. Quote

Operating Highlights

Operating income in the fiscal third quarter totaled $65.1 million, up 2.8% year over year. Operating margin was 8.8%, flat from the prior year quarter.

As a percentage of total revenues, rise in labor as well as related expenses, other operating expenses, and general and administrative expenses were overshadowed by decline in cost of goods sold.

Balance Sheet

As of May 3, 2019, cash and cash equivalents were $167.6 million, up from $174.3 million as of Apr 27, 2018. Long-term debt remained at $400 million in the reported quarter, in line with the prior-year quarter.

Inventory at the end of the quarter under review amounted to $152.6 million, down from third-quarter fiscal 2018 value of $157 million.

Net cash provided by operating activities was $252.6 million as of May 3, 2019, compared with $221 million as of Apr 27, 2018.

Fiscal 2019 Guidance

Cracker Barrel continues to expect total revenues of nearly $3.05 billion. Comparable store restaurant sales and retail sales are expected to grow 2%, up from the previously guided range of 1-2%. The company also aims to open eight stores in fiscal 2019.

Management continues to project earnings per diluted share of $8.95-$9.10 for fiscal 2019 compared with $8.87 in fiscal 2018.

Zacks Rank & Stocks to Consider

Cracker Barrel currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks that warrant a look in the same space include Denny's Corporation DENN, Dave & Buster's Entertainment, Inc. PLAY and Yum China Holdings, Inc. YUMC. Denny's sports a Zacks Rank #1 (Strong Buy), whereas Dave & Buster's and Yum China Holdings carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Denny's earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters, the average beat being 8%.

Dave & Buster's Entertainment and Yum China’s long-term earnings are likely to witness 14.8% and 9.8% growth, respectively.

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Dave & Buster's Entertainment, Inc. (PLAY) : Free Stock Analysis Report
 
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