Cracker Barrel (CBRL) to Report Q2 Earnings: What to Expect?
Cracker Barrel Old Country Store, Inc. CBRL is slated to report its second-quarter fiscal 2024 results on Feb 27 before the opening bell.
In the last reported quarter, the company’s earnings and revenues missed the Zacks Consensus Estimate by 34.6% and 0.3%, respectively. Also, the top and the bottom lines declined on a year-over-year basis by 1.9% and 48.5%, respectively.
CBRL’s earnings surpassed expectations in two out of the trailing four quarters and missed on the other two occasions, the average negative surprise being 6.5%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the fiscal second-quarter earnings per share is pegged at $1.29, indicating a deterioration of 12.8% from $1.48 reported in the year-ago quarter.
Cracker Barrel Old Country Store, Inc. Price and EPS Surprise
Cracker Barrel Old Country Store, Inc. price-eps-surprise | Cracker Barrel Old Country Store, Inc. Quote
For revenues, the consensus mark is pegged at $915.8 million, suggesting a decline of 1.9% from the year-ago quarter’s reported figure.
Factors at Play
Revenues
Cracker Barrel's fiscal second-quarter performance is likely to have benefited from an increase in average check and menu prices. Increased focus on improving the effectiveness of its marketing initiatives and overall guest experience has been encouraging. Moreover, higher volumes courtesy of seasonal demand patterns (Thanksgiving week) are likely to have benefited the company’s performance in the to-be-reported quarter.
However, subdued consumer sentiments and reduced restaurant traffic, influenced by adverse macroeconomic factors such as inflationary pressures and interest rate fluctuations, are likely to have negatively affected the company’s comparable store sales (restaurant and retail).
For the quarter, our model predicts comparable store restaurant sales to increase 0.3% compared with the 8.4% increase in the prior year. Also, comparable store retail sales are expected to decline 6.9% against 4.1% growth in the year-ago quarter.
We anticipate restaurant and retail sales (including MSBC) for the to-be-reported quarter to a year-over-year decline of 2.3% to $701.2 million and 0.1% to $215.6 million, respectively.
Margins
The company’s bottom line is likely to have been impacted by increasing costs and expenses. CBRL’s consistent focus on advertising and marketing has been one of the primary contributors to increased expenses, along with maintenance expenses and commodity inflation. Furthermore, increasing labor costs have been concerning as well, as the company expects it to have been on the higher end due to wage inflation.
Our model predicts the fiscal second-quarter adjusted operating margin to be 3.9%, down 60 basis points year over year. Also, we expect labor and other related expenses to rise 4.8% year over year to $329.1 million.
What Our Model Says
Our proven model conclusively predicts an earnings beat for Cracker Barrel this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increased the odds of an earnings beat.
Earnings ESP: Cracker Barrel has an Earnings ESP of +7.75%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: CBRL currently carries a Zacks Rank of 3.
Other Stocks Poised to Beat Earnings
Here are some other companies in the Zacks Retail-Wholesale sector, which according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.
The Gap, Inc. GPS currently has an Earnings ESP of +24.44% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
GPS’ earnings for the to-be-reported quarter are expected to surge 125.3%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 137.9%.
Dave & Buster's Entertainment, Inc. PLAY currently has an Earnings ESP of +3.51% and has a Zacks Rank of 2.
PLAY’s earnings topped the consensus mark in three of the last four quarters and remained flat on the remaining occasion, with the average surprise being 34.5%. Earnings for the to-be-reported quarter are expected to gain 42.5% year over year.
Costco Wholesale Corporation COST currently has an Earnings ESP of +1.58% and a Zacks Rank of 2.
COST’s earnings for the to-be-reported quarter are expected to increase 9.1%. The company reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 2.6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Cracker Barrel Old Country Store, Inc. (CBRL) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
The Gap, Inc. (GPS) : Free Stock Analysis Report
Dave & Buster's Entertainment, Inc. (PLAY) : Free Stock Analysis Report
