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Cracker Barrel (CBRL) Stock Rises 13% in a Month: Here's Why

Shares of Cracker Barrel Old Country Store, Inc. CBRL have declined 12.6% in the past six months compared with the industry’s decrease of 2.1%. However, the stock has displayed some resilience, increasing 13.3% in the past month. The company’s sales-building efforts, expansion and menu innovation are likely to drive performance.

This Zacks Rank #2 (Buy) company has an impressive long-term earnings growth rate of 6.9%. In 2022, the company’s sales and earnings are expected to witness growth of 16.3% and 15.4%, respectively, year over year. Let’s delve deeper and find out the factors driving growth.

Growth Drivers

In a bid to address the challenges of the competitive restaurant industry, Cracker Barrel undertakes extensive marketing efforts, mainly focusing on the brand’s differentiation, menu offering and value. To drive traffic, Cracker Barrel relies heavily on seasonal promotions and limited-time offers to boost its top-line performance as they are appealing to both regular users and less-frequent guests.

Cracker Barrel’s continuous expansion strategies are also helping the company to drive growth. Going forward, the company expects to open 11 new Maple Street biscuit company locations and two new Cracker Barrel locations in fiscal 2022.

The company is benefiting from robust off-premise sales. During the fiscal third quarter, comparable store off-premise sales remained elevated from the 2019 levels. Also, it contributed to 19% of the quarterly restaurant sales. The company is stated to have benefited from its catering business and third-party delivery. The company expects to retain at least 60% of the growth through emphasis on order-fulfillment improvements and to expand guest engagement (through its digital platform). To support this, the company continues to focus on enhancing its curbside pickup process, improving the integration between off-premise applications and processes (with back-of-house technology) as well as streamlining processes.

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Zacks Investment Research


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For fiscal 2022, the company plans to drive off-premise sales through awareness building, advertising and partnerships with third-party delivery companies. Further, it expects to attract new customers and drive sustained growth in its off-premise business through its virtual brand, Chicken, and Biscuits.

Cracker Barrel is continuously focusing on rejuvenating its menu, which serves as the backbone of the company’s riveting growth potential. the company has announced that it has shifted its focus toward the breakfast menu. To this end, the company initiated a two-phase rollout process that involves streamlining breakfast offerings, guest customization and a better value proposition.

It also rolled out premium meat and side upgrades such as Spicy Chicken Sausage, Fried Sunday Homestyle Chicken, Steak, Ham, Grilled Chicken Tenders, fresh seasonal fruit, Hashbrown Casserole Tots, Buttermilk Pancakes and Loaded Hashbrown Casserole to boost its breakfast offerings. With an emphasis on personalized experience and diversified breakfast choices, the initiatives are likely to drive growth in the upcoming periods.

Coming to the beer and wine tableside beverage program, the company is stated to have made progress in third-quarter fiscal 2022, thereby inching toward its dine-in mix target of 2%. The company benefitted from enhanced selling, in-store marketing and new seasonal offerings. During the fiscal fourth quarter, the company initiated the rollout of Watermelon Lemonade (non-alcoholic) along with Jack Daniel's Country and Lynchburg Lemonade cocktails as a limited-time offering. Going forward, the company emphasized developing and testing other drink concepts to drive growth in this platform.

Other Key Picks

Some other-top ranked stocks in the Zacks Retail-Wholesale sector are Potbelly Corporation PBPB, Arcos Dorados Holdings Inc. ARCO and Ruth's Hospitality Group, Inc. RUTH.

Potbelly has a Zacks Rank #2, at present. PBPB has a trailing four-quarter earnings surprise of 26.2%, on average. Shares of PBPB have declined 17.6% in the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 17.5% and 100%, respectively, from the corresponding year-ago period’s levels.

Arcos Dorados carries a Zacks Rank #2. ARCO has a long-term earnings growth of 34.4%. Shares of the company have increased 41.6% in the past year.

The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 27.1% and 104.2%, respectively, from the year-ago period’s levels.

Ruth's Hospitality carries a Zacks Rank #2. RUTH shares have increased 1% in the past three months.

The Zacks Consensus Estimate for Ruth's Hospitality’s 2022 sales and EPS suggests growth of 18.1% and 24.8%, respectively, from the corresponding year-ago period’s levels.


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