Cracker Barrel (CBRL) Up 8.5% in the Past 3 Months: Here's Why

Zacks Equity Research
·3-min read

Cracker Barrel Old Country Store, Inc. CBRL is benefiting from expansion efforts, robust off-premise sales, sales-building efforts and menu innovations. Consequently, the company’s shares have gained 8.5% in the past three months compared with the industry’s increase of 0.9%. Let’s delve deeper.

Factors Driving Growth

Cracker Barrel’s continuous expansion strategies are also helping the company to drive growth. As of Sep 14, 2022, the company operated 53 MSBC locations across nine states. Although progress is likely to get hampered due to the pandemic, the company is bullish on its business model and growth potential. The company expects to open 15-20 new Maple Street biscuit company locations and three to four new Cracker Barrel locations in fiscal 2023.

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, the company 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.

Meanwhile, this Zacks Rank #2 (Buy) company continues to focus on off-premise initiatives, such as curbside delivery, third-party delivery and family meal baskets. It also continues to invest in technology initiatives to enhance its digital store and revamp its app to streamline the ordering process, provide a personalized experience and reduce friction on mobile devices. To this end, it initiated the rollout of Mobile Pay in April 2022.

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It also mentioned the addition of Apple Pay and Google Pay in the pipeline. It also emphasized the launch of a loyalty program to enhance customer engagement (concerning restaurant and retail offerings), as well as to drive frequency and growth. Notably, investments in this direction are likely to boost its hospitality service and the customer experience in a brand-new way.

Meanwhile, 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 initiated the new Build Your Own Homestyle Breakfast format, which allows guests to customize their meals. To this end, it initiated the additions of Impossible Sausage (as a plant-based meat option) and Stuffed Cheesecake Pancake to its menu.

Other Key Picks

Some other top-ranked stocks in the Zacks Retail – Restaurants industry are Wingstop Inc. WING, Dine Brands Global, Inc. DIN and Chipotle Mexican Grill, Inc. CMG.

Wingstop sports a Zacks Rank #1 (Strong Buy). WING has a long-term earnings growth rate of 11%. Shares of WING have increased 0.6% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.1% and 16.4%, respectively, from the comparable year-ago period’s levels.

Dine Brands currently carries a Zacks Rank #2. DIN has a trailing four-quarter earnings surprise of 10.6% on average. The stock has declined 14.7% in the past year.

The Zacks Consensus Estimate for Dine Brands’ 2022 sales suggests growth of 2.1% from the corresponding year-ago period’s levels.

Chipotle currently carries a Zacks Rank #2. CMG has a trailing four-quarter earnings surprise of 4.1% on average. The stock has declined 15.6% in the past year.

The Zacks Consensus Estimate for Chipotle’s 2022 sales and EPS suggests growth of 15.7% and 29.8%, respectively, from the corresponding year-ago period’s levels.


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