Cracker Barrel (CBRL) Q3 Earnings Beat Estimates, Stock Up
Cracker Barrel Old Country Store, Inc. CBRL posted mixed third-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line declined from the prior-year quarter’s figure.
While traffic was lower than expected, the company aggressively managed day-to-day operations, showing resilience in the face of financial impacts from reduced traffic. During the quarter, the company reported significant improvements in several key operational metrics.
This includes improvements in hourly turnover (10 percentage points year over year), seat-to-eat times (approximately 8%) and off-premise missing item scores (18%). The average skill level for key positions such as cook and server increased 3% year over year. The metrics closely linked to same-store sales growth suggest positive progress and are anticipated to drive increased visits over time.
Following the results, Cracker Barrel's shares rose 6% during trading hours on May 30.
Earnings & Revenues
In third-quarter fiscal 2024, the company reported adjusted earnings per share (EPS) of 88 cents, beating the Zacks Consensus Estimate of 56 cents. In the prior-year quarter, it reported adjusted EPS of $1.11.
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
Quarterly revenues of $817.1 million missed the consensus mark of $827 million. The top line dropped 1.9% year over year. Weaker-than-anticipated traffic primarily caused the downside.
Comps Details
Comparable store restaurant sales inched down 1.5% in the reported quarter compared with the same period in the fiscal 2023. Comparable store retail sales declined 3.8% year over year. During the quarter, menu pricing increases came in at 4% year over year.
Operating Highlights
During the fiscal third quarter, the cost of goods sold (excluding depreciation and rent) came in at $245.1 million, down 6.5% year over year. As a percentage of total revenues, the cost of goods sold (excluding depreciation and rent) fell 150 basis points (bps) year over year to 30%. Per our model, the metric was anticipated at 32.2%.
General and administrative expenses totaled $54.5 million, down from $45 million reported in the prior-year quarter. Our projection for the metric was $42.9 million.
Adjusted net income in the fiscal third quarter came in at $19.6 million compared with $24.6 million reported in the year-ago quarter. Our projection for the metric was $14.5 million.
Balance Sheet
As of Apr 26, 2024, cash and cash equivalents were $11.9 million compared with $22.5 million as of Apr 28, 2023.
Inventory at the fiscal third-quarter end reached $175.3 million compared with $184.8 million reported in the prior-year period.
Long-term debt as of Apr 26, 2024, was $472.2 million compared with $444.5 million as of Apr 28, 2023.
CBRL declared a cash dividend of 25 cents per share. The dividend will be paid out on Aug 6, 2024, to shareholders on record as of Jul 19, 2024.
2024 Guidance
For fiscal 2024, the company expects revenues in the range of $3.47-$3.51 compared with the previous expectation of $3.5-$3.6 billion. Adjusted EBITDA is anticipated to be between $200 million and $220 million.
Management projects commodity inflation to remain flat year over year. Hourly wage inflation is suggested to be nearly 5%.
Coming to store openings, CBRL aims to open eight to 10 new Maple Street Biscuit company units during the fiscal year. Capital expenditures during the year are envisioned in the range of $120-$125 million.
Zacks Rank & Key Picks
Cracker Barrel currently has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Zacks Retail-Wholesale sector include:
Wingstop Inc. WING sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter negative earnings surprise of 21.4%, on average. The stock has surged 93.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WING’s 2024 sales and earnings per share (EPS) suggests a rise of 27.5% and 36.7%, respectively, from the year-ago levels.
Brinker International, Inc. EAT sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 213.4%, on average. EAT’s shares have risen 90.9% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 5% and 40.3% growth, respectively, from the year-earlier actuals.
El Pollo Loco Holdings, Inc. LOCO carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 19.4%, on average. LOCO’s shares have risen 15.6% in the past year.
The Zacks Consensus Estimate for LOCO’s 2025 sales and EPS indicates 3.8% and 9.9% growth, respectively, from the prior-year figures.
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Cracker Barrel Old Country Store, Inc. (CBRL) : Free Stock Analysis Report
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Wingstop Inc. (WING) : Free Stock Analysis Report
