Cracker Barrel (CBRL) Q2 Earnings & Revenues Beat Estimates

Cracker Barrel Old Country Store, Inc. CBRL reported better-than-expected results for the second quarter of fiscal 2019.

Adjusted earnings of $2.52 per share surpassed the Zacks Consensus Estimate of $2.46 by 2.4%. However, earnings declined 7.7% year over year on high expenses.

Revenues of $811.7 million surpassed the consensus mark of $811.3 million. Moreover, revenues increased 3% from the prior-year quarter, driven by higher comparable restaurant sales.

Despite better-than-expected results, shares of Cracker Barrel fell 3.2% on Feb 26. However, the company’s shares have outpaced the S&P 500’s rally over the past year.

Comps Details

Comparable store restaurant sales increased 3.8% in the reported quarter, buoyed by a 3.7% uptick in average check and a 0.1% increase in comparable store restaurant traffic. The average menu price rose about 2.2% in the reported quarter. In fact, comps compared favorably with the fiscal first quarter’s 1.4% rise.

Comparable store retail sales in the fiscal second quarter decreased 1.4%, comparing unfavorably with 4.3% improvement recorded in the first quarter.

Operating Highlights

Operating income in the fiscal second quarter was $76.7 million, flat year over year. Operating margin in the reported quarter was 9.5%, down 20 basis points (bps) from 9.7% a year ago.

As a percentage of total revenues, cost of goods declined 40 bps and labor expenses increased 30 bps. The company witnessed rise in other operating, and general and administrative expenses.

Balance Sheet

As of Feb 1, 2019, cash and cash equivalents were $169.6 million, up from $168.8 million as of Jan 26, 2018 (end of second-quarter fiscal 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 $151.4 million, down from second-quarter fiscal 2018 value of $159.6 million.

Cash flow from operating activities was $190.9 million as of Feb 1, 2019, compared with $148.5 million as of Jan 26, 2018.

Fiscal 2019 Guidance

The company expects total revenues of $3.05 billion. Comparable store restaurant sales and retail sales are expected to grow 1-2%, up from the previously mentioned range of flat to up 1%. 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 & Peer Releases

Cracker Barrel currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Brinker EAT reported mixed second-quarter fiscal 2019 results, wherein earnings were in line with the Zacks Consensus Estimate but revenues surpassed the same. Adjusted earnings of 89 cents per share were in line with the Zacks Consensus Estimate and increased 2.3% on a year-over-year basis.

McDonald’s MCD reported impressive fourth-quarter 2018 results. Adjusted earnings of $1.97 per share surpassed the consensus mark of $1.90 and increased 15% from the year-ago quarter (18% in constant currencies). The upside reflects stronger operating performance.

Starbucks SBUX reported impressive first-quarter fiscal 2019 results. Adjusted earnings of 75 cents per share surpassed the Zacks Consensus Estimate of 65 cents and grew 15.4% on a year-over-year basis.

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