Cracker Barrel Old Country Store, Inc. CBRL reported second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top increased year over year while the bottom line declined from the prior-year quarter figure.
Following the results, shares of the company dropped 3% during trading hours on Feb 27. Negative investor sentiments were witnessed as management stated issues related to margin pressures stemming from labor cost inflation. The company expects ongoing margin challenges in the short term, particularly in the upcoming fiscal third quarter.
Earnings & Revenues
In second-quarter fiscal 2024, the company reported adjusted earnings per share (EPS) of $1.37, beating the Zacks Consensus Estimate of $1.29. In the prior-year quarter, it reported adjusted EPS of $1.48.
Cracker Barrel Old Country Store, Inc. Price, Consensus and EPS Surprise
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 $935.4 million beat the consensus mark of $916 million. The top line inched up 0.2% year over year. The upside was primarily backed by sequential improvements in traffic. Also, guest experience enhancements and marketing optimizations added to the positives.
Comps Details
Comparable store restaurant sales increased 1.2% in the reported quarter compared with the same period in fiscal 2023. Comparable store retail sales declined 5.3% year over year. During the quarter, menu pricing increases came in at 4.8% year over year.
Operating Highlights
During the fiscal second quarter, the cost of goods sold (excluding depreciation and rent) came in at $314.9 million, down 4% year over year. As a percentage of total revenues, the cost of goods sold (excluding depreciation and rent) fell 130 basis points (bps) year over year to 33.7%. Per our model, the metric was anticipated at 32.7%.
General and administrative expenses totaled $52.5 million, down from $45.5 million reported in the prior-year quarter. Our projection for the metric was $47.4 million.
Adjusted operating income in the fiscal second quarter totaled $36 million, down from $55 million reported in the year-ago quarter. Our projection for the metric was $35.6 million.
Adjusted operating margin was 3.8%, down 70 bps from the prior-year quarter’s levels. The downside was mainly due to a rise in labor and related expenditures, other operating expenses and general and administrative costs. This was partially offset by the lower cost of goods sold.
Balance Sheet
As of Jan 26, 2024, cash and cash equivalents were $12.6 million compared with $49.4 million as of Jan 27, 2023.
Inventory at the fiscal second-quarter end reached $172.7 million compared with $187.3 million reported in the prior-year period.
Long-term debt as of Jan 26, 2024, was $452.3 million compared with $454.1 million as of Jan 27, 2023.
CBRL declared a cash dividend of $1.30 per share. The dividend will be paid out on May 7, 2024, to shareholders on record as of Apr 12, 2024.
2024 Guidance
For fiscal 2024, the company expects revenues in the range of $3.5-$3.6 billion compared with the previous expectation of $3.4-$3.5 billion. Adjusted operating income is anticipated to be between $125 and $135 million.
Management projects commodity inflation in the range of 0% to 2%. Hourly wage inflation is suggested to be nearly 5%.
Coming to store openings, CBRL aims to open two new Cracker Barrel units and nine-11 new Maple Street Biscuit company units during the fiscal year. Capital expenditures during the year are envisioned in the range of $120-$135 million.
Zacks Rank
Cracker Barrel currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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