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Why Is Cracker Barrel (CBRL) Up 11.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Cracker Barrel Old Country Store (CBRL - Free Report) . Shares have added about 11.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cracker Barrel due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Cracker Barrel Q4 Earnings Top Estimates, Revenues Lag
Cracker Barrel reported mixed fourth-quarter fiscal 2022 (ended Jul 29, 2022) results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top line rose year over year and the bottom line declined from the prior-year quarter's figure.
Earnings & Revenues
The company’s fiscal fourth-quarter adjusted earnings per share (EPS) of $1.57, beating the Zacks Consensus Estimate of $1.38. In the prior-year quarter, the company had reported an adjusted EPS of $2.25.
Cracker Barrel reported revenues of $830.4 million during the quarter under review, which missed the consensus mark of $842 million. Although the top line rose 5.9% year over year, it fell short of the company’s expectations of 8% year-over-year growth. Lower-than-anticipated travel volumes, fewer visits from older guests, high gas prices and inflationary pressures impacted the top line.
Comps Details
Comparable store restaurant sales inched up 6.1% in the reported quarter compared with the same period in fiscal 2021. The upside was primarily backed by 7% menu pricing. Comparable store retail sales increased 3% year over year.
Operating Highlights
During the fiscal fourth quarter, the cost of goods sold (excluding depreciation and rent) came in at $273.4 million compared with $235.8 million reported in the prior-year quarter. As a percentage of total revenues, the cost of goods sold (exclusive of depreciation and rent) increased 280 basis points (bps) year over year to 32.9%. General and administrative expenses during the quarter came in at $32.9 million compared with $36.9 million reported in the prior-year quarter.
Adjusted operating income in the fiscal fourth quarter totaled $36.2 million compared with $65.9 million reported in the prior-year quarter. The adjusted operating margin was 4.4% compared with 8.4% in the prior-year quarter. The downside was mainly driven by commodity, wage and other expense inflation, higher staffing levels and elevated maintenance expense.
Balance Sheet
As of Jul 29, 2022, cash and cash equivalents were $45.1 million compared with $144.6 million as of Jul 30, 2021.
Inventory at the end of fourth-quarter fiscal 2022 amounted to $213.2 million, up from $138.3 million at the end of fourth-quarter fiscal 2021.
Long-term debt amounted to $423.2 million at the end of the quarter compared with $327.3 million at the end of the prior-year quarter.
Net cash provided by operating activities was $205.3 million in fiscal 2022 compared with $301.9 million recorded a year ago.
The company declared a cash dividend of $1.30 per share. The dividend will be paid out on Nov 8, 2022, to shareholders on record as of Oct 21, 2022.
Fiscal 2022 Highlights
Fiscal 2022 adjusted EPS came in at $6.09 compared with $5.14 reported in the previous year.
Total revenues in fiscal 2022 came in at $3,267.8 million compared with $2,821.4 million in fiscal 2021.
Adjusted operating income in fiscal 2022 totaled $165.7 million (or 5.1% of total revenues) compared with $166.8 million (or 5.9%) in the prior fiscal year.
Fiscal 2023 Outlook
For fiscal 2023, the company expects revenue to grow in the range of 7-8% year over year. Operating income growth is expected to be between 8% and 10% on a year-over-year basis. During the year, the company anticipates contributions worth $20-$25 million from cost savings and business model improvements.
In fiscal 2023, the company anticipates commodity inflation of approximately 8% (with sequential moderation) and wage inflation of approximately 5%. Meanwhile, the effective tax rate for fiscal 2023 is anticipated at approximately 10-15%.
Coming to store openings, the company expects to open three to four new Cracker Barrel locations and 15-20 new Maple Street Biscuit locations in fiscal 2023. Capital expenditures during the year are anticipated at approximately $125 million. This includes $30 million allocated to new store development.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 18.41% due to these changes.
VGM Scores
At this time, Cracker Barrel has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cracker Barrel has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Cracker Barrel is part of the Zacks Retail - Restaurants industry. Over the past month, Darden Restaurants (DRI - Free Report) , a stock from the same industry, has gained 8.5%. The company reported its results for the quarter ended August 2022 more than a month ago.
Darden Restaurants reported revenues of $2.45 billion in the last reported quarter, representing a year-over-year change of +6.1%. EPS of $1.56 for the same period compares with $1.76 a year ago.
Darden Restaurants is expected to post earnings of $1.41 per share for the current quarter, representing a year-over-year change of -4.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Darden Restaurants. Also, the stock has a VGM Score of A.
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Why Is Cracker Barrel (CBRL) Up 11.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Cracker Barrel Old Country Store (CBRL - Free Report) . Shares have added about 11.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cracker Barrel due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Cracker Barrel Q4 Earnings Top Estimates, Revenues Lag
Cracker Barrel reported mixed fourth-quarter fiscal 2022 (ended Jul 29, 2022) results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top line rose year over year and the bottom line declined from the prior-year quarter's figure.
Earnings & Revenues
The company’s fiscal fourth-quarter adjusted earnings per share (EPS) of $1.57, beating the Zacks Consensus Estimate of $1.38. In the prior-year quarter, the company had reported an adjusted EPS of $2.25.
Cracker Barrel reported revenues of $830.4 million during the quarter under review, which missed the consensus mark of $842 million. Although the top line rose 5.9% year over year, it fell short of the company’s expectations of 8% year-over-year growth. Lower-than-anticipated travel volumes, fewer visits from older guests, high gas prices and inflationary pressures impacted the top line.
Comps Details
Comparable store restaurant sales inched up 6.1% in the reported quarter compared with the same period in fiscal 2021. The upside was primarily backed by 7% menu pricing. Comparable store retail sales increased 3% year over year.
Operating Highlights
During the fiscal fourth quarter, the cost of goods sold (excluding depreciation and rent) came in at $273.4 million compared with $235.8 million reported in the prior-year quarter. As a percentage of total revenues, the cost of goods sold (exclusive of depreciation and rent) increased 280 basis points (bps) year over year to 32.9%. General and administrative expenses during the quarter came in at $32.9 million compared with $36.9 million reported in the prior-year quarter.
Adjusted operating income in the fiscal fourth quarter totaled $36.2 million compared with $65.9 million reported in the prior-year quarter. The adjusted operating margin was 4.4% compared with 8.4% in the prior-year quarter. The downside was mainly driven by commodity, wage and other expense inflation, higher staffing levels and elevated maintenance expense.
Balance Sheet
As of Jul 29, 2022, cash and cash equivalents were $45.1 million compared with $144.6 million as of Jul 30, 2021.
Inventory at the end of fourth-quarter fiscal 2022 amounted to $213.2 million, up from $138.3 million at the end of fourth-quarter fiscal 2021.
Long-term debt amounted to $423.2 million at the end of the quarter compared with $327.3 million at the end of the prior-year quarter.
Net cash provided by operating activities was $205.3 million in fiscal 2022 compared with $301.9 million recorded a year ago.
The company declared a cash dividend of $1.30 per share. The dividend will be paid out on Nov 8, 2022, to shareholders on record as of Oct 21, 2022.
Fiscal 2022 Highlights
Fiscal 2022 adjusted EPS came in at $6.09 compared with $5.14 reported in the previous year.
Total revenues in fiscal 2022 came in at $3,267.8 million compared with $2,821.4 million in fiscal 2021.
Adjusted operating income in fiscal 2022 totaled $165.7 million (or 5.1% of total revenues) compared with $166.8 million (or 5.9%) in the prior fiscal year.
Fiscal 2023 Outlook
For fiscal 2023, the company expects revenue to grow in the range of 7-8% year over year. Operating income growth is expected to be between 8% and 10% on a year-over-year basis. During the year, the company anticipates contributions worth $20-$25 million from cost savings and business model improvements.
In fiscal 2023, the company anticipates commodity inflation of approximately 8% (with sequential moderation) and wage inflation of approximately 5%. Meanwhile, the effective tax rate for fiscal 2023 is anticipated at approximately 10-15%.
Coming to store openings, the company expects to open three to four new Cracker Barrel locations and 15-20 new Maple Street Biscuit locations in fiscal 2023. Capital expenditures during the year are anticipated at approximately $125 million. This includes $30 million allocated to new store development.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 18.41% due to these changes.
VGM Scores
At this time, Cracker Barrel has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cracker Barrel has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Cracker Barrel is part of the Zacks Retail - Restaurants industry. Over the past month, Darden Restaurants (DRI - Free Report) , a stock from the same industry, has gained 8.5%. The company reported its results for the quarter ended August 2022 more than a month ago.
Darden Restaurants reported revenues of $2.45 billion in the last reported quarter, representing a year-over-year change of +6.1%. EPS of $1.56 for the same period compares with $1.76 a year ago.
Darden Restaurants is expected to post earnings of $1.41 per share for the current quarter, representing a year-over-year change of -4.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Darden Restaurants. Also, the stock has a VGM Score of A.