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Cracker Barrel (CBRL) Down 1.1% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) . Shares have lost about 1.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 Q3 Earnings Beat Estimates, Sales Lag
Cracker Barrel Old Country Store posted mixed third-quarter fiscal 2017 results wherein the bottom line beat the Zacks Consensus Estimate, while the top line lagged the same.
Earnings & Revenues
Cracker Barrel’s adjusted earnings of $1.95 per share for the fiscal third quarter, beat the Zacks Consensus Estimate of $1.84 by 6% and also increased 7.1% from the year-ago figure of $1.82.
The company reported revenues of $700.4 million in the quarter, missing the Zacks Consensus Estimate of $710.8 million by nearly 1.5%. Meanwhile, revenues remained flat on a year-over-year basis.
Behind the Headline Numbers
Comparable store restaurant sales decreased 0.4% year over year, which compared unfavourably with the 0.6% growth recorded in the fiscal second quarter. A 1.7% increase in average check was more than offset by a 2.1% decrease in traffic, leading to the comps decline. Notably, the average menu price rise for the quarter was close to 1.6%.
Meanwhile, comparable store retail sales fell 4.7% in the fiscal third quarter compared with the 2.2% decrease recorded last quarter.
Operating Highlights
Operating margin in the quarter was 10.2%, an increase of 60 basis points (bps) from 9.6% a year ago owing to reduced cost of goods sold (down 90 bps as a percentage of revenue) and general and administrative expenses (down 10 bps), partially offset by an increase in labor and related expenses (up 20 bps) and other store operating expenses (up 20 bps).
Fourth-Quarter Fiscal 2017 Guidance
In the fourth-quarter fiscal 2017, the company expects earnings in the range of $2.10-$2.20 per share.
Fiscal 2017 Outlook
Cracker Barrel anticipates earnings in the band of $8.25 to $8.35 per share, up from the earlier guided range of $8.10 to $8.25 in fiscal 2017.
Meanwhile, revenues are still expected to be approximately $2.95 billion in fiscal 2017. The outlook is based on the company’s plan to open six (earlier eight) new Cracker Barrel stores and three (earlier four) new Holler & Dash Biscuit House restaurants, thereby expanding the store count beyond the existing number of 644 and four, for the respective brands.
The company now projects comparable store restaurant sales to be flat to up 0.5% compared with the previous guided range of 0.5% to 1%. Additionally, comparable store retail sales are expected to be down roughly 3.5%, which reflects the company's more cautious expectations for the fiscal fourth quarter. The previous expectation was of a dip of approximately 2%.
Moreover, operating margin is now expected to be 10.5% of total revenue for fiscal 2017, which is the high end of the previously guided range of 10-10.5%. Capital expenditures are still anticipated to be roughly $125 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
Cracker Barrel Old Country Store, Inc. Price and Consensus
At this time, Cracker Barrel's stock has an average Growth Score of 'C', however its Momentum is doing a bit better with a 'B'. Charting a somewhat similar path, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Cracker Barrel (CBRL) Down 1.1% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) . Shares have lost about 1.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 Q3 Earnings Beat Estimates, Sales Lag
Cracker Barrel Old Country Store posted mixed third-quarter fiscal 2017 results wherein the bottom line beat the Zacks Consensus Estimate, while the top line lagged the same.
Earnings & Revenues
Cracker Barrel’s adjusted earnings of $1.95 per share for the fiscal third quarter, beat the Zacks Consensus Estimate of $1.84 by 6% and also increased 7.1% from the year-ago figure of $1.82.
The company reported revenues of $700.4 million in the quarter, missing the Zacks Consensus Estimate of $710.8 million by nearly 1.5%. Meanwhile, revenues remained flat on a year-over-year basis.
Behind the Headline Numbers
Comparable store restaurant sales decreased 0.4% year over year, which compared unfavourably with the 0.6% growth recorded in the fiscal second quarter. A 1.7% increase in average check was more than offset by a 2.1% decrease in traffic, leading to the comps decline. Notably, the average menu price rise for the quarter was close to 1.6%.
Meanwhile, comparable store retail sales fell 4.7% in the fiscal third quarter compared with the 2.2% decrease recorded last quarter.
Operating Highlights
Operating margin in the quarter was 10.2%, an increase of 60 basis points (bps) from 9.6% a year ago owing to reduced cost of goods sold (down 90 bps as a percentage of revenue) and general and administrative expenses (down 10 bps), partially offset by an increase in labor and related expenses (up 20 bps) and other store operating expenses (up 20 bps).
Fourth-Quarter Fiscal 2017 Guidance
In the fourth-quarter fiscal 2017, the company expects earnings in the range of $2.10-$2.20 per share.
Fiscal 2017 Outlook
Cracker Barrel anticipates earnings in the band of $8.25 to $8.35 per share, up from the earlier guided range of $8.10 to $8.25 in fiscal 2017.
Meanwhile, revenues are still expected to be approximately $2.95 billion in fiscal 2017. The outlook is based on the company’s plan to open six (earlier eight) new Cracker Barrel stores and three (earlier four) new Holler & Dash Biscuit House restaurants, thereby expanding the store count beyond the existing number of 644 and four, for the respective brands.
The company now projects comparable store restaurant sales to be flat to up 0.5% compared with the previous guided range of 0.5% to 1%. Additionally, comparable store retail sales are expected to be down roughly 3.5%, which reflects the company's more cautious expectations for the fiscal fourth quarter. The previous expectation was of a dip of approximately 2%.
Moreover, operating margin is now expected to be 10.5% of total revenue for fiscal 2017, which is the high end of the previously guided range of 10-10.5%. Capital expenditures are still anticipated to be roughly $125 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
Cracker Barrel Old Country Store, Inc. Price and Consensus
Cracker Barrel Old Country Store, Inc. Price and Consensus | Cracker Barrel Old Country Store, Inc. Quote
VGM Scores
At this time, Cracker Barrel's stock has an average Growth Score of 'C', however its Momentum is doing a bit better with a 'B'. Charting a somewhat similar path, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.