Back to top

Image: Bigstock

What's in Store for Cracker Barrel's (CBRL) Q1 Earnings?

Read MoreHide Full Article

Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) is scheduled to report first-quarter fiscal 2018 results on Nov 21, before the opening bell.

Last quarter, the company delivered a positive earnings surprise of 2.29%. In fact, the bottom line surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 4.96%.

Cracker Barrel’s continual expansion plans along with various seasonal promotions are likely to boost the top line. The consensus estimate for revenues in the to-be-reported quarter is pegged at $720.10 million, reflecting a 1.4% year-over-year increase.

However, a challenging restaurant environment has put Cracker Barrel’s sales under pressure. Evidently, the company witnessed a decline in comparable store restaurant sales in the last two quarters, after posting 11 consecutive quarters of positive comps. Also, Cracker Barrel’s retail business has been under pressure over the last few quarters, given the challenges faced by the retail industry, as a whole. Continued soft consumer spending environment in the U.S. restaurant space might affect fiscal first-quarter results as well.

Yet, efforts to boost comps via increased focus onoff-premise business, improving guest experience, menu innovation and excellent operational execution are expected to drive comps in the quarter. Notably, the consensus estimate expects comparable store restaurant sales and retail sales to remain flat in the quarter to be reported.

Meanwhile, despite the cost-saving initiatives, higher labor costs, expenses for opening new units along with significant investments in sales-building initiatives are likely to bring down profits.

Notably, management expects earnings per share in the fiscal first quarter in the range of $1.85 to $1.95. The consensus estimate for earnings is pegged at $1.92, reflecting a 4.3% year-over-year decline.

In addition to weak comps and higher costs, the recent Harvey and Irma hurricanes are likely to impact results.

Also, our proven model does not conclusively show that Cracker Barrel is likely to beat earnings in the first quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.

Zacks ESP: Cracker Barrel has an Earnings ESP of -0.95%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Cracker Barrel currently has a Zacks Rank #3.

Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Cracker Barrel Old Country Store, Inc. Price and EPS Surprise

 

 

Stocks to Consider

Here are some companies in the Retail-Wholesale sector that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Chico's FAS, Inc. has an Earnings ESP of +5.66% and a Zacks Rank #3. The company’s quarterly results are scheduled to release on Nov 21, before market opens.

AutoZone, Inc. (AZO - Free Report) has an Earnings ESP of +0.59% and a Zacks Rank #3. The company is slated to release its quarterly numbers on Dec 5, before market opens.

American Eagle Outfitters, Inc. (AEO - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #2. The company is scheduled to release its quarterly numbers on Dec 6, before market opens.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

Published in