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Cracker Barrel (CBRL) Earnings Beat, Revenues Miss in Q1

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Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) posted mixed first-quarter fiscal 2018 results, with the bottom line beating the Zacks Consensus Estimate and the top line lagging the same. The mixed results led to a 4% decline in the company’s share price yesterday.

Earnings & Revenues

Earnings of $1.92 per share surpassed the Zacks Consensus Estimate of $1.86 by 3.2%. However, the bottom line declined 4.5% from the year-ago figure of $2.01 due to the impact of recent hurricanes Harvey and Irma. According to management’s estimates, hurricanes hurt earnings by 7cents a share.

The company reported revenues of $710.4 million in the quarter, missing the Zacks Consensus Estimate of $719.1 million by 1.2%. Meanwhile, the top line increased a nominal 0.1% on a year-over-year basis.

 

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

 

 

Behind the Headline Numbers

Comparable store restaurant sales increased 0.2% year over year, including a 2% increase in average check, partially offset by a 1.8% decrease in store traffic. The figure compared favorably with a 0.8% decline in fourth-quarterfiscal 2017. Notably, the average menu price rise in the quarter was close to 2.2%.

Comparable store retail sales in the fiscal first quarter fell 3.6% in the fiscal first-quarter, slightly better than the 4.4% decline recorded in the last quarter.

Operating Highlights

Operating margin in the reported quarter was 10%, down 70 basis points (bps) from 10.7% a year ago.

Second-Quarter Outlook

For second-quarter fiscal 2018, management expects earnings per diluted share between $2.15 and $2.25, including an estimated negative impact of 3 cents from the hurricanes.

Fiscal 2018 Guidance

Cracker Barrel decreased the lower end of its previously expected range of earnings per diluted share to $8.75—$8.90 (earlier $8.85 to $9.00), reflecting approximately 10-cent negative impact from hurricanes. It is to be noted that the company's 2018 fiscal year has 53-weeks. Cracker Barrel estimates the impact of the 53rd week, which is included in its guidance, to contribute roughly 30 cents to earnings per share.

Total revenues are still expected at $3.1 billion, due to the expected opening of eight or nine new Cracker Barrel stores and three new Holler & Dash stores. The outlook also takes into consideration a projected increase in comparable store restaurant sales of 2% to 3% (lower than the previously guided range of 2.5% to 3.5%). Comparable store retail sales are expected to remain flat (earlier flat to up 1%).

Operating margin as a percentage of revenue is expected to be 10.5%. Capital expenditures are anticipated in the band of $150 million to $160 million, same as the previous band.

Cracker Barrel carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

Darden Restaurants, Inc.’s (DRI - Free Report) first-quarter fiscal 2018 adjusted earnings of 99 cents per share outpaced the Zacks Consensus Estimate of 98 cents by more than1%. Further, the bottom line improved 12.5% year over year on the back of higher revenues.

Buffalo Wild Wings, Inc.’s third-quarter adjusted earnings of $1.36 per share increased 5.4% year over year and surpassed the Zacks Consensus Estimate of 78 cents by 74.4%.

In third-quarter fiscal 2017, DineEquity, Inc. (DIN - Free Report) posted earnings of 91 cents per share that surpassed the Zacks Consensus Estimate of 88 cents by 3.4%. However, earnings declined 37.8% year over year mainly due to lower gross profits.

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