Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) reported fourth-quarter fiscal 2020 (ended Jul 31, 2020) results, wherein earnings missed the Zacks Consensus Estimate, while revenues beat the same. However, both the metrics declined on a year-over-year basis. Post the results, shares of the company slipped approximately 5% during trading hours on Sep 16.
Adjusted loss (excluding the impairment charges related to store assets, expenses related to COVID-19, the impairment charge related to Punch Bowl Social, and the related tax effects) was 85 cents per share during the quarter. Notably, the figure was 54.5% wider than the Zacks Consensus Estimate of a loss of 55 cents. In the prior-year quarter, the company reported earnings per share of $2.70.
Revenues of $495.1 million beat the consensus mark of $484 million by 2.3%. However, the figure declined 37.1% on a year-over-year basis, primarily due to lower traffic owing to the social-distancing protocols. Of revenues, 81.1% was contributed by the Restaurant segment and 18.9% was added by Retail supply chain.
Comparable store restaurant sales declined 39.2% in the reported quarter owing to a 40.7% fall in comparable store restaurant traffic, partially offset by a 1.5% uptick in average check. Moreover, comparable store retail sales in the fiscal fourth quarter declined 32.3% from the prior-year quarter’s figure.
Cost of goods sold (exclusive of depreciation and rent) increased 170 basis points (bps) year over year. General and administrative expenses rose 320 bps year over year.
Operating income in the fiscal fourth quarter totaled $40.1 million compared with $79.4 million in the prior-year quarter. Operating margin was reported at 8.1%, down 200 bps from the prior-year quarter. Adjusted operating loss for the fiscal fourth quarter was $20 million.
As of Jul 31, 2020, cash and cash equivalents were $437 million, up from $36.9 million as of Aug 2, 2019.
Inventory at the end of the quarter under review amounted to $139.1 million, down from $155 million at the end of fourth-quarter fiscal 2019.
Long-term debt amounted to $910 million at the end of the quarter, up from $400 million at the end of the prior-year quarter.
Net cash provided by operating activities was $161 million in the fiscal 2020 compared with $362.8 million in the prior year.
Meanwhile, during the fourth quarter of fiscal 2020, the company entered into two sale-leaseback transactions involving a group of 64 properties (expiring in 2021) to bolster liquidity and strengthen its financial position.
Firstly, the company entered into a new 20-year lease agreement with Oak Street Real Estate Capital. Notably, the transaction resulted in approximately $70 million of non-cash gain on sale of assets during the fourth quarter. Additionally, it entered into a second sale-leaseback transaction (expiring in the first quarter of fiscal 2021), whereby the company sold an additional 62 properties to Oak Street for a purchase price of approximately $150 million.
Fiscal 2020 Highlights
Fiscal 2020 GAAP loss per diluted share came in at $1.36 against prior-year earnings of $9.27.
Total revenues for fiscal 2020 came in at $2,522.8 million compared with $3,071.9 million in fiscal 2019.
GAAP operating income in fiscal 2020 totaled $103.6 million (or 4.1% of total revenues), compared with $282.8 million (or 9.2%) in the prior fiscal.
General and administrative expenses for fiscal 2020 was reported at $147 million compared with $152.8 million in fiscal 2019.
Fiscal 2021 Outlook
Owing to the coronavirus crisis, the company expects operations to be significantly impacted by factors such as capacity restrictions, jurisdictional regulations and state of economy reopenings. Notably, it expects the pandemic scenario to continue in the foreseeable future. Therefore, owing to the uncertainty tied to the crisis, the company is not providing any customary annual guidance.
However, the company stated that it anticipates capital expenditures of approximately $100 million for fiscal 2021.
Post the acquisition of Maple Street Biscuit Company in October 2019, the company subsequently converted its Holler & Dash units into Maple Street locations. With one opening in fiscal 2020, the total number of company-owned Maple units under operation came in at 35.
Nevertheless, the company expects to open three new Cracker Barrel stores and up to 15 new Maple Street units in fiscal 2021.
Cracker Barrel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the same space include Brinker International, Inc. (EAT - Free Report) , Darden Restaurants, Inc. (DRI - Free Report) and Domino's Pizza, Inc. (DPZ - Free Report) . Brinker sports a Zacks Rank #1, while Darden and Domino's carry a Zacks Rank #2 (Buy).
Brinker has a three-five year earnings per share growth rate of 11.4%.
Darden has a trailing four-quarter earnings surprise of 8.1%, on average.
Domino's fiscal 2020 earnings are expected to rise 33.8%.
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