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Cracker Barrel (CBRL) Stock up as Q1 Earnings Beat Estimates

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Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) reported first-quarter fiscal 2021 (ended oct 30, 2020) results, wherein earnings and revenues beat the Zacks Consensus Estimate. However, the top and the bottom line declined on a year-over-year basis.

Nonetheless, the company announced significant improvement in both comparable store restaurant and retail sales compared with the previous quarter. Also, it indicated strong financial liquidity to tide over the ongoing crisis. Following the announcement, shares of the company grew 2.1% during trading hours on Dec 3.

Earnings & Revenues

During the fiscal first quarter, adjusted earnings per share of 69 cents beat the Zacks Consensus Estimate of 42 cents by 64.3%. However, the bottom line declined 67.9% from $2.15 reported in the prior-year quarter.

Revenues of $646.5 million during the quarter beat the consensus mark of $639 million by 1.2%. However, the figure declined 13.7% on a year-over-year basis, primarily due to lower traffic owing to social-distancing protocols. Of revenues, 79.7% was contributed by the Restaurant segment and 20.3% was added by Retail supply chain.

Comps Details

Comparable store restaurant sales declined 16.4% in the reported quarter owing to an 18.3% fall in comparable store restaurant traffic, partially offset by a 1.9% uptick in average check. Moreover, comparable store retail sales in the fiscal first quarter declined 8.1% from the prior-year quarter’s figure.

During the fiscal first quarter, comparable store off-premise sales grew 122% year over year and represented approximately 25% of restaurant sales.

Meanwhile, the company stated that in the second quarter of fiscal 2021 (quarter to date through Dec 3, 2020), preliminary comparable store restaurant sales and comparable store retail sales each decreased by approximately 20% from the prior-year period.

Operating Highlights

During the fiscal first quarter, cost of goods sold (exclusive of depreciation and rent) increased 150 basis points (bps) year over year. General and administrative expenses rose 80 bps year over year.

Adjusted operating income in the fiscal first quarter totaled $27.7 million compared with $63.4 million in the prior-year quarter. Operating margin was reported at 4.3%, down 420 bps from the prior-year quarter.

Balance Sheet

As of Oct 30, 2020, cash and cash equivalents were $597.6 million, up from $43.2 million as of Nov 1, 2019.

Inventory at the end of the quarter under review amounted to $155.7 million, down from $188.7 million at the end of first-quarter fiscal 2020.

Long-term debt amounted to $910 million at the end of the quarter, up from $485 million at the end of the prior-year quarter.

During the first quarter of fiscal 2021, net cash provided by operating activities came in at $57 million compared with $44.8 million in the prior-year quarter.

Owing to the uncertainty tied to the COVID-19 pandemic, the company has suspended its share repurchase activity.

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 re-openings. 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 annual guidance.

Store Updates

Post the acquisition of Maple Street Biscuit Company in October 2019, the company subsequently converted six Holler & Dash units into Maple Street locations and closed one Holler & Dash unit permanently. With one opening in fiscal 2020, the total number of company-owned Maple units under operation was 35.

As of Oct 30, 2020, the company had 663 Cracker Barrel units and 35 Maple units, making it a total of 698 company-owned units under operation. In the prior-year quarter, the company had 695 units under operation.

Zacks Rank

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 Fiesta Restaurant Group, Inc. . Brinker sports a Zacks Rank #1, while Darden and Fiesta Restaurant carry a Zacks Rank #2 (Buy).

Brinker has a three-five year earnings per share growth rate of 21.8%.

Darden has a trailing four-quarter earnings surprise of 262.8%, on average.

Fiesta Restaurant 's 2021 earnings are expected to surge 418.8%.

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