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Cracker Barrel (CBRL) Down 3.9% Since Last 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 (CBRL - Free Report) . Shares have lost about 3.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cracker Barrel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Cracker Barrel Q4 Earnings & Revenues Lag Estimates
Cracker Barrel Old Country Store, Inc. reported fourth-quarter fiscal 2021 results (ended Jul 30, 2021), with earnings and revenues missing the Zacks Consensus Estimate. However, the top and the bottom line increased on a year-over-year basis.
Following the results, the company’s shares fell 2.7% during trading hours on Sep 21. Negative investor sentiments were witnessed as management stated issues related to staffing, commodity and wage inflation as well as the resurgence of coronavirus cases.
However, the company cited relief on account of solid performances by its off-premise model, retail business and the Maple Street Biscuit Company concept. Going forward, the company anticipates the momentum in recovery to continue on the back of its cost-saving initiatives, introduction of a new dinner menu along with the continued roll-out of beer and wine to its stores.
Earnings & Revenues
During the fiscal fourth quarter, adjusted earnings per share (EPS) of $2.25 missed the Zacks Consensus Estimate of $2.42. In the prior year quarter, the company reported an adjusted loss per share of 85 cents.
During the quarter, revenues of $784.4 million missed the consensus mark of $791 million by 0.9%. The figure increased 58.4% on a year-over-year basis. The company benefited from average weekly sales volumes improvement courtesy of increase in dine-in traffic, retained off-premise volumes and robust retail performance. The company’s average weekly Dine-in sales volumes increased to nearly $59,000 per week in July from approximately $54,000 per week in April.
Comps Details
Comparable store restaurant sales declined 6.8% in the reported quarter from the levels recorded in the same period in fiscal 2019. Comparable store restaurant sales surged 53.5% year over year. Moreover, comparable retail sales increased 18.2% and 74.8% from the levels reported in the same period in 2019 and 2020, respectively.
During the fiscal fourth quarter, comparable store off-premise sales soared 108.6% from 2019 levels.
Operating Highlights
During the fiscal fourth quarter, cost of goods sold (exclusive of depreciation and rent) declined 40 basis points (bps) year over year to 30.1%. General and administrative expenses contracted 360 bps year over year to 4.7%.
Adjusted operating income in the fiscal fourth quarter totaled $65.9 million, up from ($20) million in the prior-year quarter. Adjusted operating margin came in at 8.4%. Margin benefited from better-than-expected sales performance, particularly in the company’s retail business.
Balance Sheet
As of Jul 30, 2021, cash and cash equivalents were $144.6 million, down from $437 million as on Jul 31, 2020.
Inventory at the end of the fiscal fourth quarter amounted to $138.3 million, down from $139.1 million at the end of fourth-quarter fiscal 2020.
Long-term debt amounted to $327.3 million at the end of the quarter, down from $910 million at the end of the prior-year quarter.
Net cash provided by operating activities was $301.9 million in the fiscal 2021 compared with $161 million recorded a year ago.
The company announced a hike in its quarterly dividend payout. The company raised its quarterly dividend by 30%, which indicates its intention to utilize free cash for boosting shareholders’ returns. The company raised quarterly dividend to $1.30 per share (or $5.20 annually) from the previous payout of $1.00 (or $4.00 annually). The hiked dividend will be payable on Nov 9, 2021, to shareholders of record as of Oct 22, 2021. Further, the management approved share repurchases of up to $100 million.
Fiscal 2021 Highlights
Fiscal 2021 adjusted EPS came in at $5.14 compared with $2.04 reported in the previous year.
Total revenues in fiscal 2021 came in at $2,821.4 million compared with $ 2,522.8 million in fiscal 2020.
GAAP operating income in fiscal 2021 totaled $366.7 million (or 13% of total revenues) compared with $103.6 million (or 4.1%) in the prior fiscal year.
Store Updates
As of Jul 30, 2021, the company had 664 Cracker Barrel units and 37 Maple units, making it a total of 701 company-owned units under operation.
Fiscal 2022 Outlook
Owing to the uncertainty revolving around the COVID-19 pandemic as well as the current operating and staffing environment, the company is not providing any customary annual guidance. The company stated concerns regarding the nationwide increase in infections as it could negatively impact the guest visitation patterns as well as the availability of its employees. The company expects first-quarter fiscal 2022 sales to be negatively impacted by the same.
For fiscal 2022, the company anticipates capital expenditures of approximately $120 million. Also, it expects commodity and wage inflation in the mid-to-high single digits. Meanwhile, effective tax rate for 2022 is anticipated at approximately 18%.
Coming to store openings, the company expects to open three new Cracker Barrel locations and 15 new Maple Street Biscuit locations in fiscal 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -8.99% due to these changes.
VGM Scores
At this time, Cracker Barrel has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Cracker Barrel has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Cracker Barrel (CBRL) Down 3.9% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Cracker Barrel Old Country Store (CBRL - Free Report) . Shares have lost about 3.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cracker Barrel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Cracker Barrel Q4 Earnings & Revenues Lag Estimates
Cracker Barrel Old Country Store, Inc. reported fourth-quarter fiscal 2021 results (ended Jul 30, 2021), with earnings and revenues missing the Zacks Consensus Estimate. However, the top and the bottom line increased on a year-over-year basis.
Following the results, the company’s shares fell 2.7% during trading hours on Sep 21. Negative investor sentiments were witnessed as management stated issues related to staffing, commodity and wage inflation as well as the resurgence of coronavirus cases.
However, the company cited relief on account of solid performances by its off-premise model, retail business and the Maple Street Biscuit Company concept. Going forward, the company anticipates the momentum in recovery to continue on the back of its cost-saving initiatives, introduction of a new dinner menu along with the continued roll-out of beer and wine to its stores.
Earnings & Revenues
During the fiscal fourth quarter, adjusted earnings per share (EPS) of $2.25 missed the Zacks Consensus Estimate of $2.42. In the prior year quarter, the company reported an adjusted loss per share of 85 cents.
During the quarter, revenues of $784.4 million missed the consensus mark of $791 million by 0.9%. The figure increased 58.4% on a year-over-year basis. The company benefited from average weekly sales volumes improvement courtesy of increase in dine-in traffic, retained off-premise volumes and robust retail performance. The company’s average weekly Dine-in sales volumes increased to nearly $59,000 per week in July from approximately $54,000 per week in April.
Comps Details
Comparable store restaurant sales declined 6.8% in the reported quarter from the levels recorded in the same period in fiscal 2019. Comparable store restaurant sales surged 53.5% year over year. Moreover, comparable retail sales increased 18.2% and 74.8% from the levels reported in the same period in 2019 and 2020, respectively.
During the fiscal fourth quarter, comparable store off-premise sales soared 108.6% from 2019 levels.
Operating Highlights
During the fiscal fourth quarter, cost of goods sold (exclusive of depreciation and rent) declined 40 basis points (bps) year over year to 30.1%. General and administrative expenses contracted 360 bps year over year to 4.7%.
Adjusted operating income in the fiscal fourth quarter totaled $65.9 million, up from ($20) million in the prior-year quarter. Adjusted operating margin came in at 8.4%. Margin benefited from better-than-expected sales performance, particularly in the company’s retail business.
Balance Sheet
As of Jul 30, 2021, cash and cash equivalents were $144.6 million, down from $437 million as on Jul 31, 2020.
Inventory at the end of the fiscal fourth quarter amounted to $138.3 million, down from $139.1 million at the end of fourth-quarter fiscal 2020.
Long-term debt amounted to $327.3 million at the end of the quarter, down from $910 million at the end of the prior-year quarter.
Net cash provided by operating activities was $301.9 million in the fiscal 2021 compared with $161 million recorded a year ago.
The company announced a hike in its quarterly dividend payout. The company raised its quarterly dividend by 30%, which indicates its intention to utilize free cash for boosting shareholders’ returns. The company raised quarterly dividend to $1.30 per share (or $5.20 annually) from the previous payout of $1.00 (or $4.00 annually). The hiked dividend will be payable on Nov 9, 2021, to shareholders of record as of Oct 22, 2021. Further, the management approved share repurchases of up to $100 million.
Fiscal 2021 Highlights
Fiscal 2021 adjusted EPS came in at $5.14 compared with $2.04 reported in the previous year.
Total revenues in fiscal 2021 came in at $2,821.4 million compared with $ 2,522.8 million in fiscal 2020.
GAAP operating income in fiscal 2021 totaled $366.7 million (or 13% of total revenues) compared with $103.6 million (or 4.1%) in the prior fiscal year.
Store Updates
As of Jul 30, 2021, the company had 664 Cracker Barrel units and 37 Maple units, making it a total of 701 company-owned units under operation.
Fiscal 2022 Outlook
Owing to the uncertainty revolving around the COVID-19 pandemic as well as the current operating and staffing environment, the company is not providing any customary annual guidance. The company stated concerns regarding the nationwide increase in infections as it could negatively impact the guest visitation patterns as well as the availability of its employees. The company expects first-quarter fiscal 2022 sales to be negatively impacted by the same.
For fiscal 2022, the company anticipates capital expenditures of approximately $120 million. Also, it expects commodity and wage inflation in the mid-to-high single digits. Meanwhile, effective tax rate for 2022 is anticipated at approximately 18%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -8.99% due to these changes.
VGM Scores
At this time, Cracker Barrel has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Cracker Barrel has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.