Cracker Barrel Old Country Store, Inc. ( CBRL Quick Quote CBRL - Free Report) reported mixed fourth-quarter fiscal 2022 (ended Jul 29, 2022) results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top line rose year over year and the bottom line declined from the prior-year quarter's figure. Cracker Barrel president and chief executive officer Sandra B. Cochran stated, “Our commitment to value and in delivering a great guest experience helped us weather a weaker than expected summer travel season, gas prices that exceeded expectations, and historic inflationary pressures on the consumer, and we were encouraged by better traffic and sales trends in the final few weeks of the quarter.” Earnings & Revenues
The company’s fiscal fourth-quarter adjusted earnings per share (EPS) of $1.57, beating the Zacks Consensus Estimate of $1.38. In the prior-year quarter, the company had reported an adjusted EPS of $2.25.
Cracker Barrel reported revenues of $830.4 million during the quarter under review, which missed the consensus mark of $842 million. Although the top line rose 5.9% year over year, it fell short of the company’s expectations of 8% year-over-year growth. Lower-than-anticipated travel volumes, fewer visits from older guests, high gas prices and inflationary pressures impacted the top line.
Comparable store restaurant sales inched up 6.1% in the reported quarter compared with the same period in fiscal 2021. The upside was primarily backed by 7% menu pricing. Comparable store retail sales increased 3% year over year.
During the fiscal fourth quarter, the cost of goods sold (excluding depreciation and rent) came in at $273.4 million compared with $235.8 million reported in the prior-year quarter. As a percentage of total revenues, the cost of goods sold (exclusive of depreciation and rent) increased 280 basis points (bps) year over year to 32.9%. General and administrative expenses during the quarter came in at $32.9 million compared with $36.9 million reported in the prior-year quarter.
Adjusted operating income in the fiscal fourth quarter totaled $36.2 million compared with $65.9 million reported in the prior-year quarter. The adjusted operating margin was 4.4% compared with 8.4% in the prior-year quarter. The downside was mainly driven by commodity, wage and other expense inflation, higher staffing levels and elevated maintenance expense. Balance Sheet
As of Jul 29, 2022, cash and cash equivalents were $45.1 million compared with $144.6 million as of Jul 30, 2021.
Inventory at the end of fourth-quarter fiscal 2022 amounted to $213.2 million, up from $138.3 million at the end of fourth-quarter fiscal 2021. Long-term debt amounted to $423.2 million at the end of the quarter compared with $327.3 million at the end of the prior-year quarter. Net cash provided by operating activities was $205.3 million in fiscal 2022 compared with $301.9 million recorded a year ago. The company declared a cash dividend of $1.30 per share. The dividend will be paid out on Nov 8, 2022, to shareholders on record as of Oct 21, 2022. Fiscal 2022 Highlights
Fiscal 2022 adjusted EPS came in at $6.09 compared with $5.14 reported in the previous year.
Total revenues in fiscal 2022 came in at $3,267.8 million compared with $2,821.4 million in fiscal 2021. Adjusted operating income in fiscal 2022 totaled $165.7 million (or 5.1% of total revenues) compared with $166.8 million (or 5.9%) in the prior fiscal year. Fiscal 2023 Outlook
For fiscal 2023, the company expects revenue to grow in the range of 7-8% year over year. Operating income growth is expected to be between 8% and 10% on a year-over-year basis. During the year, the company anticipates contributions worth $20-$25 million from cost savings and business model improvements.
In fiscal 2023, the company anticipates commodity inflation of approximately 8% (with sequential moderation) and wage inflation of approximately 5%. Meanwhile, the effective tax rate for fiscal 2023 is anticipated at approximately 10-15%. Coming to store openings, the company expects to open three to four new Cracker Barrel locations and 15-20 new Maple Street Biscuit locations in fiscal 2023. Capital expenditures during the year are anticipated at approximately $125 million. This includes $30 million allocated to new store development. Zacks Rank & Key Picks
Cracker Barrel currently carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Some better-ranked stocks in the Zacks Retail-Wholesale sector are Tecnoglass Inc. ( TGLS Quick Quote TGLS - Free Report) , Sprouts Farmers Market, Inc. ( SFM Quick Quote SFM - Free Report) and Potbelly Corporation ( PBPB Quick Quote PBPB - Free Report) . Tecnoglass sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 24.4%, on average. Shares of the company have increased 14.5% in the past three months. The Zacks Consensus Estimate for Tecnoglass 2022 sales and EPS suggests growth of 28.2% and 47.7%, respectively, from the year-ago period’s levels. Sprouts Farmers Market sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 15.6%, on average. Shares of the company have increased 5.7% in the past three months. The Zacks Consensus Estimate for Sprouts Farmers Market’s 2022 sales and EPS suggests growth of 4.4% and 6.2%, respectively, from the year-ago period’s levels. Potbelly carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 22.2%, on average. Shares of the company have declined 17.9% in the past three months. The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 17.5% and 100%, respectively, from the year-ago period’s levels.