Cracker Barrel Old Country Store, Inc. ( CBRL Quick Quote CBRL - Free Report) delivered third-quarter fiscal 2023 (ended April 28, 2023) results, with earnings and revenues missing the Zacks Consensus Estimate. The top line rose year over year, while the bottom line declined from the prior-year quarter's figure. Following the results, the company’s shares dropped 4.6% during trading hours on Jun 6. The company witnessed a below expectations growth in the comparable store sales, due to a decline in the casual dining traffic toward the end of the quarter. The company anticipates the near-term environment to remain challenging due to heighten economic uncertainty, lower discretionary spending, and weaker consumer confidence. Earnings & Revenues
In third-quarter fiscal 2023, the company reported adjusted earnings per share (EPS) of $1.21, missing the Zacks Consensus Estimate of $1.33. In the prior-year quarter, the company reported an adjusted EPS of $1.29.
Quarterly revenues of $832.7 million missed the consensus mark of $845 million. The top line increased 5.4% year over year. The company benefited from strong comparable store restaurant sales growth and menu innovation.
Comparable store restaurant sales rose 7.4% in the reported quarter compared with the same period in fiscal 2022. The upside was primarily backed by an 8.8% average menu price increase. Comparable store retail sales declined 4.6% year over year.
During the fiscal third quarter, the cost of goods sold (excluding depreciation and rent) came in at $262.2 million compared with $250 million reported in the prior-year quarter. As a percentage of total revenues, the cost of goods sold (excluding depreciation and rent) fell 10 basis points (bps) year over year to 31.5%. General and administrative expenses during the quarter came in at $45 million, up from $40 million reported in the prior-year quarter.
Adjusted operating income in the fiscal third quarter totaled $33.9 million, up from $33.6 million reported in the prior-year quarter. The adjusted operating margin was 4.1%, down 20 bps from the prior-year quarter’s levels. The downside was mainly due to higher general and administrative expenses and cost of retail goods sold, partially offset by lower restaurant cost of goods sold, lower labor and related expenses. Balance Sheet
As of Apr 28, 2023, cash and cash equivalents were $22.5 million, down from $49.4 million as of Jan 29, 2023.
Inventory at the end of the fiscal third quarter amounted to $184.8 million, down from $187 million at the end of second-quarter fiscal 2023. Long-term debt amounted to $444.5 million at the end of the fiscal third quarter compared with $454.1 million at the end of the previous quarter. The company declared a cash dividend of $1.30 per share. The dividend will be paid out on Aug 8, 2023, to shareholders on record as of Jul 21, 2023. Q4 Guidance
For fourth-quarter fiscal 2023, the company expects revenues to grow in the range of 1-3% year over year. The company anticipates contributions worth $30 million from cost savings and business model improvements. Adjusted operating income margin is anticipated to be in the range of 4.5% to 5.5%.
In fourth-quarter fiscal 2023, the company anticipates commodity inflation to be flat and wage inflation of 5% compared with the prior-year quarter’s levels. Coming to store openings, the company expects to open one new Cracker Barrel unit and five to seven new Maple Street Biscuit company units during the fiscal fourth quarter. Capital expenditures during the quarter are anticipated in the range of $30-$35 million. Zacks Rank & Other Key Picks
Cracker Barrel currently sports a Zacks Rank #4 (Sell).
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