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Cracker Barrel (CBRL) Q4 Earnings: Restaurant Sales Hold Key

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Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) is scheduled to report fourth-quarter fiscal 2018 results on Sep 18, before market open. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 5.2%.

How Are Estimates Faring?

Let’s look at the estimate revision trend in order to get a clear picture of what analysts are thinking about Cracker Barrel prior to the earnings release. For the quarter under review, the Zacks Consensus Estimate is pegged at $2.66, down 3 cents over the past seven days. This reflects a gain of 19.3% from $2.23 in the year-ago quarter. Revenues are expected to come in at $820.8 million, up 10.4% year over year.

Factors at Play

Cracker Barrel’s top line in the soon-to-be reported quarter is likely to be driven by robust performance of both the restaurant and retail divisions. The Zacks Consensus Estimate for fourth-quarter restaurant sales stands at $678 million, up 11% on a year-over-year basis. Meanwhile, the same for retail sales is pegged at $146 million, up 10.6% from the prior-year period number. This apart, unit expansion, menu innovation, increased focus on retail business and seasonal promotions bode well for the company.

Furthermore, Cracker Barrel is continuously focusing on rejuvenating its menu that serves as the backbone of the company’s riveting growth potential. In the third quarter of fiscal 2018, the company’s in-store menu featured Fried Chicken Benedict bowl, a Ham n' Maple Bacon bowl and a Sausage, Grits Cakes and Green Tomato Gravy bowl.  Also, in April, Cracker Barrel completed the rollout of crafted coffee.

In order to drive traffic, Cracker Barrel relies heavily on seasonal promotions and limited-time offers to boost its top-line performance as these are appealing to both regular users and less-frequent guests. In fiscal 2018, the company aims to meet consumers' needs for convenience via its off-premise business growth. In fact, the company also has plans to enhance its off-premise platform by introducing new catering menu offering and in-store training of hourly employees.

Cracker Barrel Old Country Store, Inc. Price, Consensus and EPS Surprise


What Does the Zacks Model Unveil?

Our proven model does not show that Cracker Barrel is likely to beat earnings estimates in the fourth quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Cracker Barrel has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell).  
You can see the complete list of today’s Zacks #1 Rank stocks here.

We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Peer Releases

McDonald's (MCD - Free Report) reported impressive second-quarter 2018 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings of $1.99 per share exceeded the consensus mark of $1.92 by 3.6% and increased 15% from the year-ago quarter (12% in constant currencies).

Darden (DRI - Free Report) posted better-than-expected results in fourth-quarter fiscal 2018. Adjusted earnings of $1.39 per share outpaced the consensus estimate of $1.35 by 3%.

Chipotle (CMG - Free Report) performed exceedingly well in the second quarter of 2018. Adjusted earnings of $2.87 per share exceeded the Zacks Consensus Estimate of $2.78 by 3.2%.

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