Cracker Barrel (CBRL) Q2 Earnings & Revenues Beat Estimates
Cracker Barrel Old Country Store, Inc. CBRL delivered second-quarter fiscal 2023 (ended Jan 27, 2023) results, with earnings and revenues beating the Zacks Consensus Estimate. The top line rose year over year, while the bottom line declined from the prior-year quarter's figure.
Cracker Barrel president and chief executive officer, Sandra B. Cochran, stated, “I am pleased with our second quarter results, as we delivered sales and operating income margin that exceeded expectations. I was especially pleased with our off-premise and retail performance. We are making great progress on key initiatives, and I believe we are well-positioned to deliver further performance improvements in the back half of the fiscal year."
Earnings & Revenues
In second-quarter fiscal 2023, the company reported adjusted earnings per share (EPS) of $1.48, beating the Zacks Consensus Estimate of $1.33. In the prior-year quarter, the company reported an adjusted EPS of $1.71.
Cracker Barrel Old Country Store, Inc. Price, Consensus and EPS Surprise
Cracker Barrel Old Country Store, Inc. price-consensus-eps-surprise-chart | Cracker Barrel Old Country Store, Inc. Quote
Quarterly revenues of $933.9 million beat the consensus mark of $917 million. Also, the top line increased 8.3% year over year. The company benefited from strong retail sales growth and elevated off-premise business.
Comps Details
Comparable store restaurant sales rose 8.4% in the reported quarter compared with the same period in fiscal 2022. The upside was primarily backed by a 9% average menu price increase. Comparable store retail sales increased 4.1% year over year.
Operating Highlights
During the fiscal second quarter, the cost of goods sold (excluding depreciation and rent) came in at $326.6 million compared with $283.6 million reported in the prior-year quarter. As a percentage of total revenues, the cost of goods sold (excluding depreciation and rent) increased 210 basis points (bps) year over year to 35%. General and administrative expenses during the quarter came in at $45.5 million compared with $43.5 million reported in the prior-year quarter.
Adjusted operating income in the fiscal second quarter totaled $42.2 million compared with $49.8 million reported in the prior-year quarter. The adjusted operating margin was 4.5% compared with 5.8% in the prior-year quarter. The downside was mainly driven by commodity inflation and elevated retail cost of goods sold.
Balance Sheet
As of Jan 27, 2023, cash and cash equivalents were $49.4 million compared with $38.7 million as of Oct 28, 2022.
Inventory at the end of second-quarter fiscal 2023 amounted to $187.3 million compared with $231 million at the end of first-quarter fiscal 2023.
Long-term debt amounted to $454.1 million at the end of the fiscal second quarter compared with $483.7 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 May 9, 2023, to shareholders on record as of Apr 14, 2023.
Fiscal 2023 Outlook
For fiscal 2023, the company expects revenues to grow in the range of 7-9% year over year compared with the previous anticipation of the 6-8% range. During the year, the company anticipates contributions worth $25 million from cost savings and business model improvements. Adjusted operating income margin during the year is anticipated to be in the high 4% range. This includes adjusted operating income margin rate expectations of 4.3-4.7% (in third-quarter fiscal 2023) and 6.5-7% (fourth-quarter fiscal 2023), respectively.
In fiscal 2023, the company anticipates commodity inflation to be 8.5-9% (with continued inflationary pressures in categories such as produce, eggs, dairy, and grains) and wage inflation of 6.5%. Meanwhile, the effective tax rate for fiscal 2023 is anticipated at approximately 10-12%.
Coming to store openings, the company expects to open three to four new Cracker Barrel locations and 15 new Maple Street Biscuit locations in fiscal 2023. Capital expenditures during the year are anticipated in the range of $110-$120 million.
Zacks Rank & Other Key Picks
Cracker Barrel currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Zacks Retail – Restaurants industry are Chuy's Holdings, Inc. CHUY, Arcos Dorados Holdings Inc. ARCO and Brinker International, Inc. EAT.
Chuy’s Holdings currently sports a Zacks Rank #1 (Strong Buy). CHUY has a trailing four-quarter earnings surprise of 19.1%, on average. Shares of CHUY have increased 14.1% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 10.8% and 16.1%, respectively, from the corresponding year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth of 11.6%. Shares of the company have increased 4.1% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 8.1% and 4.2%, respectively, from the year-ago period’s levels.
Brinker carries a Zacks Rank #2. EAT has a long-term earnings growth rate of 7.1%. The stock has declined 4.3% in the past year.
The Zacks Consensus Estimate for Brinker’s 2024 sales and EPS suggests growth of 3.9% and 36.5%, respectively, from the year-ago period’s reported levels.
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