Cracker Barrel Old Country Store Inc.
) reported fourth-quarter 2012 adjusted earnings of $1.20 per
share, comfortably beating the Zacks Consensus Estimate of $1.29 as
well as the prior-year earnings of $1.01. Quarterly earnings
exclude the impact of an extra operational week in 2012. The
better-than-expected results were driven by top-line and comps
CRACKER BARREL (CBRL): Free Stock Analysis
PANERA BREAD CO (PNRA): Free Stock Analysis
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On a GAAP basis, the company reported earnings of $1.47 per share
compared with the year-ago quarter earnings of 75 cents per share.
Total revenue of the company climbed up 14.0% year over year to
$700.0 million, owing to growth in unit and comps.
In full year 2012, the company reported adjusted earnings of $101.6
million, or $4.34 per share, versus $90.0 million, or $3.81 per
share, in the prior year. Total revenue grew 6% to $2.6 billion.
Restaurant and retail revenues jumped 6.6% and 5.5% to $526.9
million and $122.0 million, respectively.
On a comparable basis, restaurant sales grew 3.8% due to a 1.4%
upside in traffic and 2.4% increase in average check. Comparable
retail sales in the quarter also surged 3.1%.
Gross margin in the quarter expanded to 69.1% from 68.4% in the
year-ago quarter, based on lower cost of goods sold (down 0.7%).
Operating margin enhanced 240 basis points (bps) to 8.6% in the
quarter, attributable to a 10 bps slip in labor and other related
expenses, 90 bps dip in other store operating expenses and 50 bps
decrease in general and administrative expenses.
During the quarter, Cracker Barrel opened 3 new restaurants. Thus,
at the end of fiscal 2012, the company had 616 owned locations.
In 2013, Cracker Barrel plans to open 12 new units.
At the end of fiscal 2012, Cracker Barrel had cash and cash
equivalents of approximately $152.0 million compared with $52.3
million in fiscal 2011. The company also reduced its long-term debt
to $525.0 million from $550.1 million in 2011.
Enhancing Shareholder Value
Cracker Barrel has also recently increased its quarterly dividend
by 10 cents to 50 cents per share. This translates into a 25.0%
increase from the prior dividend. The dividend will be paid on
November 5, 2012 to the stockholders of record as of October 19,
The company has also approved a new share repurchase program to buy
back up to $100 million worth of its common stock
For 2013, The Lebanon, Tennessee-based company expects total
revenue in the range of $2.6 billion to $2.65 billion, earnings per
share between $4.50 to $4.70 and comparable restaurant and retail
sales to be up 2.0% to 3.0%. Cracker Barrel expects commodity cost
pressure to continue in 2013 and anticipates inflation of
5.0%-6.0%. Operating margin is estimated to be in the single-digit
range of 7.3% to 7.5%.
For the first quarter of 2013, the company expects earnings in the
range of $1.00 to $1.05.
We expect estimates to go up in the coming days, as the company
reported better-than-expected earnings and provided an upbeat
outlook for 2013. Cracker Barrel remains focused on enhancing
shareholders' value and ensuring the company's growth in the long
term based on three strategies - increasing the core business, unit
growth and extending the Cracker Barrel brand. In the near term,
the company is taking several initiatives like media spending,
refined menu and pricing strategies and improved restaurant
operations and services to drive traffic and sales. Moreover, it
continues to make efforts to control cost. However, cost
inflation and uncertain economic conditions, which result in lower
traffic, remain challenges going forward.
Cracker Barrel, which competes with Panera Bread Co. (
), currently retains a Zacks #3 Rank (short-term Hold rating). We
also reiterate our long-term Neutral recommendation on the stock.