Cracker Barrel Old Country Store, Inc.
(
CBRL
) served up strong third quarter results on May 22, driven by a
3.1% increase in comparable restaurant sales and an expanding
operating margin.
This led management to revise their earnings guidance higher for
the remainder of the year, prompting analysts to raise their
estimates for both 2012 and 2013. It is a Zacks #2 Rank (Buy)
stock.
Cracker Barrel also recently announced a 40% increase in its
quarterly dividend. It now yields a solid 2.8%.
Company Description
Cracker Barrel Old Country Store, Inc. was founded in 1969 and is
headquartered in Lebanon, Tennessee. The company operates 615
restaurants and gift shops in 42 states. It has a market cap of
$1.4 billion.
Third Quarter Results
Cracker Barrel served up strong results for the third quarter of
its fiscal 2012 on May 22. Earnings per share came in at 86 cents,
beating the Zacks Consensus Estimate of 74 cents. It was a stellar
48% increase over the same quarter in 2011.
Total revenue rose 5% to $608.5 million, driven by a solid 3.1%
increase in comparable restaurant sales. The average check
increased 2.5% thanks to menu price increases, while comparable
restaurant traffic inched up by 0.6%.
Adjusted operating income surged 40% as the operating margin
expanded 170 basis points to 6.7%.
Increased Guidance
Following strong third quarter results, management raised its
earnings guidance for the remainder of the year. The company now
expects 2012 EPS between $4.35 and $4.45. This was ahead of
consensus at the time of the announcement and prompted a flurry of
positive estimate revisions, sending the stock to a Zacks #2 Rank
(Buy).
The Zacks Consensus Estimate for 2012 is now $4.43, within
guidance, and representing 17% growth over 2011 EPS. The 2013
consensus is currently $4.60, corresponding with 4% EPS growth.
Increased Dividend
Back on April 26, Cracker Barrel announced a whopping 60% increase
in its quarterly dividend to 40 cents per share. Since 2004, the
company has increased its dividend at a compound annual rate of
18%.
It currently yields a solid 2.7%.
Reasonable Valuation
Shares of Cracker Barrel have rallied more than 16%
since I last wrote about it on December 27.
But valuation still looks attractive with shares trading at 12.9x
12-month forward earnings, a discount to the industry median of
14.0x. Its price/sales ratio of 0.6 is in-line with its 10-year
median.
The Bottom Line
With rising estimates, solid growth projections, a 2.8% yield and
reasonable valuation, Cracker Barrel continues to offer a lot to
like.
Read the December 27 article here.
This Week's Growth & Income Zacks Rank Buy
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Extra Space Storage Inc.
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EXR
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revenue increased thanks to a significant improvement in the
occupancy rate. Management provided encouraging guidance for 2012,
prompting analysts to revise their estimates higher for both 2012
and 2013. This sent shares to a Zacks #2 Rank (Buy). In addition to
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Read the full article.
Estimates have been rising for
AZZ Incorporated
(
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Read the full article.
Estimates have been rising for
GATX Corporation
(
GMT
) after the company delivered a strong first quarter earnings beat
on April 26. It is a Zacks #2 Rank (Buy). Based on current
consensus estimates, analysts project 34% EPS growth this year and
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that yields a solid 3.1%. And valuation is attractive too, with
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Read the full article.
The Timken Company
(
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) delivered strong first quarter results on April 24 with sales and
EPS both beating the Zacks Consensus Estimates. And management
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analysts to raise their estimates for both 2012 and 2013, sending
the stock to a Zacks #1 Rank (Strong Buy).
Read the full article.
Todd Bunton is the Growth & Income Stock Strategist for
Zacks Investment
Research
and Editor of the
Income Plus Investor service
.
CRACKER BARREL (CBRL): Free Stock Analysis
Report
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