Cracker Barrel Q3 Results Top View, Trims FY EPS Projection

(RTTNews) - Cracker Barrel Old Country Store, Inc. (CBRL), the operator of Cracker Barrel Old Country Store restaurant and retail concept, reported Wednesday higher profit in its third quarter, reflecting lower costs and slight increase in revenues. Adjusted earnings per share and revenues topped analysts' estimates.

Further, the company issued earnings forecast for fourth quaretr and trimmed fiscal 2014 projection, both below analysts' estimates.

In pre-market activity, Cracker Barrel stock is losing $0.25 or 0.25 percent, and trading at $100.27.

For the third quarter, net income increased 17 percent to $28.73 million from $24.60 million last year. Earnings per share increased 18 percent to $1.20 from last year's $1.02. Earnings per share for the latest quarter was $1.23 when adjusted for expenses associated with the Special Meeting of Cracker Barrel shareholders.

On average, eight analysts polled by Thomson Reuters expected the company to report profit of $1.22 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue edged up 0.5 percent to $643.30 million from $640.41 million in the prior year. Analysts expected revenue of $642.87 million for the quarter.

Comparable store restaurant sales decreased 0.6 percent as a 2.9 percent decline in customer traffic was partially offset by a 2.3 percent increase in average check. The average menu price increase was approximately 1.8 percent. However, comparable store retail sales increased 0.9 percent.

In the quarter, operating margin improved to 7 percent from 6.9 percent a year ago. Adjusted operating margin was 7.2 percent. The company noted that reductions in cost of goods sold and general and administrative expenses were partially offset by an increase in other store operating expenses.

President and Chief Executive Officer Sandra Cochran said, "Like many in our industry, Cracker Barrel continued to face headwinds during the quarter from severe winter weather, a challenging consumer environment and an increasingly promotional competitive landscape. Nevertheless, we continued to outperform our peers in the Knapp-Track casual dining index for the tenth consecutive quarter, while our field teams focused on controlling costs and preserving our operating margins."

Looking ahead for fiscal 2014, Cracker Barrel now expects earnings per share between $5.50 and $5.60, which implies adjusted earnings per share for the fourth quarter of between $1.50 and $1.60. The company previously expected full-year earnings per share in a range of $5.60 to $5.80 and revenues between $2.70 billion and $2.75 billion. Analysts expect the company to report earnings per share of $5.70 for the year and $1.69 per share for the fourth quarter.

The company now expects total revenue for the year of approximately $2.7 billion and an operating income margin between 7.7 percent and 7.9 percent of total revenue. Analysts expect revenue of $2.69 billion for the year. Cracker Barrel noted that its annual revenue projection reflects the expected opening of seven new Cracker Barrel stores, projected increases in comparable store restaurant sales of approximately 0.5 percent, and approximately flat comparable store retail sales.

Further, the company said its Board, as previously disclosed, approved a quarterly dividend increase of 33 percent to $1.00 per share.