Cracker Barrel reports fiscal Q1 net earnings of US$27.2M, up 18% from year-ago period as revenue rises 4% to US$649.1M
November 26, 2013
– Positive Comparable Restaurant and Retail Sales in the Quarter
Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the "Company") (Nasdaq: CBRL) today reported financial results for the first quarter of fiscal 2014 ended November 1, 2013.
First-Quarter Fiscal 2014 Highlights
Compared to the prior year first quarter, comparable store restaurant sales increased 2.8% and comparable store retail sales increased 2.5%.
Eighth consecutive quarter of positive comparable restaurant sales and retail sales, and outperformance of the Knapp-TrackTM casual dining index.
On a GAAP basis, operating income margin was 6.8% of total revenue, compared with 7.2% in the prior year quarter. Adjusted for proxy contest expenses, adjusted operating income margin was 7.2% of total revenue, compared with 7.8% in the prior year quarter. (See non-GAAP reconciliation below.)
On a GAAP basis, earnings per diluted share were $1.14, or $1.22 when adjusted for proxy contest expenses, compared with adjusted EPS of $1.08 in the prior year quarter.
Commenting on the first-quarter results, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, "We are pleased with our first quarter results, which represent our eighth consecutive quarter of increased year-over-year comparable store sales. Although the government shutdown challenged our consumer and added to an already difficult environment, this quarter's financial results exceeded our expectations and reflect our initial success in executing our business priorities for fiscal 2014."
First-Quarter Fiscal 2014 Results
The Company reported total revenue of $649.1 million for the first quarter of fiscal 2014, representing an increase of 3.5% over the first quarter of the prior year. Comparable store restaurant sales increased 2.8%, including a 2.9% increase in average check. The average menu price increase for the quarter was approximately 2.5%. Comparable store retail sales increased 2.5% for the quarter. The Company opened one new Cracker Barrel store during the quarter.
GAAP operating income in the first quarter was $44.2 million, or 6.8% of total revenue. Adjusted for proxy contest expenses, adjusted operating income was $47.1 million, or 7.2% of total revenue, compared with adjusted operating income of $49.2 million, or 7.8% of total revenue, in the prior year quarter. A 60 basis point reduction in store labor and related expenses was offset by the cost of a company-wide managers' conference and the timing of advertising expenses related to the Wholesome Fixin's® rollout.
Diluted Earnings per Share
On a GAAP basis, earnings per diluted share in the first quarter of fiscal 2014 were $1.14, compared with $0.97 in the prior year quarter. Adjusted for proxy contest expenses, adjusted earnings per diluted share were $1.22, compared with adjusted earnings per diluted share of $1.08 in the prior year quarter.
Fiscal 2014 Outlook
Based upon year-to-date financial performance and continuing uncertainty about economic trends, the Company re-affirmed its previous full year earnings guidance. For fiscal 2014, the Company expects total revenue of between $2.7 billion and $2.75 billion, an operating income margin of between 7.8% and 8.0%, and earnings per diluted share of between $5.60 and $5.80. The revenue projection for fiscal 2014 reflects the expected opening of seven or eight new Cracker Barrel stores, and projected increases in comparable store restaurant sales and retail sales in a range of 2.0% to 3.0%. The Company's projections are based upon expected food commodity inflation of approximately 2% for the year; depreciation expense between $68 million and $70 million; net interest expense between $16 million and $18 million; and an effective tax rate of between 31% and 32%. The Company expects capital expenditures during fiscal 2014 to be between $90 million and $100 million.
The Company expects to report earnings per diluted share for the second quarter of 2014 of between $1.50 and $1.60. The Company notes that its guidance does not include expenses related to the proxy contest at its recent annual shareholders' meeting. The Company reminds investors that its outlook for fiscal 2014 reflects a number of assumptions, many of which are outside the Company's control.
Fiscal 2014 First-Quarter Conference Call
As previously announced, the live broadcast of Cracker Barrel's quarterly conference call will be available to the public on-line at investor.crackerbarrel.com on November 26, 2013, beginning at 11:00 a.m. (Eastern Time). An on-line replay will be available at 2:00 p.m. (Eastern Time) and continue through December 10, 2013.
About Cracker Barrel
Cracker Barrel Old Country Store provides a friendly home-away-from-home in its old country stores and restaurants. Guests are cared for like family while relaxing and enjoying real home-style food and shopping that's surprisingly unique, genuinely fun and reminiscent of America's country heritage…all at a fair price. The restaurants serve up delicious, home-style country food such as meatloaf and homemade chicken n' dumplins as well as our signature biscuits using an old family recipe. The authentic old country retail store is fun to shop and offers unique gifts and self-indulgences.
Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) was established in 1969 in Lebanon, Tenn. and operates 625 company-owned locations in 42 states. Every Cracker Barrel store is open seven days a week with hours Sunday through Thursday, 6 a.m. — 10 p.m., and Friday and Saturday, 6 a.m. - 11 p.m. For more information, visit: crackerbarrel.com.
Industry Intelligence editor's note: In an omitted table, the company reported first-quarter 2014 net income of US$27.2 million and revenue of $649.1 million compared to first-quarter 2013 net income of $23.2 million and revenue of $627.5 million.
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