Cracker Barrel's Modest Sales Growth Amid Rising Costs, Sets Optimistic Revenue Outlook

Cracker Barrel Old Country Store Inc CBRL reported second-quarter fiscal 2024 revenues of $935.4 million, up 0.2% Y/Y, beating the consensus of $917.8 million.

Cracker Barrel comparable store restaurant sales increased 1.2%, including total menu pricing increases of 4.8%. Comparable store retail sales fell 5.3% from the prior-year quarter. 

Adjusted operating income was $35.9 million, or 3.8% of total revenue, compared to $42.2 million, or 4.5%, a year ago, primarily due to higher labor and related expenses.

Adjusted EPS of $1.37, a 7.5% decrease from $1.48 a year ago, beat the consensus of $1.36.

Adjusted EBITDA was $63.7 million, or 6.8% of total revenue, a 5.9% decrease compared to the prior year’s quarter adjusted EBITDA of $67.7 million, or 7.3% of total revenue.

Commenting on the second quarter results, Cracker Barrel President and Chief Executive Officer Julie Masino said, “While margins remain pressured, we were encouraged by the improvement in our traffic trend during the quarter, which we believe was supported by our investments in labor and advertising and our focus on the guest experience.”

FY24 Outlook: Cracker Barrel now expects revenue of $3.5 billion – $3.6 billion (prior $3.4 billion – $3.5 billion) versus the consensus of $3.5 billion.

The company reiterated forecast for two new Cracker Barrel stores and 9 to 11 new Maple Street Biscuit Company units.

It sees commodity inflation of 0% – 2% (prior expectation of low-single digits) and hourly wage inflation of approximately 5% (prior expectation of mid-single digits).

Price Action: CBRL shares are down 0.89% at $71.68 on the last check Tuesday.

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