Restaurant Chain Cracker Barrel Shares Rise After Q4 EPS Beat; Topline Performance Falls Short

Cracker Barrel Old Country Store Inc CBRL reported fourth-quarter FY23 revenue growth of 0.8% year-on-year to $836.7 million, missing the analyst consensus of $842.61 million.

Comparable store retail sales decreased 6.8%, and comparable store restaurant sales grew 2.4%.

"Our Q4 topline performance fell short of our expectations. We have taken and will continue to take numerous actions to improve our traffic performance on the marketing and operational front which we believe will be effective, particularly as we enter our important holiday season. We will also launch our much-anticipated loyalty program, Cracker Barrel Rewards, in the next few weeks," said Cracker Barrel President and CEO Sandra B. Cochran.

General and administrative expenses increased 14% Y/Y to $37.5 million. The operating income for the quarter jumped 25% to $41.2 million, and the operating margin expanded 95 basis points.

Cracker Barrel held $25.1 million in cash and equivalents as of July 28, 2023.

Adjusted EPS of $1.79 beat the consensus estimate of $1.61.

The Board of Directors declared a quarterly dividend of $1.30 per share, payable on November 7, 2023, to shareholders of record as of October 20, 2023.

Outlook: Cracker Barrel expects Q1 FY24 sales of $800 million - $850 million versus the consensus of $848.54 million.

For Q1, CBRL expects GAAP operating income margin rate of 1.55%-2.55%. The company anticipates capital expenditures of $27 million - $32 million.

CBRL anticipates to open 1 to 2 new Cracker Barrel stores and 4 to 5 new Maple Street Biscuit Company units. It sees wage inflation of 4% - 5%.

Price Action: CBRL shares are trading higher by 2.26% at $75.86 on the last check Wednesday.