Cracker Barrel reported third-quarter results that exceeded analyst expectations and lifted its full-year forecast, as cost management helped offset a continued decline in sales.
The restaurant chain posted adjusted earnings of 29 cents a share, well ahead of analyst expectations for a loss
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Cracker Barrel reported third-quarter results that exceeded analyst expectations and lifted its full-year forecast, as cost management helped offset a continued decline in sales.
For the fiscal third quarter ended May 1, adjusted earnings came in at 29 cents per diluted share — a result that far outpaced the adjusted loss of 48 cents per share Wall Street had anticipated, per Barron's. Quarterly revenue of $797.4 million topped the $776.7 million consensus estimate, though the figure still represented a 2.9% drop from the prior year.
On a GAAP basis, net income reached $42.8 million, or $1.90 per diluted share — more than triple the $12.6 million, or 56 cents per diluted share, recorded in the same period a year ago. Embedded in that figure is $47.4 million in proceeds from a settlement of interchange fee litigation, an item Cracker Barrel stripped out of its adjusted earnings calculation.
Restaurant same-store sales slipped 2.6% year over year, and retail same-store sales were off 1.8%. Despite those declines, the retail segment managed to outpace restaurant comps — a feat the company said had not occurred in more than four years. CFO Craig Pommells acknowledged that guest traffic fell 6.7% but said the direction of that metric is moving in the right direction.
"Our initiatives to improve operations, deepen guest connection, and enhance profitability continue to gain traction, with strong execution from our teams driving third quarter results that exceeded expectations," President and CEO Julie Masino said in a statement.
On the guidance front, management lifted its full-year revenue target to a range of $3.27 billion to $3.30 billion, nudging the forecast higher from the previous $3.24 billion to $3.27 billion band. The adjusted EBITDA outlook saw a more dramatic revision, climbing to $120 million to $125 million from a prior range of $85 million to $100 million — well above the $92.7 million analysts had been modeling, according to The Wall Street Journal.
A corporate restructuring wrapped up in the second quarter was cited as a key contributor to the quarter's earnings performance, with management projecting that the reorganization will trim general and administrative costs by $20 million to $25 million on an annualized basis. Cracker Barrel also lowered its commodity and hourly wage inflation expectations, now projecting both in the low 2% range, compared with prior estimates of 2% to 2.5% for commodities and 2.5% to 3% for wages.
Cracker Barrel's board declared a quarterly dividend of 25 cents per share, payable Aug. 12 to shareholders of record as of July 17.
After the closing bell, shares jumped more than 12%, according to Benzinga.
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