Cracker Barrel Faces Inflation Challenges and Strategic Growth
Cracker Barrel Old Country Store, Inc. Reports Q4 Results
Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL) recently shared its fourth-quarter financial results, revealing some challenges in the current economic landscape. The company reported adjusted earnings per share of 98 cents, falling below the anticipated street estimate of $1.10. Total sales reached $894.39 million, reflecting a 6.9% increase yet still missing the analyst consensus of $897.22 million.
Revenue Insights and Sales Performance
In this quarter, the revenue included a notable $62.8 million from an additional 53rd week, which significantly impacted year-over-year comparisons. Interestingly, Cracker Barrel saw its comparable store restaurant sales increase slightly by 0.4%, which was primarily influenced by a total menu price increase of 4.2%. This suggests that although sales increased, customer traffic may not have grown proportionately.
Challenges in Retail Sector
On the flip side, comparable store retail sales experienced a decline of 4.2% compared to the same quarter last year. This indicates some hurdles in attracting retail customers, which may warrant further strategic marketing initiatives to bolster this area.
EBITDA and Dividend Declaration
Adjusted EBITDA for the quarter stood at $57.4 million, which accounted for 6.4% of the total revenue. This figure has seen a decline from $70.4 million, or 8.4% of total revenue, during the same period the previous year. In response to its performance, Cracker Barrel announced a quarterly dividend of $0.25 per share on its common stock. This dividend is set to be paid to shareholders recorded as of a specified date.
Future Projections and Growth Plans
Looking ahead, Cracker Barrel has shared its revenue projections for fiscal year 2025, expecting it to fall between $3.4 billion and $3.5 billion. This outlook aligns closely with the $3.474 billion estimate, showcasing the company's cautious optimism.
Expansion Strategies
The company has also outlined plans for expansion, which includes opening two new locations and developing three to four additional units of the Maple Street Biscuit Company. This is an encouraging sign of growth despite the current challenges posed by inflation.
Inflationary Pressures and Financial Strategy
In the current economic climate, Cracker Barrel braces for commodity inflation, projected between 2% and 3%, alongside hourly wage inflation estimated at 3% to 4% year-over-year. The company aims for a projected adjusted EBITDA of between $200 million and $215 million, while their capital expenditures are expected to range from $160 million to $180 million. These strategies are designed to help maintain profitability amidst increasing costs.
Market Response and Stock Performance
As a result of the mixed earnings report and forward guidance, CBRL shares saw a slight decrease of 0.67%, trading at $41.28. This subtle shift highlights the market's cautious approach in response to the earnings miss and inflationary pressures on consumer spending.
Frequently Asked Questions
What were Cracker Barrel's fourth-quarter earnings per share?
Cracker Barrel reported adjusted earnings per share of 98 cents for the fourth quarter.
How did Cracker Barrel's sales perform in Q4?
The company's quarterly sales reached $894.39 million, representing a 6.9% increase but missing analyst expectations.
What are Cracker Barrel's plans for expansion?
Cracker Barrel plans to open two new stores and three to four new Maple Street Biscuit Company units.
What inflation pressures is Cracker Barrel facing?
The company anticipates commodity inflation between 2% and 3% and wage inflation between 3% and 4% compared to the previous year.
What is the outlook for Cracker Barrel's total revenue in FY25?
Cracker Barrel projects total revenue for FY25 to be between $3.4 billion and $3.5 billion.
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