LEBANON, Tenn., Nov. 21, 2017 /PRNewswire/ -- Cracker Barrel Old
Country Store, Inc. ("Cracker Barrel" or the "Company")
(Nasdaq: CBRL) today reported its financial results for the
first quarter of fiscal 2018 ended October
27, 2017.
First Quarter Fiscal 2018 Highlights
- Earnings per diluted share were $1.92 compared to diluted EPS of $2.01 in the prior year quarter. The Company
estimates that hurricanes Harvey and Irma reduced first quarter
diluted EPS by approximately $0.07
and will reduce second quarter diluted EPS by approximately
$0.03.
- Operating income margin was 10.0% of revenue, compared with
prior year operating income margin of 10.7% of revenue.
- Comparable restaurant sales of 0.2% and traffic of -1.8%
outperformed the Casual Dining Industry, despite the negative
impacts from hurricanes Harvey and Irma. (See comparable sales and
traffic table for hurricane impact estimates.)
- The Company's Board of Directors declared a quarterly
dividend of $1.20 per share on the
Company's common stock, payable on February
5, 2018 to shareholders of record on January 12, 2018.
Commenting on the first quarter and fiscal year outlook, Cracker
Barrel President and Chief Executive Officer Sandra B. Cochran said, "We delivered positive
comparable store restaurant sales in the first quarter,
outperformed our casual dining peers, and exceeded our earnings
expectations, despite the challenges presented by the impact of
hurricanes Harvey and Irma on many of the communities in which we,
our customers and our employees live and work. In addition, our
field and leadership teams made significant progress on the
introduction of several key business initiatives, including the
system-wide rollout of our off-premise platform. While being more
cautious in our industry outlook and in our expectations for
continued wage and commodity pressure, we remain well-positioned to
deliver top-line performance and earnings growth as a result of our
fiscal 2018 initiatives."
First Quarter Fiscal 2018 Results
Revenue
The Company reported total revenue of $710.4
million for the first quarter of fiscal 2018, representing
an increase of 0.1% over the first quarter of the prior year.
Comparable store restaurant sales increased 0.2%, including a 2.0%
increase in average check partially offset by a 1.8% decrease in
store traffic. The average menu price increase for the quarter was
approximately 2.2%. Comparable store retail sales decreased 3.6%
from the prior year quarter. The Company opened two new Holler
& Dash Biscuit House locations during the quarter, bringing the
store count to 651 combined Cracker Barrel Old Country Store and
Holler & Dash Biscuit House locations at quarter-end.
Comparable store restaurant traffic, average check and
comparable store restaurant sales and retail sales for the fiscal
months of August, September and October and the first quarter were
as follows:
|
August
|
September
|
October
|
First
Quarter(1)
|
Comparable restaurant
traffic
|
-1.3%
|
-2.4%
|
-1.7%
|
-1.8%
|
Average
check
|
1.9%
|
2.1%
|
1.9%
|
2.0%
|
Comparable restaurant
sales
|
0.6%
|
-0.3%
|
0.2%
|
0.2%
|
Comparable retail
sales
|
-1.4%
|
-3.1%
|
-5.6%
|
-3.6%
|
(1)
|
The Company estimates
that effects of hurricanes Harvey and Irma reduced fiscal first
quarter
traffic and restaurant sales by approximately 0.3% and retail sales
by approximately 0.6%.
|
Operating Income
Operating income in the first
quarter was $70.8 million, or 10.0%
of total revenue. Operating income in the prior year quarter was
10.7% of total revenue. As a percentage of total revenue, increases
in other store operating expenses and general and administrative
expenses were partially offset by decreases in cost of goods sold
and labor and related expenses.
Diluted Earnings per Share
Earnings per diluted
share were $1.92, compared to diluted
EPS of $2.01 in the prior year first
quarter. The Company estimates that hurricanes Harvey and Irma
reduced first quarter diluted EPS by approximately $0.07.
Fiscal 2018 Outlook
For fiscal 2018, the Company now
expects to report earnings per diluted share of between
$8.75 and $8.90 reflecting the
approximately $0.10 negative impact
from hurricanes Harvey and Irma. The Company expects total revenue
of approximately $3.1 billion,
reflecting the expected opening of eight or nine new Cracker Barrel
stores and three new Holler & Dash stores, as well as projected
increases in comparable store restaurant sales in the range of 2.0%
to 3.0% and comparable store retail sales to be approximately flat.
The Company now projects food commodity inflation in the range of
2.0% to 2.5% for the year. The Company now projects operating
income margin to be approximately 10.5% of total revenue. The
Company expects depreciation expense between $95 million and $100 million; net interest
expense in the range of $15 million to $16
million; and capital expenditures of approximately
$150 million to $160 million. The
Company anticipates an effective tax rate for fiscal 2018 of
between 31% and 32%.
The Company's 2018 fiscal year is a 53-week year. The Company
estimates the impact of the 53rd week, which is included
in its guidance, to contribute earnings per diluted share of
approximately $0.30.
The Company expects to report earnings per diluted share for the
second quarter of 2018 of between $2.15 and
$2.25. The Company reminds investors that its outlook for
fiscal 2018 reflects a number of assumptions, many of which are
outside the Company's control.
Fiscal 2018 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 today beginning at 11:00 a.m. (ET). The on-line replay will be
available at 2:00 p.m. (ET) and
continue through December 6,
2017.
About Cracker Barrel Old Country Store, Inc.
Cracker
Barrel Old Country Store, Inc. (Nasdaq: CBRL) shares warm welcomes
and friendly service while offering guests high-quality homestyle
food and unique shopping – all at a fair price. By creating a world
filled with hospitality and charm through an experience that
combines dining and shopping, guests are cared for like family.
Established in 1969 in Lebanon,
Tenn., Cracker Barrel and its affiliates operate 647
company-owned Cracker Barrel Old Country Store®
locations in 44 states and own the fast-casual Holler and
Dash® restaurants. For more information about the
company, visit crackerbarrel.com.
CBRL-F
Except for specific historical information, certain of the
matters discussed in this press release may express or imply
projections of revenues or expenditures, statements of plans and
objectives or future operations or statements of future economic
performance. These, and similar statements are forward-looking
statements concerning matters that involve risks, uncertainties and
other factors which may cause the actual performance of Cracker
Barrel Old Country Store, Inc. and its subsidiaries to differ
materially from those expressed or implied by this discussion. All
forward-looking information is subject to completion of our
financial procedures for Q1 FY 2018 and is provided pursuant to the
safe harbor established under the Private Securities Litigation
Reform Act of 1995 and should be evaluated in the context of these
factors. Forward-looking statements generally can be identified by
the use of forward-looking terminology such as "trends,"
"assumptions," "target," "guidance," "outlook," "opportunity,"
"future," "plans," "goals," "objectives," "expectations,"
"near-term," "long-term," "projection," "may," "will," "would,"
"could," "expect," "intend," "estimate," "anticipate," "believe,"
"potential," "regular," "should," "projects," "forecasts," or
"continue" (or the negative or other derivatives of each of these
terms) or similar terminology and include the expected effects of
operational improvement initiatives, such as new menu items and
retail offerings. Factors which could materially affect actual
results include, but are not limited to: the effects of uncertain
consumer confidence, higher costs for energy, general or regional
economic weakness, weather on sales and customer travel,
discretionary income or personal expenditure activity of our
customers; our ability to identify, acquire and sell successful new
lines of retail merchandise and new menu items at our restaurants;
our ability to sustain or the effects of plans intended to improve
operational or marketing execution and performance; changes in or
implementation of additional governmental or regulatory rules,
regulations and interpretations affecting tax, wage and hour
matters, health and safety, pensions, insurance or other
undeterminable areas; the effects of plans intended to promote or
protect our brands and products; commodity price increases; the
ability of and cost to us to recruit, train, and retain qualified
hourly and management employees in an escalating wage environment;
the effects of increased competition at our locations on sales and
on labor recruiting, cost, and retention; workers' compensation,
group health and utility price changes; consumer behavior based on
negative publicity or concerns over nutritional or safety aspects
of our food or products or those of the restaurant industry in
general, including concerns about pandemics, as well as the
possible effects of such events on the price or availability of
ingredients used in our restaurants; the effects of our
indebtedness and associated restrictions on our financial and
operating flexibility and ability to execute or pursue our
operating plans and objectives; changes in interest rates or
capital market conditions affecting our financing costs and ability
to refinance all or portions of our indebtedness; the effects of
business trends on the outlook for individual restaurant locations
and the effect on the carrying value of those locations; our
ability to retain key personnel; the availability and cost of
suitable sites for restaurant development and our ability to
identify those sites; our ability to enter successfully into new
geographic markets that may be less familiar to us; changes in
land, building materials and construction costs; the actual results
of pending, future or threatened litigation or governmental
investigations and the costs and effects of negative publicity
associated with these activities; practical or psychological
effects of natural disasters or terrorist acts or war and military
or government responses; disruptions to our restaurant or retail
supply chain; changes in foreign exchange rates affecting our
future retail inventory purchases; implementation of new or changes
in interpretation of existing accounting principles generally
accepted in the United States of
America ("GAAP"); and other factors described from time to
time in our filings with the Securities and Exchange Commission,
press releases, and other communications. Any forward-looking
statement made by us herein, or elsewhere, speaks only as of the
date on which made. We expressly disclaim any intent, obligation or
undertaking to update or revise any forward-looking statements made
herein to reflect any change in our expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statements are based.
CRACKER BARREL OLD
COUNTRY STORE, INC.
|
CONDENSED
CONSOLIDATED INCOME STATEMENTS
|
(Unaudited)
|
(In thousands,
except share and per share amounts, percentages and
ratios)
|
|
|
First
Quarter Ended
|
|
|
|
|
Percentage
|
10/27/17
|
|
10/28/16
|
|
Change
|
Total
revenue
|
|
$710,368
|
|
$709,971
|
|
0%
|
Cost of goods sold
(exclusive of
depreciation and rent)
|
|
210,749
|
|
213,109
|
|
(1)
|
Labor and other
related expenses
|
|
248,068
|
|
249,104
|
|
(0)
|
Other store operating
expenses
|
|
143,820
|
|
137,926
|
|
4
|
Store operating
income
|
|
107,731
|
|
109,832
|
|
(2)
|
General and
administrative expenses
|
|
36,893
|
|
34,088
|
|
8
|
Operating
income
|
|
70,838
|
|
75,744
|
|
(6)
|
Interest
expense
|
|
3,618
|
|
3,676
|
|
(2)
|
Pretax
income
|
|
67,220
|
|
72,068
|
|
(7)
|
Provision for income
taxes
|
|
20,840
|
|
23,713
|
|
(12)
|
Net income
|
|
$46,380
|
|
$48,355
|
|
(4)
|
|
|
|
|
|
|
|
Earnings per share –
Basic:
|
|
$1.93
|
|
$2.01
|
|
(4)
|
Earnings per share –
Diluted:
|
|
$1.92
|
|
$2.01
|
|
(4)
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
|
|
|
Basic
|
|
24,035,202
|
|
24,001,708
|
|
0
|
Diluted
|
|
24,105,187
|
|
24,099,013
|
|
0
|
|
|
|
|
|
|
|
Ratio
Analysis
|
|
|
|
|
|
|
Total
revenue:
|
|
|
|
|
|
|
Restaurant
|
|
81.4%
|
|
80.8%
|
|
|
Retail
|
|
18.6
|
|
19.2
|
|
|
Total revenue
|
|
100.0
|
|
100.0
|
|
|
Cost of goods sold
(exclusive of
depreciation and rent)
|
|
29.7
|
|
30.0
|
|
|
Labor and other
related expenses
|
|
34.9
|
|
35.1
|
|
|
Other store operating
expenses
|
|
20.2
|
|
19.4
|
|
|
Store operating
income
|
|
15.2
|
|
15.5
|
|
|
General and
administrative
expenses
|
|
5.2
|
|
4.8
|
|
|
Operating
income
|
|
10.0
|
|
10.7
|
|
|
Interest
expense
|
|
0.5
|
|
0.5
|
|
|
Pretax
income
|
|
9.5
|
|
10.2
|
|
|
Provision for income
taxes
|
|
3.0
|
|
3.4
|
|
|
Net income
|
|
6.5%
|
|
6.8%
|
|
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited and in
thousands, except share amounts)
|
|
|
10/27/17
|
|
10/28/16
|
|
Assets
|
|
|
|
|
Cash and
cash equivalents
|
$120,193
|
|
$125,108
|
|
Accounts
receivable
|
18,078
|
|
18,862
|
|
Inventory
|
191,481
|
|
187,221
|
|
Prepaid
expenses
|
19,479
|
|
18,006
|
|
Deferred
income taxes
|
0
|
|
2,275
|
|
Property
and equipment, net
|
1,105,781
|
|
1,084,721
|
|
Other
long-term assets
|
66,920
|
|
62,886
|
|
Total
assets
|
$1,521,932
|
|
$1,499,079
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Accounts
payable
|
$130,127
|
|
$119,014
|
|
Other
current liabilities
|
245,659
|
|
234,494
|
|
Long-term debt
|
400,000
|
|
400,000
|
|
Interest
rate swap liability
|
4,077
|
|
16,082
|
|
Other
long-term obligations
|
131,250
|
|
125,878
|
|
Deferred
income taxes
|
63,117
|
|
56,506
|
|
Shareholders' equity, net
|
547,702
|
|
547,105
|
|
Total liabilities and
shareholders' equity
|
$1,521,932
|
|
$1,499,079
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued
and outstanding
|
23,994,793
|
|
24,032,367
|
|
|
|
|
|
|
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
|
CONDENSED
CONSOLIDATED CASH FLOW STATEMENT
|
(Unaudited and in
thousands)
|
|
|
Three Months
Ended
|
|
10/27/17
|
|
10/28/16
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$46,380
|
|
$48,355
|
Depreciation and amortization
|
21,631
|
|
20,534
|
Loss on disposition of property and equipment
|
1,204
|
|
1,107
|
Share-based compensation, net of excess tax benefit
|
2,035
|
|
363
|
(Increase) in
inventories
|
(35,114)
|
|
(34,913)
|
Increase (Decrease) in accounts payable
|
11,732
|
|
(13,479)
|
Net changes in other assets and liabilities
|
(9,591)
|
|
12,971
|
Net cash provided by operating activities
|
38,277
|
|
34,938
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property and equipment, net of insurance
recoveries
|
(30,527)
|
|
(26,336)
|
Proceeds from sale of property and equipment
|
110
|
|
265
|
Net
cash (used in) investing activities
|
(30,417)
|
|
(26,071)
|
Cash flows from
financing activities:
|
|
|
|
(Taxes withheld) from exercise of share-based compensation awards,
net
|
(3,383)
|
|
(6,138)
|
Excess tax benefit from share-based compensation
|
0
|
|
1,062
|
Purchases and retirement of common stock
|
(14,772)
|
|
0
|
Dividends on common stock
|
(30,513)
|
|
(29,649)
|
Net cash (used in) financing activities
|
(48,668)
|
|
(34,725)
|
|
|
|
|
Net (decrease) in
cash and cash equivalents
|
(40,808)
|
|
(25,858)
|
Cash and cash
equivalents, beginning of period
|
161,001
|
|
150,966
|
Cash and cash
equivalents, end of period
|
$120,193
|
|
$125,108
|
|
|
|
|
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
|
Supplemental
Information
|
(Unaudited)
|
|
|
|
First Quarter
Ended
|
|
|
|
10/27/17
|
|
10/28/16
|
|
|
|
|
|
|
|
|
Units in
operation:
|
|
|
|
|
Open at beginning of
period
|
649
|
|
641
|
|
Opened during
period
|
2
|
|
2
|
|
Open at end of
period
|
651
|
|
643
|
|
|
|
|
|
|
Total revenue: (In
thousands)
|
|
|
|
|
Restaurant
|
$578,237
|
|
$573,677
|
|
Retail
|
132,131
|
|
136,294
|
|
Total
revenue
|
$710,368
|
|
$709,971
|
|
|
|
|
|
|
Cost of goods sold
(exclusive of
depreciation and rent): (In thousands)
|
|
|
|
|
Restaurant
|
$143,850
|
|
$145,536
|
|
Retail
|
66,899
|
|
67,573
|
|
Total cost of goods
sold
|
$210,749
|
|
$213,109
|
|
|
|
|
|
|
Average unit
volume: (In thousands)
|
|
|
|
|
Restaurant
|
$889.5
|
|
$893.7
|
|
Retail
|
203.2
|
|
212.3
|
|
Total
|
$1,092.7
|
|
$1,106.0
|
|
|
|
|
|
|
|
|
Operating
weeks:
|
|
|
8,451
|
|
8,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2018 vs. Q1
2017
|
|
|
|
|
|
Comparable store
sales period to period increase (decrease):
|
|
Restaurant
|
|
0.2%
|
|
Retail
|
|
(3.6%)
|
|
|
|
|
|
Number of locations
in comparable store base:
|
|
|
|
635
|
|
Investor
Contact:
|
Jessica
Hazel
|
|
(615)
235-4367
|
|
|
Media
Contact:
|
Janella
Escobar
|
|
(615)
235-4618
|
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SOURCE Cracker Barrel Old Country Store, Inc.