LEBANON, Tenn., Feb. 21, 2017 /PRNewswire/ -- Cracker Barrel
Old Country Store, Inc. ("Cracker Barrel" or the "Company")
(Nasdaq: CBRL) today reported its financial results for the
second quarter of fiscal 2017 ended January
27, 2017.
Second Quarter Fiscal 2017 Highlights
- Compared to the prior year second quarter, comparable store
restaurant sales increased 0.6%, marking the Company's eleventh
consecutive quarter of positive comparable store restaurant
sales.
- Operating income as a percent of total revenue increased 150
basis points, over the prior year quarter, to 10.7%.
- Earnings per diluted share were $2.19, compared to GAAP earnings per diluted
share of $2.01 in the prior year
quarter, an increase of 9.0%. Adjusted for the impact of the prior
year retroactive reinstatement of the Work Opportunity Tax Credit
("WOTC"), earnings per diluted share increased 15% from
adjusted EPS of $1.91 in the prior
year quarter. (See non-GAAP reconciliation below.)
Commenting on the second quarter, Cracker Barrel President and
Chief Executive Officer Sandra B.
Cochran said, "I am pleased to report another significant
increase in earnings per diluted share. We delivered second quarter
operating margin growth largely driven by continued commodity
favorability and the success of our cost reduction initiatives. As
we look to the second half of this fiscal year, our teams remain
focused on executing at the store level, providing the great food,
friendly service, welcoming atmosphere and retail shopping
experience that differentiates our brand from our competitors."
Second Quarter Fiscal 2017 Results
Revenue
The Company reported total revenue of $772.7 million for the second quarter of fiscal
2017, representing an increase of 1.1% over the second quarter of
the prior year. Comparable store restaurant sales increased 0.6%,
including a 2.7% increase in average check partially offset by a
2.1% decrease in comparable store restaurant traffic. The average
menu price increase for the quarter was approximately 2.1%.
Comparable store retail sales decreased 2.2% from the prior year
quarter.
Comparable store restaurant traffic, average check and
comparable store restaurant sales and retail sales for the fiscal
months of November, December and January and the second quarter
were as follows:
|
November
|
December(1,2)
|
January(2)
|
Second
Quarter
|
Comparable restaurant
traffic
|
0.8%
|
-1.0%
|
-5.7%
|
-2.1%
|
Average
check
|
2.6%
|
3.0%
|
2.6%
|
2.7%
|
Comparable restaurant
sales
|
3.4%
|
2.0%
|
-3.1%
|
0.6%
|
Comparable retail
sales
|
-1.7%
|
-2.6%
|
-1.9%
|
-2.2%
|
|
(1) The Company
estimates inclement weather in December reduced traffic and sales
by approximately 1.6%.
|
(2) The Company
estimates the Christmas fiscal calendar timing shift, from fiscal
December in the prior year to fiscal January in the current year,
increased December traffic and sales by approximately 5.7% while
reducing January traffic and sales by approximately
5.0%.
|
Operating Income
Operating income in the second
quarter was $82.7 million, or 10.7%
of total revenue, an increase over the prior year quarter result of
$70.5 million, or 9.2% of total
revenue. As a percentage of total revenue, reductions in cost of
goods sold, other store operating expenses, and general and
administrative expenses were partially offset by an increase in
labor and related expenses.
Diluted Earnings per Share
Earnings per diluted
share were $2.19, compared to GAAP
EPS of $2.01 in the prior year
quarter, an increase of 9.0%. Adjusted for the impact of the prior
year retroactive reinstatement of the Work Opportunity Tax Credit,
earnings per diluted share increased 15% from adjusted EPS of
$1.91 in the prior year quarter. (For
a reconciliation of GAAP to non-GAAP financial measures, please see
the tables accompanying this release.)
Fiscal 2017 Outlook
The Company reaffirmed its
previous earnings guidance and expects to report earnings per
diluted share for the 2017 fiscal year between $8.10 and $8.25. The Company now expects total
revenue of approximately $2.95
billion, reflecting the expected opening of eight new
Cracker Barrel stores and four new Holler & Dash Biscuit House
restaurants. The Company now expects comparable store restaurant
sales of between 0.5% and 1.0% and comparable store retail sales of
approximately -2.0%, reflecting the Company's more cautious
expectations for the second half of the fiscal year. The Company
expects food commodity deflation of approximately 4.0% for the
year. The Company projects an operating income margin in the range
of 10.0% and 10.5% of total revenue for fiscal 2017. The Company
expects depreciation expense between $85
million and $87 million; net interest expense of
approximately $15 million; and
capital expenditures of approximately $125
million. The Company anticipates an effective tax rate for
fiscal 2017 of approximately 32%.
The Company expects to report earnings per diluted share for the
third quarter of 2017 of between $1.75 and
$1.85. The Company reminds investors that its outlook for
fiscal 2017 reflects a number of assumptions, many of which are
outside the Company's control.
Fiscal 2017 Second 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 March 7, 2017.
About Cracker Barrel Old Country
Store®
Cracker Barrel Old Country Store
provides a friendly home-away-from-home in its old country stores
and restaurants. Guests are cared for like family while relaxing
and enjoying real home-style food and shopping that's surprisingly
unique, genuinely fun and reminiscent of America's country
heritage…all at a fair price. The restaurants serve up delicious,
home-style country food such as meatloaf and homemade chicken n'
dumplins as well as our signature biscuits using an old family
recipe. The authentic old country retail store is fun to shop and
offers unique gifts and self-indulgences.
Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) was
established in 1969 in Lebanon,
Tenn. and operates 641 company-owned Cracker Barrel locations
and four company-owned Holler & Dash Biscuit House locations
across 43 states. Every Cracker Barrel store is open seven days a
week with hours Sunday through Thursday, 6
a.m. – 10 p.m., and Friday and
Saturday, 6 a.m. - 11 p.m. For more
information, 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 Q2 FY 2017 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 STATEMENT
(Unaudited)
(In thousands,
except share and per share amounts, percentages and
ratios)
|
|
Second Quarter Ended
|
|
Six Months
Ended
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
Percentage
|
1/27/17
|
|
1/29/16
|
|
Change
|
|
1/27/17
|
|
1/29/16
|
|
Change
|
Total
revenue
|
$772,682
|
|
$764,002
|
|
1%
|
|
$1,482,653
|
|
$1,466,631
|
|
1%
|
Cost of goods sold
(exclusive of depreciation and rent)
|
254,920
|
|
264,932
|
|
(4)
|
|
468,029
|
|
487,905
|
|
(4)
|
Labor and other
related expenses
|
259,270
|
|
251,935
|
|
3
|
|
508,374
|
|
496,257
|
|
2
|
Other store operating
expenses
|
140,979
|
|
141,103
|
|
(0)
|
|
278,905
|
|
276,810
|
|
1
|
Store operating
income
|
117,513
|
|
106,032
|
|
11
|
|
227,345
|
|
205,659
|
|
11
|
General and
administrative expenses
|
34,817
|
|
35,507
|
|
(2)
|
|
68,905
|
|
69,826
|
|
(1)
|
Operating
income
|
82,696
|
|
70,525
|
|
17
|
|
158,440
|
|
135,833
|
|
17
|
Interest
expense
|
3,638
|
|
3,569
|
|
2
|
|
7,314
|
|
7,113
|
|
3
|
Pretax
income
|
79,058
|
|
66,956
|
|
18
|
|
151,126
|
|
128,720
|
|
17
|
Provision for income
taxes
|
26,331
|
|
18,714
|
|
41
|
|
50,044
|
|
39,613
|
|
26
|
Net income
|
$52,727
|
|
$48,242
|
|
9
|
|
$101,082
|
|
$89,107
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share –
Basic:
|
$2.19
|
|
$2.02
|
|
8
|
|
$4.21
|
|
$3.72
|
|
13
|
Earnings
per share – Diluted:
|
$2.19
|
|
$2.01
|
|
9
|
|
$4.19
|
|
$3.70
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
24,040,243
|
|
23,937,812
|
|
0
|
|
24,020,976
|
|
23,947,183
|
|
0
|
Diluted
|
24,109,000
|
|
24,047,042
|
|
0
|
|
24,106,748
|
|
24,060,047
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio
Analysis
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant
|
76.5%
|
|
76.0%
|
|
|
|
78.6%
|
|
77.9%
|
|
|
Retail
|
23.5
|
|
24.0
|
|
|
|
21.4
|
|
22.1
|
|
|
Total revenue
|
100.0
|
|
100.0
|
|
|
|
100.0
|
|
100.0
|
|
|
Cost of goods sold
(exclusive of depreciation and rent)
|
33.0
|
|
34.7
|
|
|
|
31.6
|
|
33.3
|
|
|
Labor and other
related expenses
|
33.6
|
|
33.0
|
|
|
|
34.3
|
|
33.8
|
|
|
Other store operating
expenses
|
18.2
|
|
18.4
|
|
|
|
18.8
|
|
18.9
|
|
|
Store operating
income
|
15.2
|
|
13.9
|
|
|
|
15.3
|
|
14.0
|
|
|
General and
administrative expenses
|
4.5
|
|
4.7
|
|
|
|
4.6
|
|
4.7
|
|
|
Operating
income
|
10.7
|
|
9.2
|
|
|
|
10.7
|
|
9.3
|
|
|
Interest
expense
|
0.5
|
|
0.5
|
|
|
|
0.5
|
|
0.5
|
|
|
Pretax
income
|
10.2
|
|
8.7
|
|
|
|
10.2
|
|
8.8
|
|
|
Provision for income
taxes
|
3.4
|
|
2.4
|
|
|
|
3.4
|
|
2.7
|
|
|
Net income
|
6.8%
|
|
6.3%
|
|
|
|
6.8%
|
|
6.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited and in
thousands, except share amounts)
|
|
1/27/17
|
|
1/29/16
|
|
Assets
|
|
|
|
|
Cash and
cash equivalents
|
$185,698
|
|
$171,643
|
|
Accounts
receivable
|
19,654
|
|
15,900
|
|
Income
tax receivable
|
0
|
|
2,447
|
|
Inventory
|
155,879
|
|
150,959
|
|
Prepaid
expenses
|
18,727
|
|
18,289
|
|
Deferred
income taxes
|
2,252
|
|
5,795
|
|
Property
and equipment, net
|
1,088,612
|
|
1,048,715
|
|
Other
long-term assets
|
64,069
|
|
63,051
|
|
Total
assets
|
$1,534,891
|
|
$1,476,799
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Accounts
payable
|
$100,388
|
|
$91,474
|
|
Other
current liabilities
|
259,247
|
|
234,854
|
|
Long-term debt
|
400,000
|
|
400,000
|
|
Interest
rate swap liability
|
6,538
|
|
15,649
|
|
Other
long-term obligations
|
126,607
|
|
134,552
|
|
Deferred
income taxes
|
60,394
|
|
45,401
|
|
Shareholders' equity, net
|
581,717
|
|
554,869
|
|
Total liabilities and
shareholders' equity
|
$1,534,891
|
|
$1,476,799
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued
and outstanding
|
24,042,573
|
|
23,939,248
|
|
|
|
|
|
|
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
CONDENSED
CONSOLIDATED CASH FLOW STATEMENT
(Unaudited and in
thousands)
|
|
Six Months
Ended
|
|
1/27/17
|
|
1/29/16
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$101,082
|
|
$89,107
|
Depreciation and amortization
|
41,830
|
|
37,783
|
Loss on disposition of property and equipment
|
2,472
|
|
2,667
|
Share-based compensation, net of excess tax benefit
|
2,808
|
|
3,007
|
(Increase) decrease in inventories
|
(3,571)
|
|
2,099
|
(Decrease) in accounts payable
|
(32,105)
|
|
(41,643)
|
Net changes in other assets and liabilities
|
36,986
|
|
(7,407)
|
Net cash provided by operating activities
|
149,502
|
|
85,613
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property and equipment, net of insurance
recoveries
|
(52,934)
|
|
(36,797)
|
Proceeds from sale of property and equipment
|
412
|
|
472
|
Net cash (used in) investing activities
|
(52,522)
|
|
(36,325)
|
Cash flows from
financing activities:
|
|
|
|
(Taxes withheld) from exercise of share-based compensation awards,
net
|
(6,031)
|
|
(5,343)
|
Excess tax benefit from share-based compensation
|
1,203
|
|
1,948
|
Purchases and retirement of common stock
|
0
|
|
(14,653)
|
Dividends on common stock
|
(57,420)
|
|
(125,052)
|
Net cash (used in) financing activities
|
(62,248)
|
|
(143,100)
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
34,732
|
|
(93,812)
|
Cash and cash
equivalents, beginning of period
|
150,966
|
|
265,455
|
Cash and cash
equivalents, end of period
|
$185,698
|
|
$171,643
|
|
|
|
|
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
Supplemental
Information
(Unaudited)
|
|
Second Quarter
Ended
|
|
Six Months
Ended
|
|
1/27/17
|
|
1/29/16
|
|
1/27/17
|
|
1/29/16
|
|
|
|
|
|
|
|
|
Units in
operation:
|
|
|
|
|
|
|
|
Open at beginning of
period
|
643
|
|
635
|
|
641
|
|
637
|
Opened during
period
|
2
|
|
0
|
|
4
|
|
0
|
(Closed) during
period
|
0
|
|
0
|
|
0
|
|
(2)
|
Open at end of
period
|
645
|
|
635
|
|
645
|
|
635
|
|
|
|
|
|
|
|
|
Total revenue: (In
thousands)
|
|
|
|
|
|
|
|
Restaurant
|
$591,113
|
|
$580,918
|
|
$1,164,790
|
|
$1,143,197
|
Retail
|
181,569
|
|
183,084
|
|
317,863
|
|
323,434
|
Total
revenue
|
$772,682
|
|
$764,002
|
|
$1,482,653
|
|
$1,466,631
|
|
|
|
|
|
|
|
|
Cost of goods sold:
(In thousands)
|
|
|
|
|
|
|
|
Restaurant
|
$153,316
|
|
$164,776
|
|
$298,852
|
|
$319,566
|
Retail
|
101,604
|
|
100,156
|
|
169,177
|
|
168,339
|
Total cost of goods
sold
|
$254,920
|
|
$264,932
|
|
$468,029
|
|
$487,905
|
|
|
|
|
|
|
|
|
Average unit
volume: (In thousands)
|
|
|
|
|
|
|
|
Restaurant
|
$917.6
|
|
$914.9
|
|
$1,811.3
|
|
$1,798.0
|
Retail
|
281.8
|
|
288.3
|
|
494.3
|
|
508.7
|
Total
|
$1,199.4
|
|
$1,203.2
|
|
$2,305.6
|
|
$2,306.7
|
|
|
|
|
|
|
|
|
Operating
weeks:
|
8,375
|
|
8,255
|
|
16,720
|
|
16,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2017 vs. Q2
2016
|
|
6 mo. 2017 vs. 6
mo. 2016
|
|
|
|
|
|
Comparable store
sales period to period increase (decrease):
|
Restaurant
|
|
0.6%
|
|
0.9%
|
Retail
|
|
(2.2%)
|
|
(3.0%)
|
|
|
|
|
|
Number of locations
in comparable store base:
|
|
|
632
|
|
632
|
|
|
|
|
|
|
|
|
|
|
CRACKER BARREL OLD COUNTRY STORE, INC.
Reconciliation of GAAP basis operating
results to adjusted non-GAAP operating results
(Unaudited and in thousands)
In the accompanying press release the Company makes reference to
As Adjusted provision for taxes and net income per share before the
impact of the retroactive restatement of the Work Opportunity Tax
Credit. The Company believes that excluding this item and its
related tax effects from its financial results reflects operating
results that are more indicative of the Company's ongoing operating
performance while improving comparability to prior periods, and, as
such may provide investors with an enhanced understanding of the
Company's past financial performance and prospects for the future.
This information is not intended to be considered in isolation or
as a substitute for operating income or earnings per share
information prepared in accordance with GAAP.
|
Second Quarter ended
January 27, 2017
|
|
Second Quarter ended
January 29, 2016
|
|
As
Reported
|
Adjust
|
As
Adjusted
|
|
As
Reported
|
Adjust
|
As
Adjusted
|
|
|
|
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
Store operating
income
|
$117,513
|
$-
|
$117,513
|
|
$106,032
|
$-
|
$106,032
|
General and
administrative expenses
|
34,817
|
-
|
34,817
|
|
35,507
|
-
|
35,507
|
Operating
income
|
82,696
|
-
|
82,696
|
|
70,525
|
-
|
70,525
|
Interest
Expense
|
3,638
|
-
|
3,638
|
|
3,569
|
-
|
3,569
|
Pretax
income
|
79,058
|
-
|
79,058
|
|
66,956
|
-
|
66,956
|
Provision for income
taxes
|
26,331
|
-
|
26,331
|
|
18,714
|
2,292
|
21,006
|
Net income
|
$52,727
|
$-
|
$52,727
|
|
$48,242
|
($2,292)
|
$45,950
|
|
|
|
|
|
|
|
|
Earnings per share -
Basic
|
$2.19
|
$-
|
$2.19
|
|
$2.02
|
($0.10)
|
$1.92
|
Earnings per share -
Diluted
|
$2.19
|
$-
|
$2.19
|
|
$2.01
|
($0.10)
|
$1.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months ended
January 27, 2017
|
|
Six Months ended
January 29, 2016
|
|
As
Reported
|
Adjust
|
As
Adjusted
|
|
As
Reported
|
Adjust
|
As
Adjusted
|
|
|
|
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
Store operating
income
|
$227,345
|
$-
|
$227,345
|
|
$205,659
|
$-
|
$205,659
|
General and
administrative expenses
|
68,905
|
-
|
68,905
|
|
69,826
|
-
|
69,826
|
Operating
income
|
158,440
|
-
|
158,440
|
|
135,833
|
-
|
135,833
|
Interest
Expense
|
7,314
|
-
|
7,314
|
|
7,113
|
-
|
7,113
|
Pretax
income
|
151,126
|
-
|
151,126
|
|
128,720
|
-
|
128,720
|
Provision for income
taxes
|
50,044
|
-
|
50,044
|
|
39,613
|
2,292
|
41,905
|
Net income
|
$101,082
|
$-
|
$101,082
|
|
$89,107
|
($2,292)
|
$86,815
|
|
|
|
|
|
|
|
|
Earnings per share -
Basic
|
$4.21
|
$-
|
$4.21
|
|
$3.72
|
($0.09)
|
$3.63
|
Earnings per share -
Diluted
|
$4.19
|
$-
|
$4.19
|
|
$3.70
|
($0.09)
|
$3.61
|
(1) Provision for
income taxes adjusted to exclude the prior year favorable effect of
the retroactive reinstatement of the Work Opportunity Tax
Credit.
|
Investor
Contact:
|
Jessica
Hazel
|
|
(615)
235-4367
|
|
|
Media
Contact:
|
Janella
Escobar
|
|
(615)
235-4618
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cracker-barrel-reports-results-for-second-quarter-fiscal-2017-and-reaffirms-earnings-guidance-for-fiscal-2017-300410310.html
SOURCE Cracker Barrel Old Country Store, Inc.