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Why Is Cracker Barrel (CBRL) Down 8.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for Cracker Barrel Old Country Store (CBRL - Free Report) . Shares have lost about 8.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cracker Barrel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Cracker Barrel Q2 Earnings Top Estimates, Revenues Lag
Cracker Barrel reported mixed second-quarter fiscal 2022 (ended Jan 28, 2022) results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. Nevertheless, the top and the bottom line improved year over year.
Earnings & Revenues
The company’s fiscal second-quarter adjusted earnings per share (EPS) of $1.71, beating the Zacks Consensus Estimate of $1.62. In the prior-year quarter, the company had reported an adjusted EPS of 70 cents.
Cracker Barrel reported revenues of $862.3 million during the quarter under review, which missed the consensus mark of $870 million. The top line increased 27% on a year-over-year basis. The company benefited from improvement in both restaurant and retail comparable store sales.
Comps Details
Comparable store restaurant sales inched up 1.9% in the reported quarter compared with the same period in fiscal 2019. Comparable store restaurant sales jumped 25.9% year over year. Comparable retail sales jumped 13.7% and 32.5% compared with the same period in 2019 and 2021, respectively.
During the fiscal second quarter, comparable store off-premise sales soared 123% compared with the second quarter of fiscal 2019.
Operating Highlights
During the fiscal second quarter, the cost of goods sold (exclusive of depreciation and rent) came in at $283.6 million compared with $225.1 million reported in the prior-year quarter. As a percentage of total revenues, the cost of goods sold (exclusive of depreciation and rent) declined 30 basis points (bps) year over year to 32.9%. General and administrative expenses during the quarter came in at $43.5 million compared with $34 million reported in the prior-year quarter.
Adjusted operating income in the fiscal second quarter totaled $49.8 million compared with $17.6 million reported in the prior-year quarter. The adjusted operating margin was 5.8% compared with 2.6% in the prior-year quarter. This can be attributed to better-than-expected sales performance, particularly in the company’s retail business.
Balance Sheet
As of Jan 28, 2022, cash and cash equivalents were $79.7 million compared with $568.8 million as of Jan 29, 2021.
Inventory at the end of the fiscal second quarter amounted to $153.9 million, up from $134.8 million at the end of second-quarter fiscal 2021.
Long-term debt amounted to $327.4 million at the end of the quarter compared with $835 million at the end of the prior-year quarter.
For the six months ended Jan 28, 2022, net cash provided by operating activities was $107.8 million compared with $121.3 million reported in the year-ago period.
Fiscal 2022 Outlook
In the fiscal third quarter, the company anticipates total revenues of approximately $800 million. It anticipates elevated COVID case counts and seasonally lower demand patterns to act as a headwind. Adjusted operating margin in the fiscal third quarter is anticipated at approximately 5.0% of total revenues. Operating margins in the fiscal third quarter will continue to bear the impact of significant wage, commodity and other operating expenses inflation as well as higher expenses. For the fiscal third quarter, the company anticipates commodity inflation of approximately 15% and wage inflation of approximately 11-12%.
Capital expenditures for the second half of fiscal 2022 are anticipated at approximately $60 million. The effective tax rate for the second half of fiscal 2022 is anticipated to be nearly 14%. Going forward, the company expects to open two new Cracker Barrel locations and approximately nine to 11 Maple Street Biscuit Company locations.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted 8.82% due to these changes.
VGM Scores
At this time, Cracker Barrel has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Cracker Barrel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Cracker Barrel (CBRL) Down 8.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Cracker Barrel Old Country Store (CBRL - Free Report) . Shares have lost about 8.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cracker Barrel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Cracker Barrel Q2 Earnings Top Estimates, Revenues Lag
Cracker Barrel reported mixed second-quarter fiscal 2022 (ended Jan 28, 2022) results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. Nevertheless, the top and the bottom line improved year over year.
Earnings & Revenues
The company’s fiscal second-quarter adjusted earnings per share (EPS) of $1.71, beating the Zacks Consensus Estimate of $1.62. In the prior-year quarter, the company had reported an adjusted EPS of 70 cents.
Cracker Barrel reported revenues of $862.3 million during the quarter under review, which missed the consensus mark of $870 million. The top line increased 27% on a year-over-year basis. The company benefited from improvement in both restaurant and retail comparable store sales.
Comps Details
Comparable store restaurant sales inched up 1.9% in the reported quarter compared with the same period in fiscal 2019. Comparable store restaurant sales jumped 25.9% year over year. Comparable retail sales jumped 13.7% and 32.5% compared with the same period in 2019 and 2021, respectively.
During the fiscal second quarter, comparable store off-premise sales soared 123% compared with the second quarter of fiscal 2019.
Operating Highlights
During the fiscal second quarter, the cost of goods sold (exclusive of depreciation and rent) came in at $283.6 million compared with $225.1 million reported in the prior-year quarter. As a percentage of total revenues, the cost of goods sold (exclusive of depreciation and rent) declined 30 basis points (bps) year over year to 32.9%. General and administrative expenses during the quarter came in at $43.5 million compared with $34 million reported in the prior-year quarter.
Adjusted operating income in the fiscal second quarter totaled $49.8 million compared with $17.6 million reported in the prior-year quarter. The adjusted operating margin was 5.8% compared with 2.6% in the prior-year quarter. This can be attributed to better-than-expected sales performance, particularly in the company’s retail business.
Balance Sheet
As of Jan 28, 2022, cash and cash equivalents were $79.7 million compared with $568.8 million as of Jan 29, 2021.
Inventory at the end of the fiscal second quarter amounted to $153.9 million, up from $134.8 million at the end of second-quarter fiscal 2021.
Long-term debt amounted to $327.4 million at the end of the quarter compared with $835 million at the end of the prior-year quarter.
For the six months ended Jan 28, 2022, net cash provided by operating activities was $107.8 million compared with $121.3 million reported in the year-ago period.
Fiscal 2022 Outlook
In the fiscal third quarter, the company anticipates total revenues of approximately $800 million. It anticipates elevated COVID case counts and seasonally lower demand patterns to act as a headwind. Adjusted operating margin in the fiscal third quarter is anticipated at approximately 5.0% of total revenues. Operating margins in the fiscal third quarter will continue to bear the impact of significant wage, commodity and other operating expenses inflation as well as higher expenses. For the fiscal third quarter, the company anticipates commodity inflation of approximately 15% and wage inflation of approximately 11-12%.
Capital expenditures for the second half of fiscal 2022 are anticipated at approximately $60 million. The effective tax rate for the second half of fiscal 2022 is anticipated to be nearly 14%. Going forward, the company expects to open two new Cracker Barrel locations and approximately nine to 11 Maple Street Biscuit Company locations.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted 8.82% due to these changes.
VGM Scores
At this time, Cracker Barrel has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Cracker Barrel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.